ITO 17(2)(5), Mumbai V. M/S N Y J V INNOVATIVES, Mumbai

ITA 606/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7531 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 606/MUM/2019 (ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER - 17(2)(5) ROOM NO. 123A, 1ST FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 VS. M/S. NYJV INNOVATIVES 84-F, 1ST FLOOR, MOHD ALI ROAD MASJID BUNDER (W) MUMBAI 400003 PAN AAGFN0961P APPELLANT RESPONDENT APPELLANT BY: SHRI ANOOP HIWASE RESPONDENT BY: NONE DATE OF HEARING: 29.01.2020 DATE OF PRONOUNCEMENT: 30.01.2020 O R D E R PER R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)- 58, MUMBAI FOR A.Y. 2009-10, IN THE MATTER OF ORDER PASSED UNDER SECTIONS 143(3)/147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER 'THE ACT'). 2. THE GRIEVANCE OF THE REVENUE RELATES TO RESTRICTION OF ADDITION IN RESPECT OF BOGUS PURCHASES TO THE EXTENT OF 12.5%. 3. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE AO HAS REOPENED THE ASSESSMENT BY OBSERVIN G THAT THE ASSESSEE HAS TAKEN PURCHASE BILLS WITHOUT DELIVERY OF GOODS WHICH AMOUNTS TO BOGUS PURCHASES. AFTER CONSIDERING THE PROFIT ELEME NT, THE AO MADE ADDITION TO THE EXTENT OF 15.6% ON ALLEGED BOGUS PU RCHASES. BY THE IMPUGNED ORDER THE CIT(A) RESTRICTED THE ADDITION T O THE EXTENT OF 12.5% AFTER OBSERVING AS UNDER: - 10. ALL ASPECTS IN RECORD IS DULY CONSIDERED. THE GROSS PROFIT RATE OF ASSESSEE IS 28.49%. THE DISPUTED TRANSACTION IS RES ELLING OF SANITARY WARE AND FITTINGS. THE ASSESSING OFFICER DISALLOWED 25.6% (2 YEAR ITA NO. 606/MUM/2019 M/S. NYJV INNOVATIVES 2 AVERAGE) OF THE ALLEGED AMOUNT OF ACCOMMODATION ENT RIES. ON FACTS AND CIRCUMSTANCES OF THE CASE, AND CONSIDERING THE STRENGTH OF EVIDENCE BROUGHT TO RECORD (I NOTE THAT ASSESSING O FFICER HAS NOT ISSUED ANY NOTICE TO THE ALLEGED ACCOMMODATION ENTR Y PROVIDERS) DECISION IS TO TAKEN IN A BALANCED MANNER. I, AFTER CONSIDERING ALL ASPECTS, HOLD THAT DISALLOWANCE BE KEPT AT 12.5% OF TRANSACTIONS COVERED BY ACCOMMODATION ENTRIES. THE ASSESSING OFF ICER IS DIRECTED TO MODIFY ASSESSMENT ACCORDINGLY. 4. IT IS CLEAR THAT AFTER CONSIDERING THE FINDINGS RE CORDED BY THE AO AND THE DOCUMENTS SUBMITTED BY THE ASSESSEE, THE CIT(A) HAS VERY REASONABLY RESTRICTED THE ADDITION TO THE EXTENT OF 12.5%. NOT HING WAS BROUGHT BEFORE ME BY THE LEARNED D.R. SO AS TO CONTROVERT THE DETA ILED FINDING RECORDED BY THE CIT(A) AT PARA 6 TO 10 OF THE APPELLATE ORDER. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON30TH JANUARY, 2020. SD/ - (R.C. SHARMA) ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH JANUARY, 2020 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -58, MUMBAI 4. THE PR.CIT - 17, MUMBAI 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.