ITO , WD-3(2), KALYAN V. TARUN PUNSHI GOSAR HUF, DOMBIVALI

ITA 5095/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0252 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Assessee Lawyers: KETAN GUDU
• Keywords: Bogus purchase; Reason to believe
• Section: 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5095/M/2018 ASSESSMENT YEAR: 2011-12 ITO WARD-3(2), 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN (W), KALYAN -421301 VS. SHRI TARUN PUNSHI GOSAR HUF, PROP. OF MAHAVIR PACK PLAST, GROUND FLOOR, DHARMA PATIL COMPOUND, KALYAN SHIL ROAD, DOMBIVALI (E), MUMBAI PAN: AACHG 1094A (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI KETAN GUDU, A.R. REVENUE BY : SHRI R. BHOOPATHI, D.R. DATE OF HEARING : 17.09.2019 DATE OF PRONOUNCEMENT : 22.10.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 26.06.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12 CHALLENGING THE DELETION OF ADDITION TO THE EXTENT OF RS. 74,460/- AS AGAINST A DDITION OF RS. 3,63,815/- MADE BY THE ASSESSING OFFICER TOWARDS BO GUS PURCHASES. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE RETURN OF INCOME ON 31.08.2011 DECLARING INCOME OF RS.4,68,06 0/- WHICH ITA NO.5095/M/2018 SHRI TARUN PUNSHI GOSAR HUF 2 WAS PROCESSED UNDER SECTION 143(1). SUBSEQUENTLY, THE AO RECEIVED THE INFORMATION FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA THAT ASSESSEE IS BENEFICI ARY OF HAWALA PURCHASE ENTRIES FROM TWO PARTIES NAMELY M/S . DEEPALI ENTERPRISES RS.2,16,710/- AND M/S. REKHA TRADING CO MPANY RS.1,47,105/- AGGREGATING TO RS.3,63,815/-. THE AO AFTER RECORDING THE REASON TO BELIEVE ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 10.05.2013 AND THUS REOPENED THE ASSE SSMENT OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROC EEDINGS THE INFORMATION AND DETAILS WERE CALLED FOR FROM THE AS SESSEE. THE ASSESSEE SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE GP IN THE CURRENT YEAR IS 8.06 % VIS--VIS GP IN THE EARLIER YEAR 9.05%. THE ASSESSEE ALSO FI LED COPIES OF BILLS, VOUCHERS AND PAYMENT DETAILS. HOWEVER, ASSE SSEE COULD NOT PRODUCE THE PARTIES AS DIRECTED BY THE AO. MOR EOVER, THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT COUL D NOT SERVED. THE INSPECTOR, INCOME TAX REPORTED THAT NO SUCH PAR TIES EXISTED ON THE GIVEN ADDRESSES. FINALLY, THE AO TREATING T HE ENTIRE PURCHASES AS BOGUS, ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PAR TLY ALLOWED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ADDITI ON TO THE EXTENT OF RS.2,14,895/- WHILE DELETING THE ADDITION TO THE TUNE OF RS.74,460/- WHICH WAS CALCULATED BY THE LD. CIT(A) BY COMPARING THE CURRENT YEAR GP WHICH WAS 8.06% TO TH E PREVIOUS YEAR IT WAS 9.86% AND THE DIFFERENCE OF 1.8% WAS AD DED TO THE INCOME OF THE ASSESSEE RESULTING INTO THE PARTIAL S USTENANCE OF ADDITION TO THE TUNE OF RS.2,14,895/-. NOW THE REV ENUE IS IN APPEAL BEFORE US CHALLENGING THE ORDER OF LD. CIT(A ). ITA NO.5095/M/2018 SHRI TARUN PUNSHI GOSAR HUF 3 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THE ADDITION F OR BOGUS PURCHASE WAS MADE TO THE TUNE OF RS.3,63,815/- WHER EAS LD. CIT(A) SUSTAINED ADDITION TO THE TUNE OF RS.2,14,89 5/- WHICH MEANS THAT ADDITION OF 59% APPROXIMATELY WAS SUSTAI NED BY LD. CIT(A) WHICH IS QUITE HIGH . IN VIEW OF THESE FACT S, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) AS SUBSTANTIAL ADDITION HAS BEEN SUSTAINED BY APPLYING THE DIFFERE NTIAL GP BY TAKING THE CURRENT YEAR GP VIS--VIS THE EARLIER GP . ACCORDINGLY, WE ARE INCLINED TO DISMISS THE APPEAL OF THE REVENU E BY UPHOLDING THE ORDER OF LD. CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.10.2019. SD/- SD/- (VIKAS AWASTHY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 22.10.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.