PARESH PANCHAL, MUMBAI V. ITO 21(3)(4), MUMBAI

ITA 5203/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100817 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN ,AM AND LALIT KUMAR, JM ./ I.T.A. NO 5 203 / MUM/20 14 ( / ASSESSMENT YEAR : 20 10 - 11 ) SHRI PARESH PANCHAL, M - 3, MEHRA INDL ESTATE, OPP, ORKAY MILL, ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI - 400072 / VS. INCOME TAX OFFICER, 21(3)(4), BANDRA KURLA COMPLEX, MUMBAI. ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AEPPP0046J / APPELLANT BY SHRI JAYANT R BHAT / RSPONDENT BY SHRI AIRIJU JAIKRAN / DATE OF HEARING : 17 .8 . 201 5 / DATE OF PRONOUNCE MENT: 1 7 . 8. 201 5 / O R D E R PER B.R.BASKARAN, AM: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 20.06. 2014 PASSED BY THE LD. CIT(A) - 32 , MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 20 10 - 11 . 2. THE SOLITARY ISSUE URGED I N THIS APPEAL RELATES TO THE ADDITION OF R S. 3,31,501/ - RELATING TO BOGUS PURCHASES. 3. THE FACTS RELATING TO THE ISSUE CITED ABOVE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CAD/CAM SOFTWARE AND EXECUTION OF TOOLING SERVICES. THE ASSESSEE HAD PU RCHASED MATERIAL FROM THE FOLLOWING TRADERS AND CLAIMED THE SAME AS DEDUCTION: ITA NO. 5 203 / MUM/20 14 2 A) M/S ARIHANT TRADER RS.1,87,909/ - B) M/S SAMIR TRADING CORPORATION RS.1,43,592/ - . ---------------- RS.3,31,501/ - ======== DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE NAME OF THE ABOVE SAID TWO TRADERS FOUND PLACE IN THE LIST OF DEALERS IDENTIFIED BY THE SALES TAX DEPARTMENT AS T HE PERSONS ISSUING BOGUS /ACCOMMODATION BILLS. HENCE, THE AO MADE INQUIRIES WITH THE ASSES SEE. DURING THE COURSE OF INQUIRY, THE ASSESSEE AGREED THAT HE HAS AVAILED BILL S FROM THESE TWO PERSONS AND HE ALSO AGREED TO OFFER GROSS PROFIT ON THE AMOUNT OF PURCHASES , IN ORDER TO PURCHASE PEACE FROM THE DEPARTMENT . THE AO , HOWEVER, DISALLOWED THE AB OVE SAID AMOUNT OF RS.3,31,501 / - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE . THE LD.CIT(A) ALSO CONFIRMED THE SAID ADDITION AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 4 . THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE IS MAINTAINING STOCK REGISTER WHEREIN THE PURCHASE AND USAGE OF MATERIAL HAVE BEEN PROPERLY RECORDED. HE FURTHER SUBMITTED THA T THE ASSESSEE HAD DULY ACCOUNTED THE PURCHASE AND ALSO THE DETAILS OF PAYMENT MADE TOWARDS THE SAME IN HIS ACCOUNT BOOKS . HE SUBMITTED THAT THE TAX AUTHORITIES HAVE MA D E THE ADDITION WITHOUT EXAMINING THE RELEVANT DOCUMENTS. THE LD. COUNSEL FURT HER SUBMITTED THAT THE ASSESSEES ACQUIESCENCE FOR GROSS PROFIT ADDITION WAS ONLY WITH THE PURCHASE TO BUY PEACE FR OM THE DEPARTMENT AND TO BRING THE DISPUTE TO AN END. HOWEVER, THE TAX AUTHORITIES HAVE USED THE SAME TO TAKE ADVERSE DECISION AGAINST THE ASSESSEE. THE LD. AR SUBMITTED THAT THE ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO PRODUCE ALL THE RELEVANT D OCUMENTS BEFORE THE AO IN ORDER TO PROVE THE GENUINENESS OF THE PURCHASE. ITA NO. 5 203 / MUM/20 14 3 5 . THE LD. DR DID NOT OBJECT TO THE PLEA PUT FORTH BY THE LD. AR. 6 . HAVING REGARD TO THE SUBMISSIONS MA D E BY THE PARTIES, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO PROVE THE GENUINENESS OF THE PURCHASE S , SINCE THE RELEVANT DOCUMENTS HAVE NOT BEEN EXAMINED BY THE AO. ACCORDINGLY , WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THIS ISSUE AFRESH BY DULY CONSIDERING ALL THE INFORMATION, EXPLANATION AND DOCUMENTS THAT MAY BE FURNISHED BY THE ASSESS E E BEFORE HIM. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCO RDINGLY ON 1 7 TH AUGUST 2015. 1 7 TH AUGUST, 2015 SD SD ( LALIT KUMAR) ( B.R. BASKARAN) J UDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 1 7 TH AUG , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDE NT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI