ASSISTANT COMMISSIONER OF INCOME TAX 19(3), MUMBAI V. RAJENDRA MADHANI, MUMBAI

ITA 5864/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7672 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKASH KR AGARWAL
• Keywords: Bogus purchase; Rejection of books of accounts
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH , MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER . / ITA NO. 5864 /MUM/201 7 ( / ASSESSMENT YEAR : 20 09 - 20 1 0 ) ACIT - 19(3), MUMBAI VS. RAJENDRA MADHANI, ROOM NO.3, 2 ND FLOOR, 477 - 479 MAULANI AZAD RD GOLE DEVAL, MUMBAI ./ PAN NO. : A A BPM 2019 A ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI VIKASH K R. AGARWAL , DR /AS SESSEE BY : NONE / DATE OF HEARING : 02 / 01 /201 9 / DATE OF PRONOUNCEMENT 09 / 01 /201 9 / O R D E R PER SHRI RAJESH KUMAR , A M : THIS APPEAL BY REVENUE ARISES OUT OF THE ORDER OF THE CIT(A) 30 , MUMBAI, DATED 13.06.2017 , WHICH IN TURN HAS ARISEN OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) RELATING TO A.Y. 20 09 - 2010 . 2. THE ONLY ISSUE R AISED BY THE REVENUE IN THE PRESENT APPEAL IS AGAINST THE DIRECTION OF CIT(A) TO THE AO TO RESTRICT THE ESTIMATION OF THE PROFIT AT 15% AS AGAINST 100% DISALLOWANCE MADE BY THE AO AND FURTHER THAT THE CIT(A) HAS NOT TAKEN INTO ACCOUNT THE REJECTION OF BO OKS OF ACCOUNTS BY THE AO U/S.145(3) OF THE ACT. 3. AT THE OUTSET, WE WOULD LIKE TO MENTION THAT NEITHER THE AR OF THE ASSESSEE NOR THE ASSESSEE HIMSELF APPEARED WHEN THE CASE WAS CALLED ITA NO . 5864 / 1 7 2 FOR HEARING TODAY, THEREFORE, WE ARE PROCEED ING TO DISPOSE OF THE AP PEAL AFTER HEARING THE LD.DR AND CONSIDERING THE MERITS OF THE CASE. 4. FA CTS IN BRIEF ARE THAT THE AO RECEIVED INFORMATION FROM DGIT(INV.), MUMBAI THAT THE ASSESSEE IS INVOLVED IN TAKING BOGUS PURCHASES/HAWALA TRANSACTION S FROM 11 PARTIES TO THE TUNE OF R S. 75,36,859/ - . THE DETAILS OF WHICH WERE GIVEN IN PARA 2 OF THE ASSESSMENT ORDER. ACCORDINGLY, ASSESSEES CASE WAS REOPENED U/S.147 OF THE ACT AND NOTICE U/S.148 OF THE ACT WAS ISSUED ON 13.03.2014. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSU ED NOTICE U/S.133(6) OF THE ACT TO THE SAID PARTIES WHICH WERE RETURNED UNSERVED. BESIDES, THE INSPECTOR VIDE HIS REPORT DATED 11.02.2015 SUBMITTED BEFORE THE AO THAT THE SAID PARTIES WERE NOT EXISTING AT THE GIVEN ADDRESS ES . FINALLY, THE SHOW CAUSE NOTIC E WAS ISSUED ON 10.03.2014 CALLING UPON THE ASSESSEE TO FURNISH STOCK REGISTER, SALES AND PURCHASE BILLS, ETC., WHICH WAS REPLIED BY THE ASSESSEE ON 18.02.2015. THE AO BEING NOT SATISFIED WITH THE REPLY OF THE ASSESSEE REJECTED THE BOOKS OF ACCOUNTS AND AF TER REJECTING THE BOOKS OF ACCOUNTS U/S.145(3) OF THE ACT, ADDED THE ENTIRE AMOUNT OF RS. 75,36,859 / - TO THE INCOME OF THE ASSESSEE BY FRAMING THE ASSESSMENT U/S.145(3) R.W.S.147 OF THE ACT DATED 23.03.2015 . 5 . IN THE APPELLATE PROCEEDINGS, LD. CIT(A) PARTL Y ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING THE AO TO MAKE ADDITION @15% OF SUCH BOGUS PURCHASES AFTER CONSIDERING THE REPLY OF THE ASSESSEE AND VARIOUS JUDICIAL DECISIONS RELIED ON BY THE ASSESSEE. ITA NO . 5864 / 1 7 3 6 . AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE ASSESSEE HAS UNDOUBTEDLY RESORTED TO AVAILING THE BOGUS PURCHASE ENTR IES AND PRODUCED ONLY THE BILLS AND VOUCHERS, PAYMENTS DETAILS BEFORE THE AO WHEREAS NOTICE ISSUED U/S.133(6) OF THE ACT WERE RETURNED UNSE RVED AND FINALLY THE ENTIRE ALLEGED PURCHASE S W ERE ADDED TO THE INCOME OF THE ASSESSEE. IN APPEAL, LD. CIT(A) DELETED THE ADDITION TO THE EXTENT OF 85% BY HOLDING THAT IT IS ONLY INCOME WHICH COULD BE BROUGHT TO TAX AND NOT THE ENTIRE PURCHASES WHICH APP EARS TO BE REASONABLE. IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO UPHOLD THE ORDER OF CIT(A) WHICH IS REASONABLE AND APPEARS TO BE CORRECT AND ACCORDINGLY, WE CONFIRM THE FINDINGS OF CIT(A) IN THIS REGARD AND DISMISS THE APPEAL OF REVENUE. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 09 / 01 /201 9 . SD/ - ( RAM LAL NEGI ) SD/ - (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 09 / 01 /201 9 . . / PRAKASH KUMAR MISHRA , S R.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSISTANT 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//