PRATAP U PUROHIT, MUMBAI V. ACIT 32(2), MUMBAI

ITA 5518/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2289 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 09-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: NAVEEN KUMAR MISHRA
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH , JM ITA NO. 5518 / MUM/20 1 6 ( ASSESSMENT YEAR : 2007 - 08 ) SHRI PRATAP V . PUROHIT C/O. MOHANLAL JAIN & CO. CHARTERED ACCOUNTANTS 10, CHARTERED HOUSE, GROUND FLOOR, DR. C.H.STREET, MARINE LINES MUMBAI 400 002 VS. ACIT 32(2), C - 10, BANDRA KURLA COMPLEX BANDRA, MUMBAI PAN/GIR NO. AHCPP6451F ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI NAVEEN KUMAR MISHRA REVENUE BY SHRI MANOJ KUMAR SINGH DATE OF HEARING 26 / 08 /201 9 DATE OF PRONOUNCEMENT 28 / 08 /201 9 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 44, MUMBAI DATED 09/08/2016 FOR THE A.Y.2007 - 08 IN THE MATTER OF OR DER PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961. 2. IN THIS APPEAL, ASSESSEE IS AGGRIEVED FOR UPHOLDING THE ADDITION TO THE EXTENT OF 12.5% OF ALLEGED BOGUS PURCHASES WHICH AMOUNTS TO RS.13,75,308. AT THE OUTSET, THE LD. AR PLACED ON RECORD TH E ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y.2011 - 12, WHEREIN UNDER ITA NO. 5518/MUM/2016 SHRI PRATAP V PUROHIT 2 SIMILAR FACTS AND CIRCUMSTANCES, ADDITION ON ACCOUNT OF SIMILAR BOGUS PURCHASES WAS UPHELD TO THE EXTENT OF 2%. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. IN T HIS CASE, THE AO FOUND BOGUS PURCHASES DURING THE COURSE OF RE - ASSESSMENT PROCEEDINGS. HE ADDED 12.5% OF ALLEGED PURCHASES IN ASSESSEES INCOME WHICH WAS CONFIRMED BY THE LD. CIT(A). WE FOUND THAT UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE TRIBUNAL IN ASSE SSEES OWN CASE FOR THE A.Y. 2011 - 12 DATED 04/11/2016 HAD RESTRICTED ADDITION ON ACCOUNT OF BOGUS PURCHASES TO THE EXTENT OF 2%. THE PRECISE OBSERVATION OF THE TRIBUNAL IS AS UNDER: - 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT FOR THE IMPUGNED ASSESSMENT YEAR TOTAL PURCHASES FROM ALLEGED MVAT PARTIES WERE TO THE TUNE OF RS. 2,33,36,015/ - . PURSUANT TO SURVEY ACTION ON 27/02/2011, WHILE RECORDING THE STATEMENT THE ASSESSEE HIMSELF HAS OFFERED THESE PURCHASES AS HIS INCOME FOR A.Y. 2012 - 13, AS HE W AS UNABLE TO EXPLAIN THE SAME AT THE TIME OF SURVEY. THE AUTHORIZED OFFICER AT THAT TIME AGGREGATED THE PURCHASES MADE FROM ALLEGED MVAT PARTIES AND TOOK THE DISCLOSURE OF RS. 20CRS IN THE AY 2012 - 13. THE ASSESSEE HAS ALSO OFFERED THE SAID SUM OF RS. 20CRS AS HIS INCOME FOR AY 2012 - 13. A ITA NO.5193/14 & 1021/15 CATEGORICAL FINDING HAS BEEN RECORDED BY CIT(A) TO THE EFFECT THAT IMPUGNED PURCHASE OF RS.2,33,36,015/ - WAS OFFERED AS INCOME BY THE ASSESSEE IN THE ASSESSMENT YEAR 2012 - 2013. THIS FINDING OF CIT(A ) HAS NOT BEEN CONTROVERTED BY LEARNED DR BY BRINGING ANY POSITIVE MATERIAL ON RECORD. SINCE THE ASSESSEE BONAFIDELY OFFERED THE INCOME OF RS. 20CRS IN AY 2012 - 13 AND ALSO PAID THE DUE TAX ALONG WITH INTEREST THEREON, TAXING THE SAME IN THE IMPUGNED YEAR W ILL AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE SAID ADDITION. 7. WITH REGARD TO PURCHASES OF RS.92,40,232/ - , THE CIT(A) HAS UPHELD ADDITION OF 15% AMOUNTING TO RS.13,86,03 5/ - BEING PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. ITA NO. 5518/MUM/2016 SHRI PRATAP V PUROHIT 3 8. THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AGAINST THE ADDITION OF RS.13,86,035/ - AS UPHELD BY THE CIT(A). FROM THE RECORD, WE FOUND THAT WITH REGARD TO THESE PURCHASES, WHAT IS TO BE SEEN IS UTILISA TION OF GOODS PURCHASED WHICH HAS BEEN PROVED BY ASSESSEE BY PROVIDING ALL THE DETAILS. FROM THE RECORD WE FOUND THAT THE DURING YEAR UNDER CONSIDERATION, ASSESSEE HAD SALES OF RS.1,01,88,39,392/ - ON WHICH ASSESSEE HAS DECLARED GROSS PROFIT OF RS.17,79,05, 770/ - . THUS, ASSESSEE HAS DECLARED GROSS PROFIT RATE OF 17.46%. HOWEVER, IN THE ASSESSMENT YEAR 2009 - 2010 AND 2010 - 2011, THE GROSS PROFIT RATE SO DECLARED BY ASSESSEE WAS 8.60% AND 10.64% RESPECTFULLY. THUS, IT IS VERY MUCH CLEAR THAT DURING THE YEAR CONS IDERATION, ASSESSEE HAS DECLARED MUCH BETTER GROSS PROFIT RATE OF 17.46% AS COMPARED TO THE EARLIER YEARS, THEREFORE, MAKING FURTHER ADDITION OF 15% ON SUCH PURCHASE APPEAR TO BE VERY UNREASONABLE. THUS, KEEPING IN VIEW THE GROSS PROFIT RATE SO DECLARED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, WE UPHELD THE ADDITION OF 2% ON SUCH PURCHASES IN PLACE OF 15% AS UPHELD BY CIT(A). WE DIRECT ACCORDINGLY. 4. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE PARAMATERIA, RESPECTFUL LY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DIRECT THE AO TO RESTRICT THE ADDITION TO THE EXTENT OF 2% OF ALLEGED BOGUS PURCHASES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 / 08 /201 9 SD/ - ( PAWAN SINGH ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 28 / 08 /201 9 KARUNA SR. PS ITA NO. 5518/MUM/2016 SHRI PRATAP V PUROHIT 4 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT . REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//