EMPEEF CHEMICALS P.LTD, MUMBAI V. ITO 12(2)(2), MUMBAI

ITA 5124/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0413 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 02-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: ASHOK L GOSAR
• Keywords: Accommodation entries
• Section: 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 5124/MUM/2017 : A.Y : 2010 - 11 M/S. EMPEEF CHEMICALS PVT. LTD., 12, VEENA APARTMENT, OPP. BHAGWATI HOSPITAL, S.V. ROAD, BORIVALI (W), MUMBAI 400 103. PAN : AAACE1386N (APPELLANT) VS. ITO - 12(2)(2), MUMBAI (RESPONDENT) APPELLANT BY : SHRI ASHOK L. GOSAR RESPONDENT BY : MS. N. HEMALATHA DATE OF HEARING : 19/02/2018 DATE OF PRONOUNCEMENT : 23 /02/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 20 , MUMBAI DATED 04.04.2017 , PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 , WHICH IN TURN HAS ARISEN FROM THE ORDER DATED 28.12.2015 PASSED BY THE ASSESSING OFFICER, MUMBAI UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. ALTHOUGH THE ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE SOLITARY DISPUTE IS WITH REGARD TO THE PURCHASES OF RS.19,12,778/ - , WHICH HAD BEEN HELD BY THE INCOME - TAX AUTHORITIES TO BE BOGUS. 2 ITA NO. 5124/MUM/2017 M/S. EMPEEF CHEMICALS PVT. LTD. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURE OF FERTILIZERS, CHEMICALS, PAINTS, ETC., AND IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD PU RCHASED GOODS FROM FOUR CONCERNS WHOSE NAMES APPEARED IN THE LIST OF HAWALA DEALERS PREPARED BY THE SALES TAX DEPARTMENT MEANING THAT SUCH PARTIES WERE NOT ACTUALLY CARRYING OUT THE BUSINESS OF PURCHASE OR SALE OF GOODS, BUT WERE MERELY PROVIDING ACCOMMODATION ENTRIES/BILLS. NOTICING THE FAILURE OF THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE PARTIES, AND NOTICING THE ABSENCE OF ANY PROOF OF TRANSPORTATION OF GOODS, THE ENTIRE PURCHASES OF RS.19,12,778/ - WAS CONSIDERED AS UNEXPLAINED AND ADDED TO THE RETURNED INCOME IN TERMS OF SEC. 69C OF THE ACT. THE CIT(A) HAS, IN - PRINCIPLE, AFFIRMED THE DECISION OF THE ASSESSING OFFICER, BUT RESTRICTED THE ADDITION TO 30% OF THE AMOUNT OF PURCHASES, WHICH CAME TO RS. 5,7 3 ,834 / - FOLLOWING, INTER - ALIA, THE RA TIO OF THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P. SHETH, 356 ITR 451 (GUJARAT) . NOT BEING SATISFIED WITH THE ORDER OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LEARNED REPRESENTA TIVE FOR THE ASSESSEE REFERRED TO THE DECISION OF THE TRIBUNAL IN ITA NO. 77/MUM/2017 DATED 30.06.2017 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10, WHEREIN IN A SIMILAR SITUATION, THE ADDITION WITH REGARD TO UNEXPLAINED PURCHASES HAS BEEN RESTRICTED TO 10% OF SUCH UNEXPLAINED PURCHASES. FOLLOWING THE SAID PRECEDENT, WHICH HAS BEEN RENDERED UNDER IDENTICAL CIRCUMSTANCES, I FIND NO REASON TO DISTRACT FROM THE PRECEDENT IN ASSESSEES OWN CASE DATED 30.06.2017 (SUPRA). ACCORDINGLY, THE ORDER OF CIT(A) IS SET - ASIDE AND THE 3 ITA NO. 5124/MUM/2017 M/S. EMPEEF CHEMICALS PVT. LTD. ASSESSING OFFICER IS DIRECTED TO RESTRICT THE ADDITION TO 10% OF THE STATED PURCHASES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 R D FEBRUARY, 2018. SD/ - (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 2 3 R D FEBRUARY, 2018 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, SMC BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI