AKSHAR ENTERPRISES (PROP.HARESH M VALIA), DOMBIVALI V. ITO WD 3(4), THANE

ITA 4905/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9644 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 21-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Bogus purchase
• Section: 44AD; 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 4905 /MUM/ 201 8 (ASSESSMENT YEAR 20 11 - 12 ) AKSHAR ENTERPRISES (PROP. HARESH M. VALIA) FLAT NO. 104, KARTKEY CHSL PLOT NO. 05, MIDC , PIERI ZONE DOMBIVALI EAST PIN : 421 201. PAN : AFBPV5151: V S . ITO WARD 3(4) MUMBAI ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI CHAITANYA ANJARIA DATE OF HEARING 04 . 09 . 201 9 DATE OF PRONOUNCEMENT 02 . 1 2 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 20.2.2017 AND PERTAINS TO A.Y. 2011 - 12. 2. THE ISSUE RAISED IS : 1. THE HON'BLE CIT - (A) ERRED IN HOLDING 8% NET PROFIT ON TURNOVER OF RS. 1,6 4,07,006 / - WITHOUT ANY BASE AND CONTRARY TO THE PROVISIONS OF INCOME TAX ACT, 1961. 2. THE HON'BLE CIT (A) ERRED IN REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) WITHOUT CONSIDERING THE FACTS AND CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT, 1961. 3. T HE ASSESSING OFFICER ERRED IN DISALLOWING WHOLE UNPROVED P URCHASES OF RS. 2,79,547/ - WITHOUT CONSIDERING THE FACTS AND CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT, 1961. 4. THE ASSESSING OFFICER ERRED IN M AKING ADDITION OF RS. 31,61,459/ - ON ADHOC B ASIS, BEING 20% OF ALL THE EXPENSES ON LOG STOCK BARREL WITHOUT ANY BASE AND CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT, 1961 . 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS DEALING IN ELECTRICAL GOODS. UPON INFORMATION FROM THE SALES TAX DEP ARTMENT THAT THE ASSESSEE HAS ENGAGED IN OBTAINING BOGUS PURCHASES FROM TWO PARTIES AMOUNTING TO RS. 2,79,547/ - , ASSESSMENT WAS REOPENED. IN THE REASSESSMENT, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS GIVEN VARIOUS OPPORTUNITIES BUT NOBODY ATTENDED . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CREDITED GROSS RECEIPTS/SALES OF RS. 1,60,86,846/ - AGAINST WHICH EXPENDITURES WERE DEBITED TO RS. 1,60,86,846/ - . THE ASSESSING OFFICER NOTED THAT THE EXPENSES WERE NOT SUPP ORTED BY DOCUMENTARY EVIDENCE. T HE ASSESSING OFFICER PROCEEDED TO DISALLOW BOGUS PURCHASES AMOUNTING TO RS. 2,79,547/ - AND 20% EXPENDITURE AMOUNTING TO RS. 31,61,459/ - . 4. UPON ASSESSEES APPEAL LEARNED CIT(A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT. HE NOTED THA T IF BOOKS OF ACCOUNT ARE REJECTED, GUIDANCE CAN BE TAKEN FROM SECTION 44AD OF THE ACT AND NET PROFIT RATE OF 8% CAN BE APPLIED. BY APPLYING THIS RATIO HE FOUND THAT THE NET PROFIT SHOULD BE RS. 11,89,411/ - ON TURNOVER OF RS. 1,48,67,648/ - . SINCE THE ASSESSEE HAD ALREADY SHOWN NET PROFIT AT RS. 2,85,640/ - , HE DIRECTED THAT THE BALANCE OF RS. 9,03,771/ - BE ADDED. 5. AGAINST THIS ORDER ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. NONE APPEARED ON BEHALF OF THE AS SESSEE. UPON CAREFUL CONSIDERATION WE NOTE THAT THE ASSESSEE HAS NOT AT ALL COOPERATED BEFORE THE ASSESSING OFFICER. NO DOCUMENTARY EVIDENCE FOR EXPENDITURE OF RS. 1,60,86,846/ - WAS PRODUCED. FURTHERMORE THE ASSESSEE HAS OBTAINED BOGUS ACCOMMODATION ENTRIE S FOR THE PURCHASES. HENCE, IN OUR CONSIDERED OPINION THERE IS NO INFIRMITY IN REJECTION OF BOOKS OF ACCOUNT. AFTER REJECTION OF ACCOUNTS 8% NET PROFIT HAS BEEN ESTIMATED BY LEARNED CIT(A). THIS IN OUR CONSIDERED OPINION IS VERY REASONABLE. HENCE, OVERALL DISALLOWANCE OF RS. 90 ,377 / - IS REASONABLE AND MEETS END OF JUSTICE. HENCE, WE UPHOLD THE ORDER OF LEARNED CIT(A). 3 7. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 02 . 1 2 . 201 9 . SD/ - SD/ - ( AMARJIT SINGH ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2 / 1 2 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RES PONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI