BIPIN UMAKANT JOSHI, MUMBAI V. INCOME TAX OFFICER 30(1)(2), MUMBAI

ITA 5794/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0390 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Bogus purchase; Accommodation entries; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 5794 / MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) SHRI BIPIN UMAKANT JOSHI GAYATRI ENTERPRISES, BLOCK - 3, SITASADAN, HAJI BAPU ROAD MALAD (EAST), MUMBAI 400 097 VS. ITO 30(1)(2) MUMBAI PAN/GIR NO. AACPJ1374N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI NIMESH CHOTHANI REVENUE BY SHRI RAM TIWARI DATE OF HEARING 22 / 11 /201 7 DATE OF PRONOUNCEME NT 19 / 02 /201 8 / 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) - 41, MUMBAI DATED 02/06/2017 FOR A.Y.2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. FOLLOWING GROUNDS HAVE BEEN TAK EN BY THE ASSESSEE: - 1. THE LD.CIT(A) - 41 ERRED IN NOT TREATING THE NOTICE ISSUED BY THE LD. AO U/S 148 AS BAD IN LAW AND INVALID. 2. THE LD. CIT(A) - 41 ERRED IN NOT TREATING THE REASSESSMENT PROCEEDINGS AS INVALID AND BAD IN LAW. 3. THE LD. CIT(A) - 41 ERRED IN RESTRICTING THE ADDITIONS MADE BY THE LD. AO TO RS. 2,78,747 / - BEING 30% OF TOTAL ALLEGED NON - GENUINE PURCHASES OF RS. 9,29,156 / - IN SPITE OF THE FACT THAT THE APPELLANT HAS ESTABLISHED THAT THE TOTAL PURCHASES MADE OF RS. 9,29,1567 - WERE GENUINE PURCHAS ES. 4. THE LD. CIT(A) - 41 ERRED IN NOT DELETING THE ADDITIONS MADE BY THE LD. AO OF RS. 63,131 / - FOR AD - HOC DISALLOWANCES BEING 15% OF THE ITA NO. 5794/MUM/2017 SHRI BIPIN UMAKANT JOSHI 2 EXPENSE, IN SPITE OF THE FACT THAT ALL THE EXPENSES ARE INCURRED FOR BUSINESS PURPOSE. 5. T HE LD. CI T(A) - 41 ERRED IN N OT DELETING THE ADDITIONS MADE BY THE LD. AO OF RS. 1,04,088 / - ON ACCOUNT OF LOWER AMOUNT DRAWINGS AND IGNORED THE DETAILS OF TOTAL DRAWINGS SUBMITTED FOR ALL FAMILY MEMBERS. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, ALTER, DELETE ANY GROUND OF APPEAL. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO WAS IN RECEIPT OF INFORMATION FROM DG I T(INV.),MUMBAI REGARDING SUSPICIOUS PARTIES AND THE ASSESSEE BEING ONE OF THE BENEFICIARIES OF BOGUS PURCHASE AND HAS ACQUIRED ACCOMMODATION ENTRIES OF BOGUS PURCHASE BILLS FROM FIVE PARTIES NAMELY M/S BRIGHT CORPORATION RS.4,02,555/ - , M/S BHAVANI TRADE LINK RS.4,85,175/ - , TRADELINK DISTRIBUTORS PVT.LTD, RS.20,872/ - , S.M. TRADING CO. RS.11,204/ - AND M/S PRAVESH E NTERPRISES RS.9,350/ - TOTA L AMOUNTING TO RS.9,29,156/ - . THEREFORE, THE CASE WAS REOPENED . 5. BASED ON THE ABOVE FACTS, THE AO TREATED RS.9,29,156/ - AS BOGUS PURCHASES AND ADDED THE SAME TO T HE TOTAL INCOME OF THE ASSESSEE. 6. BY THE IMPUGNED ORDER, CIT(A) R ESTRICTED THE ADDITION TO THE EXTENT OF 30% BY OBSERVING THAT CORRESPONDING SALES MADE BY THE ASSESSEE HAS NOT BEEN DISPUTED. ASSESSEE IS IN FURTHER APPEAL BEFORE ME. 7. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHO RITIES BELOW AND FOUND FROM RECORD THAT ASSESSEE IS A DEALER IN TOOLS ALLOY STEEL. DURING THE YEAR UNDER CONSIDERATION, ON THE BASIS OF INFORMATION FROM SALES TAX DEPARTMENT, AO HAS MADE ADDITION IN RESPECT OF SUSPICION SUPPLIERS, WHICH WAS RESTRICTED BY C IT(A) TO THE ITA NO. 5794/MUM/2017 SHRI BIPIN UMAKANT JOSHI 3 EXTENT OF 30%. ASSESSEE HAD SHOWN GP OF 5.66% DURING THE YEAR UNDER CONSIDERATION. BEFORE THE AO, ASSESSEE HAS FILED QUANTITATIVE DETAILS OF PURCHASES AND SALES, CONFIRMATION OF THE SUPPLIERS. KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCE S OF THE CASE, VIS - - VIS, GP DISCLOSED BY ASSESSEE, I DO NOT FIND ANY MERIT FOR FURTHER ADDITION OF 30%. I DIRECT TO RESTRICT ADDITION TO THE EXTENT OF 2% OF THE BOGUS PURCHASES. I DIRECT ACCORDINGLY. AO HAS ALSO MADE ADHOC DISALLOWANCE OF 15% IN RESPECT O F ALL THE EXPENDITURE INCURRED DURING THE YEAR. I FOUND THAT NOWHERE AO HAS POINTED OUT ANY EXPENDITURE HAVING BEEN INCURRED WITHOUT SUPPORTING BILLS, VOUCHERS. KEEPING IN VIEW PERSONAL ELEMENT OF THE EXPENDITURE, I DIRECT AO TO RESTRICT THE DISALLOWANCE T O THE EXTENT OF 5% OF THE EXPENDITURE OF RS.35,420/ - INCURRED ON TELEPHONE EXPENSES AND 5% ON THE CONVEYANCE EXPENSES OF RS.25, 5 20/ - SO INCURRED BY THE ASSESSEE. ACCORDINGLY TOTAL DISALLOWANCE IS RESTRICTED TO RS.3047/ - WHICH IS 5% OF 60,940/ - (RS.35,420/ - + RS.25,520/ - ). I DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 19 / 02 /201 8 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DAT ED 19 / 02 /201 8 KARUNA SR. PS ITA NO. 5794/MUM/2017 SHRI BIPIN UMAKANT JOSHI 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// ITA NO. 5794/MUM/2017 SHRI BIPIN UMAKANT JOSHI 5 DATE INITIAL 1. DRAFT DICTATED ON 08/01/2018 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 08/01/2018 (DICTATION PAD HAS BEEN ENCLOSED HEREWITH ALONGWITH ORIGINAL FILE ) SR.PS 3. DRAFT PROPOSED & PLACED BEFO RE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.