LOTUS CONSTRUCTION, MUMBAI V. ACIT 15(3), MUMBAI

ITA 4858/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0321 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 01-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 4858/MUM/2015 (ASSESSMENT YEAR: 2011-12) M/S. LOTUS CONSTRUCTION B-1, NEELA APARTMENTS MANDAPESHWAR ROAD BORIVALI (W), MUMBAI 400051 VS. J C I T - 32(2) C-11, PRATYAKSHKAR BHAVAN BANDRA KURLA COMPLEX BANDRA, MUMBAI 400051 PAN AACFL5653J APPELLANT RESPONDENT APPELLANT BY: MS. RUCHI M. RATHOD RESPONDENT BY: SHRI RAJESH KUMAR YADAV DATE OF HEARING: 11.01.2018 DATE OF PRONOUNCEMENT: 12.02.2018 O R D E R PER RAJESH KUMAR, AM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-44, MUMBAI DATED 12.06.2015 FOR A.Y. 2011-12 . 2. THE ISSUE RAISED IN THIS APPEAL IS AGAINST CONFIRMA TION OF ` 3,20,060/- BEING 8% OF ALLEGED BOGUS PURCHASES AS A GAINST 100% ADDITION OF BOGUS PURCHASES MADE BY THE AO OF ` 40,00,753/-. 3. THE ASSESSEE IS IN THE BUSINESS OF BUILDER AND DEV ELOPER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILE D LIST OF PARTIES FROM WHOM PURCHASES WERE MADE. THEREAFTER THE AO ISSUED NOTICE UNDER SECTION 133(6) OF INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) TO THE SAID PARTIES. HOWEVER, THE NOTICE ISSUE TO M/S. GLOBAL T RADE IMPEX WAS RETURNED UNSERVED. SUBSEQUENTLY THE AO NOTICED THAT THE NAME OF THE SAID PARTY WAS APPEARING IN THE LIST OF HAWALA DEALERS A S BROUGHT OUT BY THE ITA NO. 4858/MUM/2015 M/S. LOTUS CONSTRUCTION 2 SALES TAX DEPARTMENT, GOVT OF MAHARASHTRA. THE AO C ONFRONTED THE SAID FACTS TO THE ASSESSEE WHICH WAS REPLIED BY THE ASSE SSEE VIDE LETTER DATED 18.03.2014 BY FILING DETAILED SUBMISSION. HOWEVER, THE REPLY OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO AND HE ADD ED THE ENTIRE AMOUNT OF PURCHASES FROM THE SAID PARTY TO THE INCOME OF T HE ASSESSEE BY TREATING THE PURCHASES AS BOGUS AND NON-GENUINE. IN THE APPE LLATE PROCEEDINGS THE LEARNED CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASS ESSEE BY SUSTAINING THE ADDITION EQUAL TO 8% OF THE TOTAL BOGUS PURCHASE WH ICH WORKS OUT TO ` 3,20,060/- BY RELYING ON THE DECISION OF THE HON'BL E GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH 38 TAXMANN.CO M 385 WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT WHERE THE SALE IS ACCEPTED BY THE AO THEN THE ENTIRE PURCHASES CANNOT BE ADDED TO THE IN COME OF THE ASSESSEE. HOWEVER, THE ASSESSEE STILL AGGRIEVED BY THE ORDER OF THE CIT(A) PREFERRED AN APPEAL BEFORE THE TRIBUNAL. 4. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE HAS AVAI LED VARIOUS BOGUS PURCHASE BILLS TO THE TUNE OF ` 40,00,753/- FROM M/S. GLOBAL TRADE IMPEX, WHICH IS A PARTY APPEARING IN THE LIST OF HAVALA D EALERS BY THE SALES TAX DEPARTMENT, GOVT OF MAHARASHTRA. THE AO DISALLOWED 100% OF SAID PURCHASES WHICH IS REDUCED TO 8% BY THE CIT(A) ON T HE GROUND THAT THE SALES WERE ACCEPTED BY THE AO AND THEREFORE ONLY PE RCENTAGE ADDITION CAN BE MADE DEPENDING UPON THE G.P. RATIO DECLARED BY T HE ASSESSEE. THE PRACTICE NORMALLY FOLLOWED IN SUCH TYPE OF CASES WH ERE BILLS ARE TAKEN FROM HAWALA DEALERS , THE ASSESSEE PURCHASES GOODS FROM GREY MARKET THEREBY MAKING SOME SAVINGS IN THE FORM OF VAT AND OTHER LE VIES. THE COORDINATE BENCHES OF THE TRIBUNAL HAVE TAKEN A VIEW THAT SOME PERCENTAGE ADDITION CAN BE MADE IN ORDER TO BRING TO TAX THE SAVINGS TH AT THE ASSESSEE MIGHT HAVE MADE BY PURCHASING THE GOODS FROM GREY MARKET. IN THE PRESENT CASE THE CIT(A) HAS TAKEN A VERY REASONED VIEW OF THE MA TTER BY DIRECTING THE AO TO ASSESS THE INCOME AT 8% OF THE BOGUS PURCHASES. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHICH IS SPEAK ING AND REASONED ONE AND THEREFORE WE UPHOLD THE SAME. ITA NO. 4858/MUM/2015 M/S. LOTUS CONSTRUCTION 3 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH FEBRUARY, 2018. SD/ - SD/ - (D.T. GARASIA) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 12 TH FEBRUARY, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -44, MUMBAI 4. THE CIT - 32, MUMBAI 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.