INCOME TAX OFFICER-28(3)(4), MUMBAI V. SHRI V.C. CHANDRAN PILLAI, MUMBAI

ITA 5652/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1765 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 30-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Accommodation entries
• Section: 13

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5652 //2019 (. . 2011-12 ) ITA NO.5652/MUM/2019 (A.Y.2011-12) ITO-28(3)(4), ROOM NO. 320, 3 RD FLOOR, 6 TH TOWER, VASHI RLY STATION COMPLEX, VASHI, NAVI MUMBAI-400703. ...... ) / APPELLANT VS. SHRI V.C. CHANDRAN PILLAI FLAT NO. 302, PLOT NO. 91/92, SHIV KUNJ, SECTOR-28, VASHI, NAVI MUMBAI-400705. PAN: AAJPP2890E ..... *,/ RESPONDENT ) -/ APPELLANT BY : SH. SUSHIL KUMAR MISHRA *, -/ RESPONDENT BY : SH. ANKIT SHAH . / DATE OF HEARING : 30/03/2021 . / DATE OF PRONOUNCEMENT : 10/06/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-26, MUMBAI [HE REINAFTER REFERRED TO AS THE CIT(A)] DATED 10.06.2019 FOR THE ASSESSMENT Y EAR (AY) 2011-12. 2 . 5652 //2019 (. .2011-12 ) ITA NO.5652/MUM/2019 (A.Y.2011-12) 2. SHRI ANKIT SHAH APPEARED ON BEHALF OF THE ASSESS EE AND SUBMITTED THAT THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSMENT FOR AY 2011-12 IN THE CASE OF ASSESSEE WAS REOPENED ON THE PREMISE THAT THE ASSES SEE HAS OBTAINED ACCOMMODATION ENTRIES AMOUNTING TO RS. 8,52,783/- F ROM M/S GHATALIA SALES/DIVINE ENTERPRISES. DURING ASSESSMENT PROCEED INGS, THE ASSESSEE FURNISHED VARIOUS DOCUMENTS VIZ. STATEMENT OF CONTR ACT RECEIPTS, COPY OF BANK STATEMENTS, COPY OF PURCHASE BILLS ALONG WITH DELIV ERY CHALLANS AND WEIGH BRIDGE RECEIPTS, ETC. TO PROVE GENUINENESS OF THE S ALES. HOWEVER, THE AO WAS NOT CONVINCED WITH THE DOCUMENTARY EVIDENCES FURNIS HED BY THE ASSESSEE AND MADE ADDITION OF THE ENTIRE PURCHASES FROM THE AFOR ESAID DEALERS TREATING IT TO BE SUSPICIOUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 09.12.2016, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDER ING THE DOCUMENTS FURNISHED BY THE ASSESSEE AND THE GP DECLARED @ 10%, RESTRICT ED THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO 12.5%. NOW, THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) GRANTING PART RELIEF TO THE ASSESSEE. 2.1. THE ASSESSEE IN SUPPORT OF HIS CONTENTIONS PLA CED RELIANCE ON THE FOLLOWING DECISIONS: (1) PCIT V/S MD. HAJI ADAM & CO. IN ITA NO. 1004/2016 D ECIDED ON 11.02.2019 BY HONBLE BOMBAY HIGH COURT. (2) PCIT V/S RISHABHDEV TECHNO CABLE LTD. IN ITA NO. 13 30/2017 DECIDED ON 10.02.2020 BY HONBLE BOMBAY HIGH COURT. 3 . 5652 //2019 (. .2011-12 ) ITA NO.5652/MUM/2019 (A.Y.2011-12) (3) PCIT V/S PINAKI D. PANANI IN ITA NO. 1543/2017 DECI DED ON 08.01.2020 BY HONBLE BOMBAY HIGH COURT. 3. ON THE OTHER HAND, SHRI SUSHIL KUMAR MISHRA REPR ESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR 100% ADDITION OF BOGUS PURCHASES. IN SUPPORT OF HIS CONT ENTIONS, THE LD. DR PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT O F INDIA IN THE CASE OF N.K. PROTEINS LTD. V/S DCIT. 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW E XAMINED. THE ASSESSEE HAS ALLEGEDLY OBTAINED BOGUS PURCHASES BILLS FROM H AWALA OPERATORS. THE AO DISALLOWED ENTIRE ALLEGED BOGUS PURCHASES. AT THE S AME TIME, THE AO ACCEPTED SALES TURNOVER DECLARED BY THE ASSESSEE. IN SUCH CI RCUMSTANCES, IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES THAT HAS TO BE BROUGHT TO TAX. THE ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE DISALLOWED . (RE: PCIT VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD. IN ITA NO. 413 OF 2017 DECID ED ON 15.07.2019). THE CIT(A) HAS ESTIMATED GP ON BOGUS PURCHASES AT 12.5%. I FIN D NO INFIRMITY IN THE IMPUGNED ORDERS, THEREFORE, THE SAME IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 10 TH DAY OF JUNE, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3/ DATED:10/06/2021 4 . 5652 //2019 (. .2011-12 ) ITA NO.5652/MUM/2019 (A.Y.2011-12) SK, PS * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *, / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI