KAILASH M JOGANI., MUMBAI V. INCOME TAX WARD-18(2)(1), MUMBAI

ITA 6623/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9733 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA LD
• Assessee Lawyers: S P MITHANILD
• Keywords: Bogus purchase; Rule of consistency; Reassessment proceedings
• Section: 133(6); 147; 148

Judgement Text

ITA NO.6623/MUM/2017 KAILASH M.JOGANI ASSESSMENT YEAR: 2010-11 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.6623/MUM/2017 ( / ASSESSMENT YEAR: 2010-11) KAILASH M. JOGANI 23, PAVWALA BUILDING RAJARAM MOHAN ROY ROAD MUMBAI-400 002 / VS. INCOME TAX OFFICER WARD - 18(2)(1) 3 RD FLOOR, EARNEST HOUSE MUMBAI-400 021 ./ ./ PAN/GIR NO. AACPJ-9556-E ( ! /APPELLANT ) : ( ' ! / RESPONDENT ) REVENUE BY : N.HEMALATHA, LD. DR ASSESSEE BY : S.P.MITHANI,LD.AR / DATE OF HEARING : 22/03/2018 / DATE OF PRONOUNCEMENT : 22/03/2018 /ORDER PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2010-11 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-29 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-29/IT-422/ITO-18(2)(1)/15-16 DATED 2 ITA NO.6623/MUM/2017 KAILASH M.JOGANI ASSESSMENT YEAR: 2010-11 16/08/2017 QUA CONFIRMATION OF CERTAIN ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES . THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER WARD-18(2)(1), MUMBAI [AO] U/S 1 43(3) READ WITH SECTION 147 OF THE INCOME-TAX ACT,1961 ON 26/02/2016 WHERE THE INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT RS.6.90 LACS AS AGAINST RETURNED INCOME OF RS.3.05 LACS FILED BY THE ASSESSEE ON 15/ 10/2010. THE ESTIMATED ADDITIONS @ 12.5% AMOUNTING TO RS.3,84,54 8/- IS THE SOLE SUBJECT MATTER OF THIS APPEAL. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSE E BEING RESIDENT INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING OF COMPUTER SYSTEMS AND PARTS UNDER PROPRIETORSHIP CONCERN NAMELY APPNET SOLUTIONS WAS SUBJECTED TO REASSESSMENT PROCEEDINGS FOR IMPUGNED AY. THE RE ASSESSMENT PROCEEDINGS WERE INITIATED PURSUANT TO RECEIPT OF C ERTAIN INFORMATION FROM SALES TAX DEPARTMENT AND DGIT (INVESTIGATION) REGARDING DEALERS INDULGING IN BOGUS PURCHASE BILLS WITHOUT DOING ANY ACTUAL BUSINESS AN D IT WAS NOTED THAT THE ASSESSEE STOOD BENEFICIARY OF SUCH BOGUS P URCHASE BILLS TO THE TUNE OF RS.30.76 LACS FROM FOUR SUCH PARTIES. CONSEQUENT LY STATUTORY NOTICE U/S 148 DATED 02/04/2014 WAS ISSUED TO THE ASSESSEE WHI CH WAS FOLLOWED BY NOTICES U/S 143(2) AND 142(1). 2.2 THE ASSESSEE JUSTIFIED THE PURCHASES. HOWEVER, NOTICES U/S 133(6) ISSUED BY LD. AO TO CONFIRM THE TRANSACTIONS ELICIT ED NO RESPONSE WHICH LED THE LD. AO TO MAKE ESTIMATED ADDITIONS AGAINST THE SAME @ 12.5% WHICH 3 ITA NO.6623/MUM/2017 KAILASH M.JOGANI ASSESSMENT YEAR: 2010-11 RESULTED INTO IMPUGNED ADDITIONS OF RS.3,84,548/-. THE SAME, UPON CONFIRMATION BY LD. CIT (A), IS BEING CONTESTED BEF ORE US. 3. THE LD. AR, AT THE OUTSET, DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE SUFFERED SIMILAR DISALLOWANCE IN AY 2011-1 2 WHERE THE LD. CIT(A) WHILE CONFIRMING THE ADDITION @12.5% ALLOWED CONCES SION OF GROSS PROFIT ALREADY DECLARED BY THE ASSESSEE AND THEREFORE, SIM ILAR VIEW MAY BE TAKEN IN THE MATTER. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] SUBMITTED THAT THE ADDITIONS WERE QUITE REASONABLE AND JUST. 4. UPON DUE CONSIDERATION, WE FIND THAT SIMILAR ISS UE AROSE IN ASSESSEES CASE FOR AY 2011-12 WHERE LD.CIT(A) HAS ALLOWED THE CONCESSION OF GROSS PROFIT ALREADY DECLARED BY THE ASSESSEE AND THE ORDER HAS ATTAINED FINALITY. THEREFORE, FOLLOWING THE RULE OF CONSISTENCY, TAKIN G THE SAME VIEW, WE RESTRICT THE IMPUGNED ADDITIONS TO 12.5% WITH CONCE SSION OF GROSS PROFIT RATE OF 5.28% ALREADY DECLARED BY THE ASSESSEE. RES ULTANTLY, THE NET ADDITIONS ARE ESTIMATED @7.22% OF RS.30,76,381/- WH ICH COMES TO RS.2,22,115/-. THE ORDER OF LD. CIT(A) STANDS MODIF IED TO THAT EXTENT. 5. RESULTANTLY, THE ASSESSEES APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH , 2018. SD/- SD/- (C. N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22. 03.2018 SR.PS:- THIRUMALESH 4 ITA NO.6623/MUM/2017 KAILASH M.JOGANI ASSESSMENT YEAR: 2010-11 ! / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. $, , , , / DR, ITAT, MUMBAI 6. -. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI