ACIT-27(2), , MUMBAI V. M/S. MEHTA VET CHEM, MUMBAI

ITA 5228/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8893 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 08-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 37

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! ,'# '$ BEFORE VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 5228/ / 2019 (. . 2010-11 ) ITA NO.5228/MUM/2019(A.Y.2010-11) ACIT-27(2), ROOM NO.420, 4 TH FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI -400 703 ...... ) / APPELLANT VS. M/S. MEHTA VET CHEM, 203,VENUS APARTMENT, NATHPAI NAGAR, GHATKOPAR EAST, MUMBAI -400 077. PAN:AAIFM3834M ..... !*/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS.SMITA VERMA +* / DATE OF HEARING : 09/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 11/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 25, MUMBAI (IN SHORT THE CIT (A)) DATED 27/05/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. MS.SMITA VERMA REPRESENTING THE DEPARTMENT SUB MITTED THAT ENQUIRIES CONDUCTED IN THE CASE OF ONE YOGESH DILIP WAGHELA BY THE INVESTIGATION WING IT TRANSPIRED THAT LARGE CREDITS WERE RECEIVED IN HIS BANK ACCOUNT FROM VARIOUS 2 . 5228/ / 2019 (. . 2010-11 ) ITA NO.5228/MUM/2019(A.Y.2010-11) BENEFICIARIES. LATER ON, CASH WAS WITHDRAWN FROM TH E BANK ACCOUNT. AFTER ANALYSING THE BANK STATEMENT OF M/S. BROWN PHARMACEUTICALS & CHEMICALS, ONE OF THE CONCERN CONTROLLED BY YOGESH DILIP WAGHELA WITH HDFC BANK , ORLEM BRANCH MALAD(WEST), MUMBAI A CREDIT ENTRY OF RS,3,16,200/- ON 17/03/ 2010 WAS FOUND. THIS WAS ACCOMMODATION ENTRY FOR ALLEGED PURCHASE BY ASSESSE E THROUGH RTGS. SUBSEQUENTLY, THE CASH WAS WITHDRAWN. ON ANALYSIN G THE MODUS OPERANDI ADOPTED BY YOGESH DILIP WAGHELA IT IS EVIDENT THAT THE AM OUNT TRANSFERRED BY THE ASSESSEE THROUGH BANKING TRANSACTION HAS TRAVELLED BACK TO T HE ASSESSEE IN CASH. THE ASSESSING OFFICER REJECTED ASSESSEES BOOKS OF ACCO UNT AND DISALLOWED THE EXPENDITURE OF RS.3,16,200/- BEING BOGUS TRANSACTIO N AND MADE ADDITION UNDER SECTION 37 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THE ASSESSEE CARRIED THE ISSUE BEFORE THE CIT(A). THE CIT(A) IN PRINCIPLE U PHELD THE FINDINGS OF ASSESSING OFFICER I.E. TRANSACTION BEING BOGUS, BUT RESTRICT ED THE ADDITION TO 12.5% OF THE ALLEGED BOGUS TRANSACTION. HENCE, THE PRESENT APPE AL BY THE REVENUE. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ONCE THE TRANSACTION IS HELD TO BE BOGUS AND HAS BEEN DISALLOWED UNDER SECTION 37 OF THE ACT THERE IS NO QUESTION OF ESTIMATING ANY G.P ON SUCH TRANSACTION. 3. WE HAVE HEARD THE SUBMISSIONS MADE BY LD.DEPARTM ENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. A P ERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2010- 11 IN THE CASE OF ASSESSEE WAS REOPENED ON THE BASIS OF INVESTIGATION CONDUCTED B Y THE DEPARTMENT IN THE CASE OF YOGESH DILIP WAGHELA, AN ACCOMMODATION ENTRY PROV IDER. THE MODUS OPERANDI OF YOGESH DILIP WAGHELA AS NARRATED IN THE ASSESSMENT ORDER, IS THAT THE AMOUNT WAS CREDITED IN HIS BANK ACCOUNT THROUGH BANKING CHANN ELS BY THE BENEFICIARIES AND THE SAME AMOUNT WAS WITHDRAWN IN CASH. THE ASSESSEE IS A DEALER IN PHARMACEUTICALS, CHEMICALS AND ANIMAL FEED SUPPLEMENTS. THE SALES T URNOVER DECLARED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE REVENUE. WIT HOUT PURCHASES THERE CANNOT BE SALES. THE CIT(A) IN THE IMPUGNED ORDER HAS OBSERVE D THAT THE ASSESSEE HAS BEEN 3 . 5228/ / 2019 (. . 2010-11 ) ITA NO.5228/MUM/2019(A.Y.2010-11) ABLE TO ESTABLISH ONE TO ONE LINK BETWEEN PURCHASE S AND THE SALES. THE POSSIBILITY OF PURCHASING GOODS FROM GREY MARKET AND THEREAFTE R OBTAINING MATCHING PURCHASE BILLS FROM M/S. BROWN PHARMACEUTICALS & CHEMICALS, CANNOT BE RULED OUT . THE CIT(A) ESTIMATED THE PROFIT EMBEDDED IN BOGUS TRANSACTION AT 12.5%. THE ESTIMATION OF PROFIT ON BOGUS PURCHASES BY CIT(A) IS IN LINE WITH THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT VS. PARAMSHAKHTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO.413 OF 2017 DECIDED ON 15/07/2 019 BY HON'BLE BOMBAY HIGH COURT . THE ORDER OF CIT(A) WARRANTS NO INTERFERENCE AND THE SAME IS UPHELD. THE APPEAL BY REVENUE IS DISMISSED SANS MERIT. 4. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 11 TH DAY OF MARCH, 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 11/03/2021 VM , SR. PS (O/S) !*12'.* COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. !* / THE RESPONDENT. 3. 3* ( )/ THE CIT(A)- 4. 3* CIT 5. 45!* , . . . , / DR, ITAT, MUMBAI 6. 56789 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI