VISHAL RAVINDRA MUKANE, MUMBAI V. ITO WD 5, PALGHAR

ITA 6354/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0583 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Assessee Lawyers: VIRAG M SHAH
• Keywords: Bogus purchase; Non passing of speaking order

Judgement Text

1 VISHAL RAVINDRA MUKANE IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) ITA NO.6354 /MUM /2016 (ASSESSMENT YEAR 2011-12 ) SHRI VISHAL RAVINDRA MUKANE M/S RAMAN S SHAH & ASSOCIATES, 102, INDER DARSHAN CHSAL, NEXT TO JAIN TEMPLE, JAMBLI GULLY, BORIVALI (W), MUMBAI-92 PAN : AKHPM8454D VS ITO, WD.5, PALGHAR APPELLANT RESPONDENT APPELLANT BY SHRI VIRAG M SHAH RESPONDENT BY SHRI B SATYANARAYANA RAJU DATE OF HEARING 15-05-2017 DATE OF PRONOUNCEMENT 06-2017 O R D E R THIS IS AN APPEAL BY THE ASSESSEE WHEREIN THE ASSE SSEE IS AGRIEVED BY THE ORDER OF THE LEARNED CIT-A WHERE IN 28.21 PERCENT DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASE HAS BEEN SUSTAINED. 2. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECOR DS. I FIND THAT IN THIS CASE THE SALES HAVE NOT BEEN DOUBTED. IT IS SETTLED LAW THAT WHEN SALES ARE NOT DOUBTED HUNDRED PERCENT DISALLOW ANCE FOR BOGUS PURCHASE CANNOT BE DONE. THIS PROPOSITION IS SUPPOR TED FROM HONOURABLE JURISDICTIONAL HIGH COURT DECISION IN TH E CASE OF NIKUNJ EXIMP ENTERPRISES. HOWEVER THE FACTS OF THE PRESENT CASE INDICATE THAT ASSESSEE HAS MADE PURCHASE FROM THE GREY MARKET. MA KING PURCHASE 2 VISHAL RAVINDRA MUKANE THROUGH THE GREY MARKET GIVES THE ASSEESSEE SAVINGS ON ACCOUNT OF NON PAYMENT OF TAX AND OTHERS AT THE EXPENSE OF THE EXC HEQUER. IN SIMILAR SITUATION ON THE FACTS AND CIRCUMSTANCES OF THE CAS E A DISALLOWANCE OF 12.5% OF THE BOGUS PURCHASE HAS BEEN CONSIDERED TO MEET THE END OF JUSTICE IN A NUMBER OF CASES AT THE MUMBAI TRIBUNAL . ACCORDINGLY I HOLD THAT THE DISALLOWANCE IN THIS CASE SHOULD BE RESTRI CTED TO 12.5% OF THE BOGUS PURCHASE. LEARNED COUNSEL OF THE ASSESSEE HAS FAIRLY AGREED TO THIS PROPOSITION. 3. LEARNED DEPARTMENTAL REPRESENTATIVE HAS PLACED RELI ANCE UPON A HONOURABLE GUJARAT HIGH COURT DECISION WHEREIN HUND RED PERCENT DISALLOWANCE OF BOGUS PURCHASE HAS BEEN UPHELD. SPE CIAL LEAVE PETITION AGAINST THIS ORDER HAS BEEN DISMISSED BY THE HONOUR ABLE APEX COURT. I FIND THAT DISMISSAL OF SLP BY A NON SPEAKING ORDER BY THE HONOURABLE APEX COURT DOESN'T MERGE THE ORDER OF THE HONOURABL E HIGH COURT WITH THAT OF THE APEX COURT. MOREOVER SUCH DISALLOW ANCES DEPEND UPON THE FACTS AND CIRCUMSTANCES OF THE CASE AS EXPOUNDE D BY HONOURABLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKUNJ EXI MP ENTERPRISES. ACCORDINGLY I DIRECT THAT THE DISALLOWANCE BE RESTR ICTED IN THIS CASE TO 12.5% OF THE BOGUS PURCHASE. 4. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE ST ANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06-06-2017. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DT : 06 TH JUNE, 2017 3 VISHAL RAVINDRA MUKANE COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI