ACIT 21 (1), Mumbai V. DINESH PANDURANG KUDAV, Mumbai

ITA 4969/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3408 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 30-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 4969/MUM/2019 (ASSESSMENT YEAR 2009-10) I.T.A. NO. 4970/MUM/2019 (ASSESSMENT YEAR 2010-11 ) ACIT-21(1) ROOM NO. 116 1 ST FLOOR PIRAMAL CHAMBERS PAREL, LALBAUG MUMBAI-400 012. VS. DINESH PANDURANG KUDAV VARAD INDUSTRIES B-93, TWIN TOWERS PRABHADEVI VEER SAVARKAR MARG MUMBAI-400 025. PAN : AADPK0809Q (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI RASHMIKANT MODI DEPARTMENT BY SHRI BHA RAT ANDHLE DATE OF HEARING 10.03.2021 DATE OF PRONOUNCEMENT 11.03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE APPEALS BY THE REVENUE WHEREIN THE REVENU E IS AGGRIEVED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [I N SHORT LEARNED CIT(A)] HAS REDUCED THE ADDITION FOR BOGUS PURCHASE DONE @ 100% BY ASSESSING OFFICER BY SUSTAINING ONLY 25% FOR THE AY 2009-10 & 2020-11 RESPECTIVELY. 2. THE ASSESSEE IN THIS CASE IS ENGAGED INTO THE BU SINESS OF MANUFACTURING OF BULK DRUG INTERMEDIATES AND CHEMICALS. THE ASSES SMENT WAS REOPENED UPON INFORMATION FROM SALES TAX DEPARTMENT THAT ASSESSEE HAS MADE PURCHASES FROM BOGUS DEALERS, THE AO MADE 100% ADDITION OF THE BOG US PURCHASE AS UNDER:- ASSESSMENT YEAR AMOUNT RS. 2009-10 15,05,790/- 2010-11 2,54,509/- 3. UPON ASSESSEE'S APPEAL LEARNED CIT-A HAS NOTED T HAT THE SALES HAS NOT BEEN DOUBTED. ACCORDINGLY PLACING RELIANCE UPON SEV ERAL CASE LAWS AND UP ON DINESH PANDURANG KUDAV 2 THE FACTS OF THE CASE HE SUSTAINED 25% DISALLOWANCE OUT OF THE BOGUS PURCHASES. 4. AGAINST ABOVE ORDER REVENUE IS IN APPEAL BEFORE THE ITAT. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. WE FIND T HAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED NOR ANY DEFECT HAS BEEN POINT ED OUT CONSUMPTION RATIO. IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED, HUNDRED PERCENT DISALLOWANCE FOR BOGUS PURCHASE CANNOT BE DONE. THE RATIONALE BEING NO SALES IS POSSIBLE WITHOUT ACTUAL PURCHASES. THIS PROPOSIT ION IS SUPPORTED FROM HONOURABLE JURISDICTIONAL HIGH COURT DECISION IN TH E CASE OF NIKUNJ EXIMP ENTERPRISES (IN WRIT PETITION NO 2860, ORDER DT 18. 6.2014). IN THIS CASE THE HONOURABLE HIGH COURT HAS UPHELD HUNDRED PERCENT AL LOWANCE FOR THE PURCHASES SAID TO BE BOGUS WHEN SALES ARE NOT DOUBT ED. HOWEVER THE FACTS OF THE PRESENT CASE INDICATE THAT ASSESSEE HAS MADE PU RCHASE FROM THE GREY MARKET. MAKING PURCHASES THROUGH THE GREY MARKET GI VES THE ASSESSEE SAVINGS ON ACCOUNT OF NON-PAYMENT OF TAX AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SUCH SITUATION IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE 25% DISALLOWANCE OUT OF THE BOGUS PURC HASES DONE BY THE LEARNED CIT-A MEETS THE END OF JUSTICE. ACCORDINGLY, WE UPH OLD THE ORDER OF LEARNED CIT-A. 5. IN THE RESULT, THESE APPEALS FILED BY THE REVENU E STAND DISMISSED. PRONOUNCED IN THE OPEN COURT ON 11.3.2021. SD/- SD/- (RAMLAL NEGI) (SHAMIM YA HYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 11/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT DINESH PANDURANG KUDAV 3 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI