ITO WARD 2 (3), THANE V. SHRI. CHANDRAKANT P JADHAV, MIRA ROAD

ITA 6487/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0347 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6487 //20 19 (. . 2009-10 ) ITA NO.6487/MUM/2019 (A.Y.2009-10) ITO-2(3), 6 TH FLOOR, B-WING, ROOM NO.13, ASHAR I.T. PARK, ROAD NO. 16Z, NR. AMBIKA NAGAR, WAGLE INDUSTRIAL ESTATE, THANE (W)-400604. ...... ' / APPELLANT VS. SHRI CHANDRAKANT P. JADHAV A/2, 2, SWAMI SAMARTH CHAWI, NIRABHDEV MANDIR ROAD, PENKAR PADA, MIRA ROAD (E), THANE-401107 PAN: AHBPJ1818R . .... (*/ RESPONDENT ' +/ APPELLANT BY : MS. SMITA VERMA (* +/ RESPONDENT BY : NONE , / DATE OF HEARING : 06/05/2021 , / DATE OF PRONOUNCEMENT : 12/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE [HERE INAFTER REFERRED TO AS THE CIT(A)] DATED 15.07.2019 FOR THE ASSESSMENT Y EAR (AY) 2009-10. 2 . 6487 //20 19 (. .2009-10 ) ITA NO.6487/MUM/2019 (A.Y.2009-10) 2. THE ASSESSMENT FOR ASSESSMENT YEAR (AY) 2009-10 IN THE CASE OF ASSESSEE WAS RE-OPENED ON THE GROUND THAT THE ASSES SEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS FROM SUSPICIOUS DEAL ERS. THE ASSESSING OFFICER (AO) DURING THE COURSE OF ASSESSMENT PROCEEDINGS HE LD THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS. 7,66 ,544/- FROM THREE DEALERS I.E. 1. MODERN TRADERS RS. 3,19,617/- 2. DHARMESH TRADING COMPANY RS. 2,00,000/- 3. KLUDEE SALES RS. 2,46,927/- TOTAL RS. 7,66,544/- SINCE, THE ASSESSEE FAILED TO PROVE GENUINENESS OF AFORESAID DEALERS AND THE PURCHASES MADE FROM THEM, THE AO MADE ADDITION OF ENTIRE BOGUS PURCHASES. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE CIT(A). THE CIT(A) RESTRICTED THE ADDITION TO RS. 95,818/- BY E STIMATING PROFIT MARGIN ON BOGUS PURCHASES TO 12.5%. HENCE, THE PRESENT APPEAL BY THE REVENUE. 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT DURING ASSESSMENT PROCEEDINGS, NOTICES WERE SENT TO THE SU SPICIOUS DEALERS FROM WHOM THE ASSESSEE HAD MADE PURCHASES. THE VENDORS F AILED TO RESPOND TO THE NOTICES. NO DOCUMENT WAS FURNISHED BY THE ASSESSEE TO PROVE TRAIL OF GOODS, HENCE, THE AO MADE ADDITION OF ENTIRE BOGUS PURCHAS ES. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF N.K. PROTEINS LTD. V/S DCIT [84 TAXMANN.COM 195] TO CONTEND THAT ENTIRE BOGUS PURCHASES SHOULD BE DISAL LOWED. 3 . 6487 //20 19 (. .2009-10 ) ITA NO.6487/MUM/2019 (A.Y.2009-10) 4. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISC HARGE HIS ONUS IN PROVING AUTHENTICITY OF THE DEALERS AND PURCHASES MADE FROM THEM DURING THE PERIOD RELEVANT TO AY UNDER APPEAL. AT THE SAME TIME, IT I S OBSERVED THAT THE AO ACCEPTED SALES TURNOVER DECLARED BY THE ASSESSEE. W ITHOUT PURCHASES THERE CANNOT BE SALES, THEREFORE, IT IS ONLY THE PROFIT E LEMENT EMBEDDED IN SUCH TRANSACTIONS THAT CAN BE BROUGHT TO TAX. THE AO HAS ERRED IN DISALLOWING ENTIRE ALLEGED BOGUS PURCHASES. THE CIT(A) HAS ESTIMATED P ROFIT MARGIN OF 12.5% ON BOGUS PURCHASES. I FIND NO INFIRMITY IN THE IMPUGNE D ORDER, HENCE, THE SAME IS UPHELD AND APPEAL BY THE REVENUE IS DISMISSED, BEIN G DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY , THE 12 TH DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 1/ DATED: 12/07/2021 SK, PS ( 2 ( 2 ( 2 ( 2 COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. (* / THE RESPONDENT. 3. 3 ( )/ THE CIT(A)- 4. 3 CIT 5. ( , . . . , / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI