VAISHALI PHARMA PVT. LTD., MUMBAI V. DCIT - 13(3)(2), MUMBAI

ITA 5054/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8719 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 24-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2016
• Court: TRIBUNAL
• Assessee Lawyers: KEYURI DESAI
• Section: 143(3); 131

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, G MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO.5054/MUM/2016 ASSESSMENT YEAR: 2009-10 M/S VAISHALI PHARMA PVT. LTD. 706, 709, A WING, ARAVALI BUSINESS CENTRE, R.C. PATEL ROAD, BORIVALI (W), MUMBAI-400092 / VS. DCIT-13(3)(2), ROOM NO.229, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI-400020 ( !'# $ /ASSESSEE) ( / REVENUE) PAN. NO . AACCV7258G % & $ ' / DATE OF HEARING : 24/01/2017 & $ ' / DATE OF ORDER: 31/01/2017 !'# $ ! / ASSESSEE BY MISS KEYURI DESAI ! / REVENUE BY MISS ANUPAMA SINGLA-DR ITA NO.5054/MUM/2016 VAISHALI PHARMA PVT. LTD. 2 / O R D E R PER JOGINDER SINGH(JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 23/05/2016 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THE PRESENT APPEAL PERTAI NS TO UPHOLDING THE DISALLOWANCE MADE BY THE ASSESSING OF FICER OF RS.62,582/- AT THE RATE OF 12.5% OF THE BOGUS PURCH ASES OF RS.500,656/-. 2. DURING HEARING OF THIS APPEAL, MISS. KEYURI DES AI, LD. COUNSEL FOR THE ASSESSEE, CONTENDED THAT WHILE COMING TO A PARTICULAR CONCLUSION, THE LD. COMMISSIONER OF IN COME TAX (APPEAL) DID NOT APPRECIATE THE FACT THAT THE P URCHASES CANNOT BE TERMED AS BOGUS BECAUSE THE SUPPLIER WAS LISTED AS HAWALA DEALERS BY THE VAT AUTHORITIES AND FURTHE R THE ASSESSEE HAS NO POWERS TO CATCH THEM AND TO PRODUCE BEFORE THE ASSESSING OFFICER FOR CROSS EXAMINATION OR CONF IRMATION. IT WAS ALSO ASSERTED THAT THE LD. ASSESSING OFFICER HAS SAME POWERS WHICH ARE VESTED IN COURT UNDER THE CODE OF CIVIL PROCEDURE 1908 ENFORCING THE ATTENDANCE OF ANY PERS ON AS PER SECTION 131 OF THE ACT. ALTERNATIVELY, IT WAS C ONTENDED THAT THE ADOPTION OF DISALLOWANCE AT THE RATE OF 12 .5% IS HIGHLY EXCESSIVE. ON THE OTHER HAND, MISS. ANUPAMA SINGLA, LD. DR, DEFENDED THE ADDITION BY SUPPORTING THE IMP UGNED ORDER. ITA NO.5054/MUM/2016 VAISHALI PHARMA PVT. LTD. 3 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DECLARED INCOME OF RS.32,55,7 20/- IN ITS RETURN FILED ON 29/09/2009, WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) ON 09/02/2011. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ORDER U/S 143(3) OF THE A CT WAS PASSED ON 30/11/2011 ASSESSING THE TOTAL INCOME AT RS.36,41,630/-, WHILE DOING SO, ON THE BASIS OF INFORMATION RECEIVED, THE NAME OF M/S VAISHALI PHAR MA P. LTD., FROM WHOM THE ASSESSEE MADE TRANSACTIONS, WAS FOUND TO BE INDULGED IN HAWALA TRANSACTIONS BY ISSUING BO GUS PURCHASES, BILLS, WITHOUT ACTUAL DELIVERY OF GOODS OR MATERIAL. AS PER THE DEPARTMENT, THE ASSESSEE CLAIM ED EXCESS EXPENSES OF RS.500656/-ON THE BASIS OF BOGUS BILLS BY SHOWING THE PURCHASES FROM THESE TWO PARTIES NAM ELY AJANTA ENTERPRISES AND DAKSHA ENTERPRISES. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO S UBMIT THE DETAILS OF TRANSACTION ENTERED INTO WITH THESE PARTIES. THESE PARTIES, AS PER THE REVENUE, WERE NOT TRACEAB LE, THEREFORE, THE LD. ASSESSING OFFICER DEEMED IT FIT TO DISALLOW 12.5% OF THE VALUE OF TRANSACTION ENTERED INTO WITH THE AFORESAID PARTIES, WHICH COMES TO RS.62,582/- (12.5 % OF RS.5,00,656/-) AND ADDED TO THE INCOME OF THE ASSES SEE. 2.2. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THE STAND TAKEN IN THE ASSESSM ENT ORDER WAS AFFIRMED AND THE DISALLOWANCE MADE BY THE ITA NO.5054/MUM/2016 VAISHALI PHARMA PVT. LTD. 4 ASSESSING OFFICER ON ACCOUNT OF IMPUGNED BOGUS PURC HASES WAS AFFIRMED. THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, CONSIDERING THE TOTALIT Y OF FACTS AND CIRCUMSTANCES NARRATED BEFORE US, WE DIRECT THE LD. ASSESSING OFFICER TO MAKE THE ADDITION BY MAKING TH E DISALLOWANCE AT THE RATE OF 10% IN PLACE OF 12.5% S USTAINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THU S, THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. WE ARE MA KING IT CLEAR THAT OUR ABOVE CONCLUSION IS BASED UPON THE P ECULIAR FACTS OF THE PRESENT APPEAL AND MAY NOT BE QUOTED F OR FUTURE REFERENCES. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 24/01/2017. SD/- SD/- ( MANOJ KUMAR AGGARWAL ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER % MUMBAI; ) DATED : 31/01/2017 F{X~{T? P.S/. . . ITA NO.5054/MUM/2016 VAISHALI PHARMA PVT. LTD. 5 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT (RESPECTIVE ASSESSEE) 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( + ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI, 5. 34 .$! , 0 +' ! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. ! / BY ORDER, /3+$ .$ //TRUE COPY// /! (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI