Late Radhashyam Pugalia, Kolkata V. ITO, Ward 36(1), Kolkata, Kolkata

ITA 465/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0755 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJOY MUKHERJEE CIT DR REVE
• Assessee Lawyers: V N PUROHIT
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL KOLKATA SMC BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER] I.T.A. NO. 464/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.A. NO. 465/KOL/2017 ASSESSMENT YEAR: 2010-11 RAJEEV PUGALIA... ..APPELLANT (SON & L.R OF LATE RADHASHYAM PUGALIA) 14/2, OLD CHINA BAZAR ST. KOLKATA 700 001 [PAN : AEMPP 1437 P] INCOME TAX OFFICER, WARD-36(1), KOLKATA..... ....RESPONDENT AYAKAR BHAWAN POORVA 110, SHANTIPALLY KOLKATA 700 107 APPEARANCES BY: SHRI V.N. PUROHIT, C.A., APPEARED ON BEHALF OF THE AS SESSEE. SHRI SANJOY MUKHERJEE, ADDL. CIT, DR, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : OCTOBER 17 TH , 2017 DATE OF PRONOUNCING THE ORDER : DECEMBER 21 ST , 2017 O R D E R PER J. SUDHAKAR REDDY :- BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND AR E DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATA, (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 ( THE ACT), DT. 17/01/2016, FOR THE ASSESSMENT YEARS 2009-10 & 2010-11. 2. THE ONLY ISSUE THAT ARISES IN BOTH THESE APPEALS IS WHETHER, CERTAIN PURCHASES MADE BY THE SOLE PROPRIETOR CONCERN OF THE ASSESSEE ARE BOGUS PURCHASES OR NOT AND IF SO AS TO WHETHER THE ENTIRE PURCHASES HAVE TO BE AD DED AS INCOME OF THE ASSESSEE OR A PERCENTAGE OF THE SAME SHOULD BE TREATED AS INCOME. 3. THE LD. COUNSEL OF THE ASSESSEE, SHRI V.N. PUROH IT, SUBMITTED THAT THE SALES OF THE ASSESSEE HAVE BEEN ACCEPTED, THE CLOSING STOCK HAS BEEN ACCEPTED AND THAT THE ASSESSEE HAS PRODUCED THE CONSIGNMENT NOTES, TAX IN VOICES AND OTHER EVIDENCES IN 2 I.T.A. NO. 464/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.A. NO. 465/KOL/2017 ASSESSMENT YEAR: 2010-11 RAJEEV PUGALIA SUPPORT OF THE PURCHASES BEFORE THE ASSESSING OFFIC ER. EVEN TRANSPORT NOTES HAVE BEEN PRODUCED. IT WAS VEHEMENTLY CONTENDED THAT OUT OF T OTAL PURCHASES OF MORE THAN RS.9.75 CRORES, THE ASSESSING OFFICER ALLEGES THAT THE ASSESSEE HAS MADE BOGUS PURCHASE OF RS.4,33,576/-, FOR THE ASSESSMENT YEAR 2010-11. SIMILARLY, FOR THE ASSESSMENT YEAR 2009-10, OUT OF TOTAL PURCHASES OF RS.13.95 CRORES, THE ASSESSING OFFICER TREATED THE PURCHASE OF RS.1,30,000/- AS BO GUS PURCHASE. QUANTITATIVE DETAILS OF THE PURCHASE AND SALES WERE FURNISHED IN SUPPORT OF THE CONTENTION THAT THE PURCHASES WERE GENUINE AND THIS WAS NOT DISPUTED BY THE ASSESSING OFFICER. 4. THE LD. D/R, ON THE OTHER HAND, OPPOSED THESE CO NTENTIONS AND SUBMITTED THAT THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) HAV E FOUND THAT THE ASSESSEE IS A HAWALA DEALER AND WAS BLACKLISTED BY MAHARASHTRA SALES TAX WEBSITE AND THAT NO EVIDENCE WAS PROVIDED ON MOVEMENT OF GOODS AND PREPONDERANCE OF PROBABILITIES ARE AGAINST THE ASSESSEE. HE RELIED ON THE ORDER OF THE ASSESSI NG OFFICER AS WELL AS THE LD. CIT(A). 5. AFTER HEARING RIVAL CONTENTIONS, I AM OF THE CON SIDERED OPINION THAT THE ALTERNATIVE CONTENTION OF THE ASSESSEE THAT A PERCE NTAGE OF SUCH DOUBTFUL PURCHASES IS ONLY TO BE CONSIDERED AS THE INCOME OF THE ASSESSEE . THE ENTIRE PURCHASES CANNOT BE ADDED AS INCOME, SPECIFICALLY WHEN THE ASSESSEE HAS GIVEN QUANTITATIVE DETAILS OF MOVEMENT OF STOCKS. THE PURCHASES ARE DOUBTFUL, AS EVIDENCE OF MOVEMENT OF GOODS HAS NOT BEEN PRODUCED. 6. IN VIEW OF THE ABOVE DISCUSSION, I DIRECT THE AS SESSING OFFICER TO APPLY A NET PROFIT RATE EARNED AND DISCLOSED BY THE ASSESSEE IN ITS REGULAR BOOKS OF ACCOUNTS TO THE DOUBTFUL PURCHASES AND TREAT THE SAME AS INCOME OF THE ASSESSEE. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED IN PART. KOLKATA, THE 21 ST DAY OF DECEMBER, 2017. SD/- [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 21.12.2017 {SC SPS} 3 I.T.A. NO. 464/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.A. NO. 465/KOL/2017 ASSESSMENT YEAR: 2010-11 RAJEEV PUGALIA COPY OF THE ORDER FORWARDED TO: 1. RAJEEV PUGALIA (SON & L.R OF LATE RADHASHYAM PUGALIA) 14/2, OLD CHINA BAZAR ST. KOLKATA 700 001 2. INCOME TAX OFFICER, WARD-36(1), KOLKATA AYAKAR BHAWAN POORVA 110, SHANTIPALLY KOLKATA 700 107 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES