Income-tax Officer, V. Smt. Zahira R. Khatun, Raigad

ITA 646/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5853 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-11-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 11-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARISE OUT OF COMMON PASSED
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NOS.645 & 646/PUN/2016 / ASSESSMENT YEAR S: 2009-10 & 2010-11 ITO, WARD-3, PANVEL VS. SMT. ZAHIRA R. KHATUN, 861/1, KHAN CHAWL, URAN, RAIGAD 400 702 PAN : AOCPK2114B (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THESE TWO APPEALS FILED BY THE REVENUE ARISE OUT OF THE COMMON ORDER PASSED BY THE CIT(A)-2, THANE ON 28-01- 2016 IN RELATION TO THE ASSESSMENT YEARS 2009-10 & 2010-11. SINCE BOTH THE APPEALS ARE BASED ON IDENTICAL FACTS AND SIMILAR GROUNDS , WE ARE, THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CON SOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED, THE FACTS OF THE CASE FOR THE A.Y. 2009- 10, ARE THAT THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES TAX APPELLANT BY SHRI PANKAJ GARG RESPONDENT BY SHRI SUHAS BORA DATE OF HEARING 31-01-2019 DATE OF PRONOUNCEMENT 31-01-2019 ITA NOS.645 & 646 /PUN/2016 SMT. ZAHIRA R. KHATUN 2 DEPARTMENT, MAHARASHTRA GIVING NAMES AND ADDRESSES AND OTHER DETAILS OF CERTAIN PERSONS WHO HAD PROVIDED ENTRIES FOR BOG US PURCHASE BILLS TO LARGE NUMBER OF TAXPAYERS. SUCH DETAILS ALSO INCLUDED THE NAME OF THE ASSESSEE ALONG WITH THE AMOUNT OF BOGUS BILLS. FOR THE YEAR UNDER CONSIDERATION, TOTAL OF SUCH BILLS AMOUNTED TO RS.96,52,276/-. AFTER INITIATION OF RE-ASSESSM ENT PROCEEDINGS, THE AO ADDED THIS SUM TO THE TOTAL INCOME DECLARE D BY THE ASSESSEE. 3. SIMILAR IS THE POSITION FOR THE A.Y. 2010-11. THE AO GOT INFORMATION ABOUT THE ASSESSEE HAVING RECEIVED ENTRIES FOR BOGUS PURCHASES DURING THIS YEAR TO THE TUNE OF RS.1,08,22,734/ -. IN THE ASSESSMENT COMPLETED U/S.143(3) R.W.S.147, THE AO MADE ADDITION FOR SAID BOGUS PURCHASE BILLS. 4. THE LD. CIT(A) REDUCED THE DISALLOWANCE FROM 100% TO 12.5% FOR BOTH THE YEARS. THE REVENUE IS AGGRIEVED BY REDUCTION IN THE ADDITIONS MADE BY THE AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH TH E RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT CASES OF SEV ERAL ASSESSEES WHO HAD OBTAINED BOGUS PURCHASES FROM SUCH PERSONS HAVE COME UP FOR CONSIDERATION BEFORE THE PUNE BENCHES O F THE ITA NOS.645 & 646 /PUN/2016 SMT. ZAHIRA R. KHATUN 3 TRIBUNAL. VIDE THE LEAD ORDER IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. AND OTHERS VS. DCIT DATED 28-04-2017 IN ITA NO.795/PUN/2014 AND OTHERS, THE TRIBUNAL HAS MADE CERTAIN CATEGORIES. CATEGORY NO. IV OF THE SAID ORDER, WHICH IS GERMANE TO THE INSTANT APPEAL, PROVIDES AS UNDER : IV. THE NEXT INSTANCE IS THE CASE OF GOODS WHICH HA VE BEEN ADMITTEDLY SOLD BY THE HAWALA DEALER AND HAS BEEN RECEIVED BY THE ASSESSEE, WHO IN TURN HAD MAINTAINED QUANTITATIVE DETAI LS AND ALSO EVIDENCE OF ITS MOVEMENT I.E. TRANSPORTATION DETAILS A ND QUALITY CONTROL DETAILS OF CONSUMPTION OF THE SAID MATERIAL OR EXACT DETAILS OF SALE OF THE SAME CONSIGNMENT THROUGH SAME TRANSPOR TER DIRECTLY TO THE PARTY, THEN THE TOTAL PURCHASES CANNOT BE ADDED IN THE HANDS OF ASSESSEE. HOWEVER, SINCE THE PURCHASES ARE MADE F ROM THE GREY MARKET, SOME ESTIMATION NEEDS TO BE MADE IN THE HANDS OF ASSESSEE. THE TRIBUNAL IN M/S. CHETAN ENTERPRISES VS. A CIT (SUPRA) HAS ALREADY HELD THAT THE ADDITION BE MADE BY ES TIMATING THE SAME @ 10% OF THE ALLEGED HAWALA PURCHASES, OVER A ND ABOVE THE GP SHOWN BY THE RESPECTIVE ASSESSEE. 6. GOING BY THE RATIO LAID DOWN IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. AND OTHERS (SUPRA), WHICH HAS BEEN F OLLOWED IN ENUMERABLE NUMBER OF CASES, WE HOLD THAT THE ADDITION SHOULD HAVE BEEN SUSTAINED @10% OF ALLEGED HAWALA PURCHASES OVER AND OVER THE NORMAL GP RATE SHOWN BY THE ASSESSEE. THE LD. AR SU BMITTED THAT THE NORMAL GP RATE IN THIS CASE IS LITTLE MORE THAN 3%. WE S ET- ASIDE THE IMPUGNED ORDER AND DIRECT THE AO TO FIND OUT THE NORMAL GP RATE FOR BOTH THE YEARS UNDER CONSIDERATION AND MAKE ADDITION @10% PLUS SUCH DETERMINED GP RATE FOR THE YEARS IN RESPE CT OF ITA NOS.645 & 646 /PUN/2016 SMT. ZAHIRA R. KHATUN 4 SUCH BOGUS PURCHASE BILLS. NEEDLESS TO SAY, THE AO SHALL G IVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, THE APPEALS OF THE REVENUE ARE PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2019. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VI CE PRESIDENT PUNE; DATED : 31 ST JANUARY, 2019 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-2, THANE 4. 5. THE PR.CIT-2, THANE , , / DR B, ITAT, PUNE; 6. / GUARD FILE. / TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE ITA NOS.645 & 646 /PUN/2016 SMT. ZAHIRA R. KHATUN 5 DATE 1. DRAFT DICTATED ON 31-01-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 31-01-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *