SANDEEP RANJEET SANGHVI, MUMBAI V. ITO 14(1)(4), MUMBAI

ITA 6449/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4547 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 14-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Bogus purchase
• Section: 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BE NCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER / I .TA NO. 6449/MUM/2012 ( / ASSESSMENT YEAR: 2009-10 SANDEEP RANJEET SANGHVI, 114, AMAR NIWAS, 2 ND FLOOR, BHULESHWAR ROAD, MUMBAI-400 02 / VS. THE ITO, EARNEST HOUSE, 2 ND FLOOR, NCPA MARG, MUMBAI-400 021 ./ ./ PAN/GIR NO. AAEPS 2445P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI VIPUL JOSHI / RESPONDENT BY: SHRI LOVE KUMAR / DATE OF HEARING :12.01.2016 !' / DATE OF PRONOUNCEMENT :12.01.2016 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-25, MUMBAI DATED 1.8.2012 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE RELATES T O THE ADDITION OF RS. 25,00,000/- MADE BY THE AO AS UNEXPLAINED INVES TMENT U/S. 69 OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E RETURN FOR THE YEAR WAS FILED ON 11.9.2009 DECLARING TOTAL INCOME AT 2,84,310/-. THE ITA. NO. 6449/M/2012 2 ASSESSEE IS A PROPRIETOR OF M/S. SAN GOLD ENGAGED I N THE BUSINESS OF TRADING AND MANUFACTURING OF SILVER AND IMITATION JEWELLERY ON SEMI WHOLESALE AND RETAIL BASIS. THE MAIN ITEMS INVOLVE D ARE BANGLES OF VARIOUS SIZES AND VARIETIES OF SMALL VALUES. 3.1. WHILE SCRUTINIZING THE RETURN OF INCOME AND GO ING THROUGH THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THE AO NOTICED T HAT THE ASSESSEE HAS MADE PURCHASES FROM ONE M/S. SUNSHINE GOLD. THE AO PROCEEDED BY MAKING DIRECT ENQUIRIES FROM M/S. SUNSHINE GOLD. M/S. SUNSHINE GOLD WAS ASKED TO PRODUCE ALL THE SALES BILLS OF T HE SALES MADE TO M/S. SAN GOLD. THE AO ALSO VERIFIED THE PURCHASE B ILLS OF M/S. SUNSHINE GOLD AND ON SUCH VERIFICATION, THE AO FOUN D THAT THE PURCHASES MADE BY M/S. SUNSHINE GOLD APPEARS TO BE ON BOGUS BILLS. SINCE THE SAID PURCHASES WERE SOLD TO THE ASSESSEE, THE AO MADE AN ADDITION OF RS. 25 LAKHS TO THE INCOME OF THE ASSES SEE. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, AT THE VERY OUTSET, THE LD. COUNSEL F OR THE ASSESSEE STATED THAT HOW THE AO CAN JUSTIFY THE IMPUGNED ADD ITIONS IN THE HANDS OF THE ASSESSEE ON THE FINDING THAT PURCHASES MADE BY M/S. SUNSHINE GOLD APPEAR TO BE BOGUS. IT IS THE SAY O F THE LD. COUNSEL THAT ANY ADDITION IF WARRANTED SHOULD BE MADE IN T HE HANDS OF M/S. SUNSHINE GOLD AND NOT IN THE HANDS OF THE ASSESSEE. THE LD. COUNSEL CONTINUED BY STATING THAT THE SALES MADE BY THE ASS ESSEE HAVE BEEN ACCEPTED THEREFORE THE ADDITION MADE BY THE REVENUE AUTHORITIES DESERVES TO BE DELETED. ITA. NO. 6449/M/2012 3 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE AO. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE IM PUGNED ADDITION MADE BY THE AO AND CONFIRMED BY THE FIRST APPELLATE AUTHORITY. IT IS INDEED PATHETIC TO FIND THAT THE AO HAD MADE THE AD DITION IN THE HANDS OF THE ASSESSEE MERELY BECAUSE THE SELLER OF GOODS TO THE ASSESSEE I.E. SUNSHINE GOLD IS FOUND TO HAVE PURCHA SED FROM 11 PARTIES WHICH APPEARED TO BE BOGUS PURCHASES. IT I S EQUALLY PATHETIC TO FIND THAT NO ADDITIONS HAVE BEEN MADE IN THE HA NDS OF M/S. SUNSHINE GOLD ON ACCOUNT OF ALLEGED BOGUS PURCHASES . IF M/S. SUNSHINE GOLD HAS NOT MADE ANY SALES TO THE ASSESS EE, THEN HOW THE ASSESSEE COULD SELL THE SAME GOODS TO HIS CUSTOMERS AND CREDIT THE AMOUNT TO HIS SALES ACCOUNT, AS MENTIONED ELSEWHERE , THE SALES OF THE ASSESSEE HAS NOT BEEN DISTURBED. 7.1. IT WOULD NOT BE OUT OF PLACE TO REFER TO THE F OLLOWING OBSERVATIONS MADE BY THE AO IN HIS ASSESSMENT ORDER : FURTHER SUMMONS WAS ALSO ISSUED TO M/S. SUNSHINE GOLD TO PRODUCE ALL THE SALES BILLS OF THE SALES MADE TO M/S. SAN GOLD. ON VERIFICATION OF THE PURCHASE BILLS OF M/S. SUNSH INE GOLD PERTAINING TO THE SALES MADE TO M/S. SAN GOLD IT WA S OBSERVED THAT THE TOTAL BILLS AMOUNTING TO RS. 25 LACS WERE IN ONE HAND WRITING, THOUGH BELONGING TO VARIOUS COMPANIES. AS SUCH, IN VIEW OF THE ABOVE FACTS, AS ALSO AS WELL AS ON ACCOUNT O F THE FACT THAT THERE IS A DRASTIC FALL IN THE G.P. OF THE ASSESSEE IN THE YEAR. I TREAT THE PURCHASES MADE BY M/S. SAN GOLD FROM M/S. SUNSHINE GOLD AS BOGUS AND TREAT THE SAME AS UNEXPLAINED INV ESTMENT U/S. 69 OF THE I.T. ACT. ITA. NO. 6449/M/2012 4 7.2. THE AFORESTATED FINDING OF THE AO SPEAKS FOR I TSELF. IT APPEARS THAT THE AO HAS NOT GIVEN ANY THOUGHTFUL CONSIDERAT ION TO THE PROVISIONS OF SEC. 69 OF THE ACT AND THE ADDITIONS HAVE BEEN MADE IN A MECHANICAL MANNER ON THE BASIS OF CRYPTIC FINDING M ENTIONED HEREINABOVE. WE, DIRECT THE AO TO DELETE THE IMPUG NED ADDITION OF RS. 25 LAKHS. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 12 TH JANUARY, 2016. SD/- SD/- (C.N. PRASAD) (N.K. BILLAIYA) %&# /JUDICIAL MEMBER # / ACCOUNTANT MEMBER MUMBAI; )# DATED : 12 TH JANUARY, 2016 . & . ./ RJ , SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. +,-&&./ , ./' , / DR, ITAT, MUMBAI 6. -012 / GUARD FILE. / BY ORDER, +& //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI