ANJ TURNKEY PROJECTS PRIVATE LIMITED, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX 12(1)(1), MUMBAI

ITA 5852/MUM/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0930 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MICHAEL JERALD
• Keywords: Bogus purchase; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 5852/MUM/2019 ASSESSMENT YEAR : 2009-10 M/S.ANJ TURNKEY PROJECTS PRIVATE LIMITED, C/O.M/S.JAYESH SANGHRAJKA AND CO LLP, 405-408, HIND RAJASTHAN CENTRE, DS PHALKE ROAD, DADAR (EAST) MUMBAI [PAN : AAHCA0115C] VS. THE DEPUTY COMMISSIONER OF INCOME TAX-12(1)(1), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MARGAV SHUKLA, AR RESPONDENT BY : SHRI S.MICHAEL JERALD, DR DATE OF HEARING : 19-12-2019 DATE OF PRONOUNCEMENT : 20-12-2019 O R D E R PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-20, MUMBA I, DATED 13-08-2019 FOR THE AY.2009-10. 2. SHRI MARGAV SHUKLA, APPEARING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE SOLITARY GROUND RAISED IN THE APPEAL BY ASSESSEE IS AGAINST THE ADDITION CONFIRMED B Y THE CIT(A) IN RESPECT OF ALLEGED BOGUS PURCHASES BY THE A SSESSEE. THE LD.AR SUBMITTED THAT THE ASSESSEE IS ENGAGED IN EXEC UTION ITA NO. 5852/MUM/2019 : 2 : OF WORKS CONTRACT FOR INTERIOR WORKS AS PER THE SPECIF ICATION OF CLIENTS/ARCHITECTS. THE ASSESSMENT FOR AY.2009-10 WAS REOPENED ON THE GROUND THAT THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS AGGREGATING TO RS.1,13,86,164/- FROM HALAWALA DEALERS. THE ASSESSI NG OFFICER (AO) MADE ADDITION OF THE ENTIRE BOGUS PURCHAS ES AND THE CIT(A) UPHELD THE ORDER OF AO. THE LD.AR POINTED TH AT ASSESSEE HAS DECLARED GROSS PROFIT (GP) OF 17.64% DU RING THE IMPUGNED ASSESSMENT YEAR. SIMILAR ADDITION WAS MADE B Y THE AO IN SUBSEQUENT ASSESSMENT YEAR I.E., AY.2010-11 ON SAME SET OF FACTS. THE MATTER TRAVELLED TO THE TRIBUNAL. THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS ACCEPTED THE GP @16% DECLARED BY THE ASSESSEE IN AY.2010-11. THE LD.AR PR AYED FOR DELETING THE ADDITION IN LIGHT OF THE ORDER OF THE TRIBUN AL IN ASSESSEES OWN CASE IN ITA NOS.6889/MUM/2017 & 3076/MUM/2018 FOR THE AYS.2010-11 & 2011-12, DECIDED ON 27-12-2018. 3. PER CONTRA, SHRI S.MICHAEL JERALD, REPRESENTING TH E DEPARTMENT, VEHEMENTLY DEFENDED THE IMPUGNED ORDER. HOWEVER, THE LD.DR FAIRLY ADMITTED THAT THE FACTS IN THE ASSESSMENT YEAR UNDER APPEAL ARE SIMILAR TO FACTS IN AYS.2010-11 AND 2011-12. 4. BOTH SIDES HEARD. ORDERS OF AUTHORITIES BELOW PERU SED. THE AUTHORITIES BELOW HAVE MADE ADDITION IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES MADE BY THE ASSESSEE FROM HAWALA DEALERS. BOTH THE SIDES ARE UNA NIMOUS IN STATING THAT THE FACTS IN THE ASSESSMENT YEAR UNDER APPE AL ITA NO. 5852/MUM/2019 : 3 : ARE SIMILAR TO THE FACTS IN ASSESSEES OWN CASE FOR TH E AYS.2010-11 & 2011-12. THE CO-ORDINATE BENCH OF THE TRIBUNAL WHILE ADJUDICATING THE APPEALS OF ASSESSEE I N ITA NOS.6889/MUM/2017 & 3076/MUM/2018 FOR THE AYS.2010- 11 & 2011-12 RESPECTIVELY (SUPRA), HELD AS UNDER: 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE SALE S IN THIS CASE HAVE NOT BEEN DOUBTED. HENCE, HE PLEADED THAT ON TH E TOUCH STONE OF THE HON'BLE JURISDICTIONAL HIGH COURT DECISION IN T HE CASE OF NIKUNJ EXIMP ENTERPRISES (IN WRIT PETITION NO 2860, ORDER DT. 18.6.2014), NO DISALLOWANCE WAS TO BE DONE. HE FURTHER SUBMITTED T HAT DISALLOWANCE HAS BEEN DONE IN THIS CASE ON ACCOUNT OF PROFIT EARNED ON BOGUS PURCHASES @ 12.5%. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ALREADY DISCLOSED S UFFICIENT GROSS PROFIT OF 15.99% MORE THAN THE AMOUNT OF 12.5%. HEN CE, HE PLEADED THAT NO DISALLOWANCE IS NECESSARY. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) RELIED UPON THE ORDERS OF THE LD. CIT(A). 9. UPON CAREFUL CONSIDERATION, WE FIND THAT THE LD. CIT(A) IN THIS CASE HAS SUSTAINED 12.5% DISALLOWANCE ON ACCOUNT OF BOGU S PURCHASE. WE NOTE THAT SALES HAVE NOT BEEN DOUBTED. THE REVEN UE IS NOT IN APPEAL AGAINST THE ORDER OF THE LD. CIT(A). WE NOTE THAT THIS DISALLOWANCE IS DONE TO TAX THE PROFIT EARNED BY TH E ASSESSEE ON THE BOGUS PURCHASE. HENCE, IN OUR CONSIDERED OPINION, T HOUGH 12.5% DISALLOWANCE IS TO BE SUSTAINED, BUT THE GROSS PROF IT ALREADY DISCLOSED BY THE ASSESSEE, NEEDS TO BE REDUCED TO A VOID DOUBLE JEOPARDY TO THE ASSESSEE. DOUBLE JEOPARDY, IN OUR C ONSIDERED OPINION, IS NOT SUSTAINABLE IN LAW. ACCORDINGLY, WE HOLD THAT THE DISALLOWANCE IN THIS CASE SHOULD BE RESTRICTED TO 1 2.5% OF THE BOGUS PURCHASE AND THE GROSS PROFIT ALREADY DECLARED SHOU LD BE REDUCED THERE FROM. SINCE THE GROSS PROFIT DECLARED IS MORE THAN 12.5%, NO DISALLOWANCE IS FURTHER CALLED FOR. 5. SINCE THE FACTS IN ASSESSMENT YEAR IN APPEAL ARE SI MILAR TO THE FACTS IN AYS.2010-11 & 2011-12 ADJUDICATED BY THE CO-ORDINATE BENCH OF TRIBUNAL, RESPECTFULLY FOLLOWING THE ITA NO. 5852/MUM/2019 : 4 : ORDER OF TRIBUNAL IN ASSESSEES OWN CASE, THE IMPUGN ED ORDER IS SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 20 TH DAY OF DECEMBER, 2019 SD/- SD/- (MANOJ KUMAR AGGARWAL) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /MUMBAI; /DATED : 20-12-2019 TNMM / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #!' / THE RESPONDENT 3. $ % ( ) / THE CIT(A), MUMBAI 4. $ % / CIT, MUMBAI 5. ()* +, , $ .+, $/ , / DR, ITAT, MUMBAI 6. *012 / GUARD FILE $ / BY ORDER, # //TRUE COPY// / $ (DY./ASST. REGISTRAR) $ .+, $/, / ITAT, MUMBAI