Appeal Details
Counselvise Citation
[2017] 126 COUNSELVISE.COM (IT) 8982 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 10 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-10-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
Not Allotted
Assessment Year
2010-2011
Appeal Filed On
09-12-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5562/MUM/2015 ASSESSMENT YEAR: 2010 - 11 ITO - 2(2)(1) R OOM NO. 549, 5 TH FLOOR, AAYAKAR BHAVAN , M.K. ROAD, MUMBAI - 400020. VS. M/S INMAC COMPUTERS PVT. LTD., 219, UDYOG BHAVAN, SONAWAL LANE, GOREGAON (E), MUMBAI - 400063. PAN NO. AAAC T 2085G APPELLANT RESPONDENT REVENUE BY : SHRI SAURABH KUMAR RAI , DR ASSESSEE BY : NONE DATE OF HEARING : 14 /09/2017 DATE OF PRONOUNCEMENT : 30/10/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2010 - 11. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 5, MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S 147 OF THE INCOME TA X ACT 1961, (THE ACT). 2. THE G ROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. M/S INMAC COMPUTERS PVT. LTD. ITA NO. 5562/MUM/2015 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO THE ELEMENT OF PROFIT EMBEDDED IN THE PURCHASE, WHEN THE WHOLE OF THE TRANSACTION WAS BOGUS. 3. BRIEFLY STATED, T HE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY 2010 - 11 ON 15.10.2010 DECLARING TOTAL INCOME OF RS.26,81,157/ - . THE ASSESSING OFFICER (AO) MADE THE ASSESSMENT U/S 143(3) ON 31.01.2013 DETERMINING THE TOTAL INCOME AT RS.27,4 7,680/ - . THEREAFTER, THE AO RECEIVED INFORMATION THAT THE ASSESSEE WAS INVOLVED IN BOOKING BOGUS PURCHASES OF RS.54,79,885/ - DURING THE IMPUGNED ASSESSMENT YEAR FROM THE HAWALA OPERATORS (BOGUS BILL ISSUER) WHO WERE DETECTED BY THE SALES TAX DEPARTMENT, GO VERNMENT OF MAHARASHTRA. THEREFORE, THE AO ISSUED NOTICE U/S 148 PROPOSING TO REOPEN THE ASSESSMENT COMPLETED U/S 143(3) ON 31.01.2013. THE ASSESSEE VIDE LETTER DATED 20.03.2013 STATED BEFORE THE AO THAT THE RETURN OF INCOME FILED U/S 139 BE TREATED AS RET URN FILED U/S 148. THE DISPUTE HERE IS THE PURCHASE OF COMPUTER VALUING AT RS.54,79,885/ - BY THE ASSESSEE FROM M/S AKSHAT ENTERPRISES. DURING THE COURSE OF REASSESSMENT PROCEEDINGS THE AO NOTICED THAT (I) THE NOTICE ISSUED U/S 1 33(6) TO M/S AKSHAT ENTERPRI SES FROM WHOM COMPUTER VALUING AT RS.54,79,885/ - WAS PURCHASED BY THE ASSESSEE WAS NOT REPLIED BY THEM, (II) THE ASSESSEE FAILED TO FURNISH ANY CONFIRMATION FROM M/S AKSHAT ENTERPRISES WITH REGARD TO THE PURCHASES FROM THEM. THEREFORE, THE AO MADE AN ADDI TION OF RS.54,79,885/ - AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. M/S INMAC COMPUTERS PVT. LTD. ITA NO. 5562/MUM/2015 3 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. SIMIT P. SHETH (2013) 38 TAXMANN.COM (GUJ) AND HELD 12.5% OF THE PURCHASES OF RS.54,79,885/ - AS BOGUS. THUS THE LD. CIT(A) RESTRICTED THE DISALLOWANCE OF RS.54,79,885/ - MADE BY THE AO TO RS.6,84,985/ - . 5. BEFORE US, THE LD. DR SUBMITS THAT THE NOTICE U/S 133(6) ISSUED BY THE AO TO M/S AKSHAT ENTERPRISES HAS NOT BEEN REPLIED. ALSO THE ASSESSEE FAILED TO FILE ANY CONFIRMATION OF THE ABOVE PARTY BEFORE THE AO. THEREFORE, IT IS SUBMITTED BY HIM THAT THE ADDITIO N OF RS.54,79,885/ - MADE BY THE AO U/S 69C BE FULLY CONFIRMED. 6. THE CASE WAS FIXED FOR HEARING ON 14.09.2017. THERE WAS NO COMPLIANCE BY THE ASSESSEE BEFORE THE TRIBUNAL ON THE ABOVE DATE. 7. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE CASE OF SIMIT P. SHETH (SUPRA), THE HONBLE GUJARAT HIGH COURT HAS HELD THAT WHERE PURCHASES WERE NOT BOGUS BUT WERE MADE FROM PARTIES OTHER THAN THOSE MENTIONED IN THE BOOKS OF ACCOUNT, NOT ENTIRE PURCHASE PRICE BUT ONLY PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE ADDED TO INCOME OF THE ASSESSEE. THAT BEING THE POSITION, NOT THE ENTIRE PURCHASE PRICE BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE ADDED TO THE INCOME OF THE ASSESSEE. THE HONBLE HIGH COURT REFERRED TO A SIMILAR VIEW TAKEN IN THE CASE OF CIT VS. VIJAY M. MISTRY CONSTRUCTION LTD. [2013] 355 ITR 498 (GUJ) AND CIT VS. BHOLANATH POLY FAB (P) LTD. [2013] 355 ITR 290 (GUJ). M/S INMAC COMPUTERS PVT. LTD. ITA NO. 5562/MUM/2015 4 FACTS BEING SIMILAR, WE UP HOLD THE ORDER OF THE LD. CIT(A) IN ESTIMATING THE PROFIT @ 12.5% ON THE SAID PURCHASES OF RS.54,79,885/ - WHICH COMES TO RS.6,84,985/ - . 8. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/10/2017. SD/ - SD/ - ( D.T. GARASIA ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 30/10/2017 RAHUL SHARMA, SR. P.S. 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// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI
