Income Tax Officer Ward-3(1)(1), Mumbai V. M/s. Aman Marketing Services Pvt. Ltd., Mumbai

ITA 5024/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3595 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHI
• Keywords: Bogus purchase; Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , SMC BENCH MUMBAI BEFORE : SHRI M.BALAGANESH, AM & SHRI PAVAN KUMAR GADALE , JM ITA NO. 5024 /MUM/ 20 19 ( ASSESSMENT YEAR : 2009 - 10 ) ITO - 3(1)(1) ROOM NO.666, 6 TH FLOOR AAYAKAR BHAVAN M.K.ROAD, MUMBAI - 400020 VS. M/S. AMAN MARKETING SERVICES PVT. LTD., 115, SEALORD A CUFFE PARADE, MUMBAI - 400005 PAN/GIR NO. AABCA1799G (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI SANJAY SETHI ASSESSEE BY NONE DATE OF HEARING 15 / 02/ 202 1 DA TE OF PRONOUNCEMENT 17 / 02 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 5024/MUM/2019 FOR A.Y. 2009 - 10 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 8, MUMBAI IN APPEAL NO. CIT(A) - 8/IT - 289/15 - 16 DATED 27/05/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS ACT) BY THE LD. INCOME TAX OFFICER - 3 (1)(1), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 5024/MUM/2019 M/S. AMAN MARKETING SERVICES PVT. LTD., 2 2. TH E ONLY EFFECTIVE ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE MADE ON ACCOUNT OF BOGUS PURCHASES TO 12.5% OF VALUE THEREOF IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. NONE APPEARED ON BEHALF OF T HE ASSESSEE. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE RETAIL TRADING OF VARIOUS GIFT ITEMS. IT IS NOT IN DISPUTE THAT ASSESSEE HAD MADE CERTAIN PURCHASES TO TH E TUNE OF RS.64,20,454/ - FROM TEN PARTIES LISTED IN PAGES 1 & 2 OF THE ASSESSMENT ORDER WHOSE NAMES APPEAR TO BE TAINTED DEALERS IN THE SALES TAX DEPARTMENT WEBSITE OF GOVERNMENT OF MAHARASHTRA. ACCORDINGLY, THE LD. AO SOUGHT TO ADD THE PEAK VALUE OF THE P URCHASES THEREON AND MADE AN ADDITION OF RS.11,54,999/ - AS UNVERIFIABLE PURCHASES WHILE COMPLETING THE ASSESSMENT. IT IS NOT IN DISPUTE THAT THE SALES MADE OUT OF THE CORRESPONDING PURCHASES ARE NOT DISPUTED BY THE REVENUE BEFORE US. 3.1. APART FROM ABOVE , T HE LD. AO ADDED GROSS PROFIT @4% ON THE ALLEGED PURCHASE TRANSACTIONS TO THE TUNE OF RS.2,56,818/ - . THE LD. AO FURTHER ADDED THE COMMISSION FOR ARRANGING SUCH BOGUS PURCHASE BILLS AT 1% TO THE TUNE OF RS.64,204/ - WHILE COMPLETING THE ASSESSMENT. 4. W E FIND THAT SALES MADE OUT OF PURCHASES HAVE NOT BEEN DISPUTED BY THE REVENUE BEFORE US. HENCE, THE PROFIT ELEMENT ALONE COULD BE BROUGHT TO TAX WHICH WAS REASONABLY ESTIMATED AT 12.5% ON THE ALLEGED BOGUS PURCHASES OF RS. 64,20,454/ - BY THE LD. CIT(A) BY PLACING DUE RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P SHETH REPORTED IN 356 ITR 451. ONCE THE PROFIT ITA NO . 5024/MUM/2019 M/S. AMAN MARKETING SERVICES PVT. LTD., 3 ELEMENT AT 12.5% IS DIRECTED TO BE ADDED, THERE CANNOT BE ANY OTHER ADDITION TOWARDS COMMISSION AND OTHER ITEMS AS EVERYTHING GETS SUBSUMED IN THE PROFIT ELEMENT SOUGHT TO BE ADDED. HENCE W E DO NOT DEEM IT FIT TO INTERFERE IN THE SAID ACTION OF THE LD. CIT(A). ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON 17 / 02 / 202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( PAV AN KUMAR GADALE ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 17 / 02 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//