ACIT 32(1), MUMBAI V. HIRALAL K. PATEL, MUMBAI

ITA 4726/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0363 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 20-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEVANG KISHOR SHAH
• Assessee Lawyers: M C OMI NINGSHAN
• Keywords: Bogus purchase; Unexplained expenditure
• Section: 69C; 143(3); 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ITA NO. 4 726 / MUM/ 20 1 5 ( / ASSESSMENT YEAR: 20 11 - 12 ) ASSTT. COMMISSIONER OF INCO ME TAX - 3 2(1), ROOM NO.202, 2 ND FL. PRATYAKSHAKAR BHAVAN, BANDRA - KURLA COMPLEX, BANDRA (E), MUMBAI - 400051. / VS. SHRI HIRALAL K PATEL, 1 ST FLOOR, HEERA HOUSE, DAULAT NAGAR, BORIVALI EAST, MUMBAI - 400051 ( / APPELLANT) : ( / RESPON DENT ) ./ PAN : AACPP222K ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : SHRI M C OMI NINGSHAN /R EVENUE BY : SHRI DEVANG KISHOR SHAH / DATE OF HEARING : 11 .5. 2 017 / DATE OF PRONOUNCEMENT : 7. 6 . 201 7 / O R D E R PER RAJESH KUMAR, A. M: BY WAY OF THIS APPEAL THE ASSESSEE IS CHALLENGING THE ORDER OF LD.CIT(A) - 44, MUMBAI DATED 5.6.2015 FOR THE ASSESSMENT YEAR 201 1 - 12 . 2. GROUNDS OF APPE AL TAKEN BY THE ASSESSEE ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD.CIT(A), ERRED IN RESTRICTING ADDITION OF UNEXPLAINED EXPENDITURE TO RS.5,96, 120/ - @ 8% OF RS.74,51,506/ - ) U/S.69C OF THE LT. ACT ON ACCOUNT OF BOGUS PURCHASES AS AGAINST THE ADDITION OF RS.74,51,506/ - MADE BY THE A O WITHOUT APPRECIATING THAT THE 2 ITA NO 4726 /MUM/201 5 ASSESSEE HAS NOT PRODUCED ANY COGENT EVIDENCE TO SUBSTANTIATE THE FACT THAT IT HAD TAKEN ACTUAL DELIVERY OF GOODS PURCHASED FROM THIS PARTY AND THE ASSE SSEE HAS ALSO FAILED TO PRODUCE THE PURCHASE PARTIES BEFORE THE A O . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE A O OVERLOOKING THE STATEMENT GIVEN BY THE PARTY AND EXPLICI T FINDING OF THE INVESTIGATION CARRIED OUT BY THE SALES TAX DEPARTMENT AND CORROBORATED BY THE ENQUIRIES OF THE A O . 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3 . THE FACTS OF THE CASE IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS MADE TOTAL PURCHASES OF RS.6,42,02,465/ - . T HE ASSESSEE WAS CALLED UPON BY THE AO TO FURNISH THE PART Y - WISE DETAILS OF PURCHASES A LONG WITH OTHER DETAILS AS TO VAT ETC WHICH WERE DULY FILED BY THE ASSESSEE. FROM THE DETAILS SUPPLIED BY THE ASSESSEE , THE AO FOUND THAT THE SAME SUPPLIE R S SUPPLYING GOODS TO THE ASSESSEE WHOSE NAMES WERE APPEARING IN THE LIST OF HAWALA DEALERS AS PUBLIS HED ON THE WEBSITE OF SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHT RA . FROM THE 9 PARTIES, THE ASSESSEE HAS MADE PURCHASES OF RS.74,51,506/ - . THE NOTICE SENT BY THE AO TO THESE PARTIES U/S 133(6) TO VERIFY THE GENUINENESS OF PURCHASES WERE RETURNED U NSERVED WITH THE POSTAL REMARKS . THE AO ISSUED SHOW CAUSE NOTICE DATED 17.2.2014 TO THE ASSESSEE TO SHOW CAUSE AS TO WHY THESE PURCHASES SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH WAS REPLIED BY THE ASSESSEE VIDE LETTER DATED 28.2.2014 WITHOUT SUBMITTING ANY DETAILS AND COPIES OF 3 ITA NO 4726 /MUM/201 5 PURCHASE BILLS, STATEMENT OF BANK AND TRANSACTION THEREOF. ULTIMATELY, THE ASSESSMENT WAS FRAMED VIDE ORDER DATED 7.3.2014 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 BY ASSESSING THE TOTAL INCOME AT RS.1,02,65,880/ - AFTER MAKING ADDITION OF RS.74,51,506/ - U/S 69C OF THE TOWARDS BOGUS PURCHASES. DURING THE APPELLATE PROCEEDINGS THE LD.CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ADDITION TOWARDS GP AT THE RATE OF 8% OF THE TOTAL BOGUS PURCHASES OF RS.74,51,506/ - WHICH WORKED OUT TO RS.5,96,120/ - AND THUS ALLOWED THE RELIEF OF RS.68,55,386/ - AFTER CONSIDERING THE VARIOUS CONTENTIONS AND SUBMISSIONS AS RAISED BY THE ASSESSEE IN INCORPORATED IN THE APPELLATE ORDER. 4. WE HA VE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE IMPUGNED ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE FAA AFTER CONSIDERING THE DETAILED SUBMISSIONS AND EXAMINATION OF RECORDS OF PURCHASES MADE BY THE ASSESSEE IN RESPECT OF THESE PARTIES, PARTLY UPHELD THE ADDITION . THUS, THE CLAIM OF THE ASSESSEE SUSTAINED IN PART TOWARDS THE GP ON SUCH PURCHASES AT THE RATE OF 8 % WHICH COMES TO RS.5,96,120/ - . WE ALSO FIND FROM THE RECORD BEFORE US THAT EARLIER GP OF THE ASSESSEE RANGES BETWEEN 8 TO 9% IN THE PRECEDING THREE ASSESSMENT YEARS AND IN SUCCEEDING YEAR. FURTHER, THE ASSESSEE HAS PRODUCED BILLS AND VOUCHERS INCLUDING THE QUANTITATIVE DETAILS OF PURCHASES, DELIVERY CHALLANS , BANK STATEMENT S SHOWING THE N AMES OF THESE PARTIES . T HEREFORE IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE ARE 4 ITA NO 4726 /MUM/201 5 IN AGREEMENT WITH THE CONCLUSION DRAWN BY THE LD.CIT(A) BY APPLYING GP RATE ON THE TOTAL PURCHASES. MOREOVER, THE AO HAS NOT DISPUTED THE SALES OF ASSESSEE. ACCORDINGLY, WE DISMISS THE APPEAL OF THE REVENUE BY UJPHOLDING THE ORDER OF CIT(A). 5 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH JUNE , 2017. S D SD ( MAHAVIR SINGH ) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 7. 6 .2017 SRL,SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GU ARD F ILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI