ACIT - 19 (2), MUMBAI V. KANIZ FATIMA SAQQAI ABDI, MUMBAI

ITA 6059/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6264 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Bogus purchase
• Section: 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 6059 /MUM/ 201 8 (ASSESSMENT YEAR 20 1 0 - 11 ) ACIT - 19(2) 2 ND FLOOR MATRU MANDIR TARDEO ROAD MUMBAI - 400 007. V S . LATE MRS. KANIZ FATIMA SAQQAI ABDI 3 RD FLOOR, 304 CORNELIAM BUILDING, 104 AUGUST KRANTI MARG, MUMBAI - 36. PAN : AADPA6492R ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI PANKAJ KUMAR DATE OF HEARING 05.12.20 19 DATE OF PRONOUNCEMENT 6 . 0 2 . 20 20 O R D E R PER SHAMIM YAHYA (AM) : - THIS IS AN APPEAL BY THE REVENUE WHEREIN THE REVENUE IS AG G RIEVED THAT THE LEARNED CIT - A HAS DELETED THE ADDITION BY SUSTAINING ONLY 12.5% DISALLOW A NCE ON ACCOUNT OF BOGUS PURCHASES, VIDE ORDER DATED 21.6.2018 PERT AINING TO A . Y . 2010 - 11. 2. THE ASS ESSEE IN THIS CASE IS ENGAGED IN TO THE BUSINESS OF CIVIL AND PLUMBING WORKS. THE ASSESSMENT WAS REOPENED UP ON INFOR MAT I ON FROM SALES TAX DEPARTMENT THAT ASSESSEE HAS MADE PURCHASES FROM BOGUS DEALERS. THE ASSESSING OFFIC ER IN THIS CASE HAS MADE HUNDRED PERCENT ADDITION ON ACCOUNT OF BOGUS PURCHASE AMOUNTING TO RS. 9,20,322/ - . 3. UPON ASSESSEE'S APPEAL LEARNED CIT - A HAS NOTED THAT THE SALES HAS NOT BEEN DOUBTED. ACCORDINGLY PLACING RELIANCE UPON SEVERAL CASE LAWS AND UP ON THE FACTS OF THE CASE HE SUSTAINED 12.5 % DISALLOWANCE OUT OF THE BOGUS PURCHASES . LATE MRS. KANIZ FATIMA SAQQAI ABDI 2 4. AGAINST ABOVE ORDER REVENUE IS IN APPEAL BEFORE THE I TAT. WE HAVE HEARD BOTH THE COUNS EL AND PERUSED THE RECORDS . W E FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DO UBTED IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED, HUNDRED PERCENT DISALLOWANCE FOR BOGUS PURCHASE CANNOT BE DONE. THE RATIONALE BEING NO SALES IS POSSIBLE WITHOUT ACTUAL PURCHASES. THIS PROPOSITION IS SUPPORTED FROM HONOURABLE JURISDICTIONAL HIGH CO URT DECISION IN THE CASE OF NIKUNJ EXIMP E NTERPRISES (IN WRIT PETITION NO 2860, ORDER DT . 18.6.2014). IN THIS CASE THE HONOURABLE HIGH COURT HAS UPHELD HUNDRED PERCENT ALLOWANCE FOR THE PURCHASES SAID TO BE BOGUS WHEN SALES ARE NOT DOUBTED. HOWEVER THE FAC TS OF THE PRESENT CASE INDICATE THAT ASSESSEE HAS MADE PURCHASE FROM THE GREY MARKET. MAKING PURCHASES THROUGH THE GREY MARKET GIVES THE ASSESSEE SAVINGS ON ACCOUNT OF NON - PAYMENT OF TAX AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SUCH SITUATION IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE 12.5 % DISALLOWANCE OUT OF THE BOGUS PURCHASES DONE BY THE LEARNED CIT - A MEETS THE END OF JUSTICE. ACCORDINGLY WE UPHOLD THE ORDER OF LEARNED CIT - A. 5. THE DECISION OF N K P ROTEINS LTD. (25 0 ITR 22) REFERRED BY REVENUE IN GROUNDS OF APPEAL HAS ALREADY BEEN DISTINGUISHED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF M . HAJI ADAM& C O . ( ITA NO 1004 OF 20016 DT . 11/2/2019 ). 6. IN THE RESULT THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED . OR DER HAS BE EN PRONOUNCED IN THE COURT ON 6 . 2 . 20 20 . SD/ - SD/ - ( RAMLAL NEGI ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 6 / 0 2 / 20 20 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI LATE MRS. KANIZ FATIMA SAQQAI ABDI 3 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI