MANISH MAHIPTARAI SHAH, BHIWANDI V. ITO 1(2), KALYAN

ITA 663/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0312 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 30-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KARTAM
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 663 / MUM/20 1 7 ( ASSESSMENT YEAR : 2011 - 12 ) SHRI MANISH MAHIPTARAI SHAH, 346, KANERI KALYAN ROAD, OPP. SHANTI NAGAR POLICE STATION, BHIWANDI 421 302 VS. ITO 1( 2), KALYAN PAN/GIR NO. ACKPS4464Q APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI DEVENDRA JAIN REVENUE BY SHRI A.K.KARTAM DATE OF HEARING 04 / 08 /201 7 DATE OF PRONOUNCEME NT 04 / 08 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, THANE DATED 24/11/2016 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. THE ONLY GRIEVANCE OF ASSESSEE RELATES TO ADDITIO N OF RS.11,69,999/ - ON ACCOUNT OF BOGUS PURCHASES. 3. IN RESPECT OF BOGUS PURCHASES FOUND DURING THE COURSE OF REASSESSMENT AO ADDED THE SAME IN ASSESSEES INCOME. BY THE IMPUGNED ORDER, CIT(A) HAS UPHELD THE ADDITION AFTER CONSIDERING THAT GP AND NP RATE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS BEEN REDUCED SUBSTANTIALLY FROM 5.98%/2.87% IN THE A.Y.2008 - 09 TO 2.42%/0.74% IN THE A.Y.2011 - 12 UNDER CONSIDERATION. FROM THE ORDER OF ITA NO. 663/MUM/2017 SHRI MANISH MAHIPTARAI SHAH 2 CIT(A) WHICH IS CONSOLIDATED ORDER FOR THE A.Y. 2010 - 11 AND 2011 - 12, WE FOUND THAT IN THE A.Y.201 0 - 11 & 2011 - 12 , THE CIT(A) AFTER CONSIDERING THE GP /NP DECLARED BY THE ASSESSEE IN THE A.Y.2008 - 09 AT 5.98% /2.87% AND THE GP/NP SHOWN IN THE A.Y.2010 - 11 & 2011 - 12, AO WORKED OUT SUPPRESSED NP AT RS.3,91,493/ - AND RS.25 ,00,324/ - FOR THE A.Y.2010 - 11 AND 2011 - 12. AFTER CONSIDERING THE SAME THE CIT(A) UPHELD ADDITION OF RS.3,91,493/ - IN THE A.Y.2010 - 11 OUT OF BOGUS PURCHASE OF RS.11,61,471/ - HOWEVER, IN THE A.Y.201 1 - 1 2 , CIT(A) OBSERVED THAT SUPPRESSED GP / NP IS MORE THAN H AWALA PURCHASES OF RS.11,69,999/ - AND HE UPHELD THE ENTIRE ADDITION OF PURCHASES. 4. LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN THE A.Y. 2010 - 11 WHEREIN TRIBUNAL HAVE ULTIMATELY UPHELD ADDITION OF 5% OF BOGUS PURCHASES. AS PER LEARNED AR, THE FACTS ARE SIMILAR, THEREFORE, ADDITION FOR THE A.Y.2011 - 12 SHOULD ALSO BE RESTRICTED TO 5%. 5. IT IS CLEAR FROM THE ORDER OF CIT(A) THAT THERE IS SUBSTANTIAL FALL IN GP AND NP RATE FOR THE YEAR UNDER CONSIDERATION, THEREFORE CONSIDERING THAT THERE IS A SU PPRESSION OF PROFIT OF RS.25,00,324/ - T HE CIT(A) HAS UPHELD ENTIRE PURCHASES AS UNAPPROVED. IN ASSESSMENT YEAR 2010 - 11 WHERE ADDITION HAS BEEN UPHELD BY THE TRIBUNAL AT 5%, THE ASSESSEE HIMSELF HAS SHOWN GP AND NP OF 5.87%/1.97%. HOWEVER, DURING THE YEAR U NDER CONSIDERATION, THE GP AND NP SHOWN BY THE ASSESSEE ARE ONLY 2.42%/0.74%. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE AO TO UPHOLD THE ADDITION OF 12.5% IN RESPECT OF BOGUS PURCHASES. WE DIRECT ACCORDI NGLY. ITA NO. 663/MUM/2017 SHRI MANISH MAHIPTARAI SHAH 3 6. IN THE RESULT, APPEAL IS ALLOWED IN PART O RDER PRONOUNCED IN THE OPEN COURT ON THIS 04 / 08 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 04 / 08 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//