HIMMAT LAL G. THAKKAR, MUMBAI V. ITO, WARD 22(1)(5), MUMBAI

ITA 5315/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1905 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANOOP
• Keywords: Bogus purchase

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 5315/MUM/2019 (ASSESSMENT YEAR 2010-11) & I.T.A. NO. 5316/MUM/2019 (ASSESSMENT YEAR 2011-12) HIMMATLAL G.THAKKAR 55-E, KEDARNATH CHAWL, DR.AMBEDKAR ROAD KHAR WEST, PAN : AAAPT4805A VS. ITO,WARD - 22(1)(5) PIRAMAL CHAMBER LOWER PAREL MUMBAI-400 013 ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI ANOOP - DR DATE OF HEARING 1 9 .05 .2021 DATE OF PRONOUNCEMENT 01.07 .2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE APPEALS BY THE ASSESSEE WHEREIN THE ASSE SSE IS AGGRIEVED THAT THE LD.CIT(A) HAS ERRED IN SUSTAINING 12.5% DISALLOWANC E ON ACCOUNT OF BOGUS PURCHASES VIDE COMMON ORDER DATED 09.05.2019. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSE IS ENGA GED IN THE BUSINESS OF PRINTING INFORMATION WAS RECEIVED FROM THE SALES TAX DEPARTM ENT THAT ASSESSEE HAS ENGAGED IN BOGUS PURCHASES. THE ASSESSMENT WAS ACCORDINGLY REO PENED. EXCEPT FOR BANK STATEMENT ASSESSEE DID NOT PROVIDE ANY EVIDENCE IN SUPPORT OF THE PURCHASES. EVEN, THE PURCHASE BILLS WERE NOT PROVIDED TO AO. HIMMATLAL G.THAKKAR 2 3. THE AO IN THIS CASE HAS MADE 15.08% ADDITION O N ACCOUNT OF BOGUS PURCHASE. THE DISALLOWANCE CAME TO RS.8,35,389/- FOR AY 2010-11 A ND RS.16,96,623 FOR AY 2011- 12. UPON ASSESSEES APPEAL LD.CIT(A) REDUCED THE SA ME TO 12.5%. 4. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE THE ITAT. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD. 5. UPON CAREFUL CONSIDERATION, WE FIND THAT THE AS SESSEE HAS NOT PROVIDED ANY DOCUMENTARY EVIDENCE FOR THE PURCHASE. ADVERSE INFE RENCE HAVE ALSO BEEN DRAWN DUE TO THE INABILITY OF THE ASSESSEE TO PRODUCE THE SUP PLIERS. HOWEVER, WE NOTE THAT THE SALES HAVE NOT BEEN DOUBTED. IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED, 100% DISALLOWANCE FOR BOGUS PURCHASE CANNOT BE DONE. THE RATIONALE BEING NO SALES IS POSSIBLE WITHOUT ACTUAL PURCHASES. THIS PROPOSITION IS SUPPORTED FROM HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF N IKUNJ EXIMP ENTERPRISES (IN WRIT PETITION NO.2860, ORDER DATED 18.06.2014). IN THIS CASE, THE HONBLE HIGH COURT HAS UPHELD 100% ALLOWANCE FOR THE PURCHASES SAID TO BE BOGUS, WHEN SALES ARE NOT DOUBTED. HOWEVER, IN THAT CASE ALL THE SUPPLIES WER E TO GOVERNMENT AGENCY. IN THE PRESENT CASE, THE FACTS OF THE CASE INDICATE THAT A SSESSEE HAS MADE PURCHASE FROM THE GREY MARKET. MAKING PURCHASES THROUGH THE GREY MARK ET GIVES THE ASSESSEE SAVINGS ON ACCOUNT OF NON-PAYMENT OF TAX AND OTHERS AT THE EXP ENSE OF THE EXCHEQUER. IN SUCH SITUATION IN MY CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE 12.5% DISALLOWANCE OUT OF THE BOGUS PURCHASES MEETS THE END OF JUSTICE. 6. HENCE, W AFFIRM THE ORDER OF LD.CIT(A) 7. IN THE RESULT, ASSESSEES APPEALS ARE DISMISSE D. HIMMATLAL G.THAKKAR 3 PRONOUNCED IN THE OPEN COURT ON 01.07.2021 SD/- SD/- (AMARJIT SINGH) (SHAM IM YAHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 01/07/2021 SR.PS. THIRUMALESH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) ITAT, MUMBAI