MAGAN V PRAJAPATI, MUMBAI V. INCOME TAX OFFICER 19(2)(3), MUMBAI

ITA 5640/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6111 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Bogus purchase; Set aside
• Section: 143(3); 37(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM ITA NO. 5639 & 5640/MUM/2019 ( ASSESSMENT YEAR: 2009-10 & 2010-11) MAGAN V PRAJAPATI, ROOM NO. 15, 2 ND FLOOR, KAMAL NIWAS 39/41, BHANDARI STREET, MUMBAI-400004. VS. I.T.O.-19(2)(3) MATRU MANDIR BUILDING, 1 ST & 2 ND FLOOR, NANA CHOWK, BHATIA HOSPITAL LANE, JAVJI DADAJI MARG, GRANT ROAD WEST, MUMBAI-400007. PAN/GIR NO.ANWPP 7146 B (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI BHARAT KUMAR (AR) REVENUE BY SHRI AMIT PRATAP SINGH (DR) DATE OF HEARING 10/02/2020 DATE OF PRONOUNCEMENT 10/02/2020 / O R D E R PER: R.C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE SEPARATE EX PARTE ORDERS OF THE LD. CIT(A)-30, MUMBAI DATED 26/ 06/2019 AND 25/06/2019 FOR THE A.Y. 2009-10 AND 2010-11 RESPECT IVELY IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN TRADING O F FERROUS AND NON- FERROUS METALS. THE A.O. GOT INFORMATION REGARDING ASSESSEE INVOLVED IN TAKING ACCOMMODATION BILL WITH REGARD TO PURCHASES WITHOUT DELIVERY OF ITA NO. 5639 & 5640/MUM/2019 MAGAN V PRAJAPATI VS ITO 2 THE GOODS. AFTER MAKING ENQUIRY, THE A.O. ADDED 12. 5% OF SUCH BOGUS PURCHASES IN ASSESSEES INCOME. AGAINST THE ORDER O F THE A.O., THE ASSESSEE APPROACHED TO THE LD. CIT(A) WHO BY PASSIN G EX PARTE ORDER HAS DISMISSED THE APPEALS OF THE ASSESSEE AND ALSO ENHA NCED THE ADDITION TO THE EXTENT OF 100% OF ALLEGED BOGUS PURCHASES. 3. IN THE APPEAL ORDER, THE LD. CIT(A) HAS MENTIONE D THAT VARIOUS NOTICES WERE ISSUED TO THE ASSESSEE, HOWEVER, THERE WAS NO COMPLIANCE BY THE ASSESSEE. THEREAFTER NOTICES OF ENHANCEMENT WERE ISSUED BUT THERE WAS NO COMPLIANCE. FROM THE ORDER OF THE LD. CIT(A), IT APPEARS THAT HE HAS DISCUSSED VARIOUS JUDICIAL PRONOUNCEMENTS IN CLUDING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S MOHOMMAD HAJI ADAM & CO. WHEREIN THE HONBLE HIGH COURT HAS UPHEL D THE ORDER OF THE TRIBUNAL FOR MAKING ADDITION ONLY TO THE EXTENT OF DIFFERENCES BETWEEN THE GROSS PROFIT OFFERED IN CASE OF NORMAL PURCHASES VI S A VIS BOGUS PURCHASES. HOWEVER, THE LD. CIT(A) DID NOT ACCEPT T HE DECISION OF THE HONBLE BOMBAY HIGH COURT ON THE PLEA THAT THIS DEC ISION IS NOT BASED ON AN ARGUMENT WITH RESPECT OF SECTION 37(1) OF THE IN DIAN EVIDENCE ACT. ACCORDINGLY, THE LD. CIT(A) HAS OBSERVED THAT WITH UTMOST RESPECT, THIS DECISION, THOUGH NO CITED BY THE APPELLANT, CANNOT BE RELIED UPON. 4. THE LD. CIT(A) HAS NOT GIVEN ANY JUSTIFICATION F OR ENHANCEMENT OF ADDITION FROM 12.5% TO 100%, THEREFORE, IN THE SUBS TANTIAL INTEREST OF JUSTICE, WE SET ASIDE THE EX PARTE ORDER OF THE LD. CIT(A) AND RESTORE THE ITA NO. 5639 & 5640/MUM/2019 MAGAN V PRAJAPATI VS ITO 3 MATTER BACK TO THE FILE OF LD. CIT(A) FOR DECIDING THE MATTER AFRESH ON MERIT AFTER PROVIDING DUE AND REASONABLE OPPORTUNIT Y OF HEARING TO THE ASSESSEE. 5. SINCE THE FACTS AND CIRCUMSTANCES OF BOTH THE YE ARS ARE SAME, THEREFORE, BY FOLLOWING THE REASONING GIVEN IN THE APPEAL FOR THE A.Y. 2009-10, I ALSO RESTORE THE MATTER FOR THE A.Y. 201 0-11 TO THE FILE OF THE LD. CIT(A). 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY, 2020. SD/- (VIKAS AWASTHY) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 10/02/2020 *RANJAN 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//