Appeal Details
Counselvise Citation
[2024] 101 COUNSELVISE.COM (IT) 6751 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 month(s) 9 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-05-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Next Hearing Date
27-05-2024
Assessment Year
2009-2010
Appeal Filed On
21-12-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “SMC” Bench, Mumbai. Before Shri Narender Kumar Choudhry (JM) & Smt. Renu Jauhari (AM) I.T.A. No. 4756/Mum/2023 (A.Y. 2009-10) Rajeshkumar Ratilal Shah B-303/304, Shree Rameshwar Tower, Shimpoli Road, Opp. Reliance Mall, Borivali West, Maharashtra- 400092. PAN : AAVPS2376L Vs. ITO-42(1)(4) Kautilya Bhavan Bandra Kurla Complex, Bandra East Mumbai-400 051. (Appellant) (Respondent) Assessee by Shri Harshal Ajmera Department by Shri Nagnath Pasale Date of Hearing 28.05.2024 Date of Pronouncement 31.05.2024 O R D E R Per Narender Kumar Choudhry (JM) :- In the instant case, the Assessing Officer vide assessment order dated 5.3.3015 under section 144 read with section 147 of the I.T. Act made the addition of Rs. 10,88,165/- under section 69C of the Act, on account of fictitious invoices in the name of bogus parties and added the same to the total income of the assessee. The Assessee being aggrieved, challenged the said addition before the ld. CIT(A) who more or less on the same reasoning as given by the Assessing Officer, ultimately affirmed the aforesaid addition. The assessee being aggrieved is in appeal before us. 2 2. Learned AR, at the outset by drawing out attention to the assessment order dated 4.3.2016 passed under section 143(3) read with section 147 of the Act for assessment year 2010-11 contended that on identical facts and circumstances, the Assessing Officer made the addition only to the extent @ 12.5% of the total amount of bogus purchases and therefore by following the same method, this appeal can be decided. 3. On the contrary, learned DR though refuted the claim of the assessee, however accepted the factual aspect, qua assessment order dated 4.3.2016(supra). 4. We have given thoughtful consideration of the peculiar facts and circumstances of the case. No doubt, purchases made by the assessee have been proved as bogus purchases based on the fictitious invoices by the authorities below. However, it is settled law that entire amount of alleged bogus purchases cannot be added/disallowed in entirety but the profit element embedded therein can only be considered for making addition. Hence, considering peculiar fact that in subsequent assessment year i.e. A.Y. 2010-11, the Revenue department has made addition @ 12.5% of the alleged bogus purchases, therefore in order to maintain the consistency we are inclined to restrict the addition to the extent of 12.5% of the amount of alleged bogus purchases or the profit shown by the assessee voluntarily, which ever would be higher. 5. In the result, appeal filed by the assessee stands allowed. Order pronounced in the open court on 31 May, 2024. Sd/- Sd/- (Renu Jauhari) (Narender Kumar Choudhry) Accountant Member Judicial Member 3 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai. 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai
Other Referred Cases
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Laws Referred To
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Expert Summary
"Rajeshkumar Ratilal Shah vs ITO
* A.O issued order u/s 144 r.w.s 147.
* Addition of Rs 10,88,165/- u/s 69C for fictitious invoices in the name of bogus parties, also adding the same to the total income of the assessee.
* The assessee appealed before the CITA
* CITA gave the same reasoning as the A.O. and asserted the addition.
* The assessee appealed before the ITAT.
* In the assessment order dated 4.3.2016 for assessment year 2010-11, it was argued that the Assessing Officer made an addition of 12.5% of the total amount of bogus purchases. The appeal suggests that this same method should be followed.
* With consideration of facts and circumstances of the case, the purchases made by the assessee have been proven as bogus purchases based on the fictitious invoices.
* It is settled law that the entire amount of alleged bogus purchases cannot be added/disallowed entirely.
* The profit element attached can only be considered for making an addition.
* In the following assessment year, A.Y. 2010-11, the Revenue department added 12.5% to the alleged bogus purchases. To maintain consistency, the Tribunal is inclined to limit the addition to 12.5% of the alleged bogus purchases or the profit shown voluntarily by the assessee, whichever is higher.
* Appeal of assessee stands allowed.
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