STG INFASTRUCTURE, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX - 12(1), MUMBAI

ITA 5189/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1504 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 08-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH , JM ITA NO.5189/MUM/2017 (ASSESSMENT YEAR: 2010-11) STG INFRASTRUCTR 104, BHARAT HOUSE, 1 ST FLOOR BOMBAY SAMACHAR MARG FOR, MUMBAI-400 001 VS. ACIT - 12(1) AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AAAFV3045L ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : NONE RESPONDENT BY : ASHISH KUMAR DATE OF HEARING : 01.01.2019 DATE OF PRONOUNCEMENT : 15. 03.2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-28, MU MBAI (LD.CIT(A) FOR SHORT) DATED 04.05.2017 AND PERTAINS TO THE ASS ESSMENT YEAR (A.Y.) 2010-11. 2. THIS IS AN APPEAL BY THE ASSESSEE WHEREIN THE AS SESSEE IS AGGRIEVED THAT THE LD. CIT(A) HAS ERRED IN SUSTAINI NG 100% DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES AMOUNTIN G TO RS.18,24,489/-. 3. THE AO IN THIS CASE HAS MADE 100% ADDITION ON AC COUNT OF BOGUS PURCHASE AMOUNTING TO RS.18,24,489/- FROM 2 PARTIES . UPON ASSESSEES APPEAL LD. CIT(A) CONFIRMED THE SAME. 2 ITA NO.5189/MUM/2017 STG INFRASTRUCTURE 4. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BE FORE THE ITAT. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE NOTICE. 5. UPON CAREFUL CONSIDERATION WE FIND THAT ASSESSEE HAS PROVIDED THE DOCUMENTARY EVIDENCE FOR THE PURCHASE. ADVERSE INFERENCE HAVE BEEN DRAWN DUE TO THE INABILITY OF THE ASSESSEE TO PRODUCE THE SUPPLIERS AND ABSENCE OF TRANSPORTATION DETAILS. WE FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED. IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED, 100% DISALLOWANCE FOR BOGUS PURCHASE CANNO T BE DONE. THE RATIONALE BEING NO SALES IS POSSIBLE WITHOUT ACTUAL PURCHASES. THIS PROPOSITION IS SUPPORTED FROM HONOURABLE JURISDICTI ONAL HIGH COURT DECISION IN THE CASE OF NIJUNJ EXIMP ENTERPRISES (I N WRIT PETITION NO 2860, ORDER DATED 18.06.2014). IN THIS CASE THE HON OURABLE HIGH COURT HAS UPHELD 100% ALLOWANCE FOR THE PURCHASES SAID TO BE BOGUS WHEN SALES ARE NOT DOUBTED. HOWEVER, IN THAT CASE ALL TH E SUPPLIES WERE TO GOVERNMENT AGENCY. IN THE PRESENT CASE THE FACTS OF THE CASE INDICATE THAT ASSESSEE HAS MADE PURCHASE FROM THE GREY MARKE T. MAKING PURCHASES THROUGH THE GREY MARKET GIVE THE ASSESSEE SAVING ON ACCOUNT OF NON-PAYMENT OF TAX AND OTHERS AT THE EXP ENSE OF THE EXCHEQUER. IN SUCH SITUATION IN OUR CONSIDERATION O PINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE 12.5% DISALLOWANC E OUT OF BOGUS 3 ITA NO.5189/MUM/2017 STG INFRASTRUCTURE PURCHASES WOULD MEET THE END OF JUSTICE. HENCE WE M ODIFY THE ORDER OF LD. CIT(A) ACCORDINGLY. 6. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED ON 15 TH MARCH, 2019. SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 15.03.2019 THIRUMALESH , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI