KRISHNA TRADERS, MUMBAI V. INCOME TAX OFFICE, WARD-2(2), KALYAN

ITA 6644/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0171 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: SUDHIR VASANT HUNNARGIKAR
• Keywords: Reopening of assessment; Bogus purchase; Reason to believe
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 6644 / MUM/20 17 TO 6646/MUM/2017 ( ASSESSMENT YEAR : 2009 - 10 TO 2011 - 12 ) M/S. KRISHNA TRADERS HOUSE NO.891, NAVA BHENDI PADA KALYA N B ADLAPUR ROAD AMBARNATH (W) 421 501 DIST. THANE VS. ITO WARD 2(2) 2 ND FLOOR, MOHAN PLAZA WAYALE NAGAR KHADAKPADA KALYAN (W) 421 301 PAN/GIR NO. AA I FM9429R APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI SUDHIR VASANT HUNNARGIKAR REVENUE BY MS. N HEMALATHA DATE OF HEARING 06 / 02 /201 8 DATE OF PRONOUNCEME NT 26 / 02 / 201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 3,MUMBAI DATED 20/09/2017 FOR A.Y. 2009 - 10, 2010 - 11 AND 2011 - 12 IN THE MATTER OF ORDER PASSED U/S.144 R.W.S. 147 OF THE INCOME TAX ACT, 1961. 2. COMMON GRIEVANCE OF ASSESSEE IN ALL THE YEARS RELATE TO REOPENING OF ASSESSMENT AND ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES. 3. RIVAL CONTENTI ONS HAVE BEEN HEARD AND RECORD PERUSED. 4. IN ALL THE YEARS UNDER CONSIDERATION, INCOME TAX D EPARTMENT GOT INFORMATION FROM SALES TAX DEPARTMENT GIVING NAME AND ADDRESS OF ITA NO. 6644 - 6646/MUM/2017 M/S. KRISHNA TRADERS 2 DEALERS WHO HAVE PROVIDED ENTRIES FOR BOGUS PURCHASES. ON THE BASIS OF THIS INFORMAT ION, THE AO REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S.148. IN THE ASSESSMENT FRAMED U/S.143(3) R.W.S.147, AO ADDED THE ENTIRE AMOUNT OF SUCH PURCHASES IN THE INCOME OF THE ASSESSEE. SUCH PURCHASES WAS RS.9.89 LAKHS IN A.Y.2009 - 10, RS.74,660/ - IN A.Y.20 10 - 11 AND RS.5.99 LAKHS IN A.Y.2011 - 12. 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO. THE ASSESSEE HAS CHALLENGED THE REOPENING ON THE PLEA THAT REOPENING WAS BASED UPON THE REASONS TO SUSPECT INSTEAD OF REASON TO BELIEVE. IT WAS FURTHER ARGUED THAT AO WAS NOT JUSTIFIED IN MAKING ADDITION ON THE BASIS OF STATEMENT GIVEN BY THE THIRD PARTIES BEFORE THE SALES TAX DEPARTMENT WITHOUT CONDUCTING ANY FURTHER INVESTIGATION IN THIS REGARD. 6. ON THE OTHER HAND, LEARNED DR ARGUED THAT SALES TAX DE PARTMENT HAS GIVEN DEFINITE INFORMATION FOR SUCH BOGUS SUPPLIERS , A CCORDINGLY, AO WAS JUSTIFIED IN REOPENING THE ASSESSMENT AND ADDING THE ENTIRE AMOUNT OF SUCH PURCHASES IN ASSESSEES INCOME. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THR OUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT DEPARTMENT HAS NOT DISPUTED THE CORRESPONDING SALES AFFECTED BY THE ASSESSEE IN ALL THE YEARS UNDER CONSIDERATION. WE ALSO FOUND THAT ASSESSEE HAD SHOWN GP OF 10.63% IN THE A.Y.2009 - 10, 10 .60% IN A.Y.2008 - 09 AND 10.51% IN A.Y.2007 - 08. THUS, THE AVERAGE GP ITSELF SHOWN BY THE ASSESSEE IS 10.58%. WE FOUND THAT ASSESSEE BEING A RETAIL TRADER IN STEEL AND OTHER BUILDING MATERIAL, THEREFORE, GP OFFERED BY IT APPEARS TO BE REASONABLE. ITA NO. 6644 - 6646/MUM/2017 M/S. KRISHNA TRADERS 3 KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE AO TO MAKE FURTHER ADDITION OF 1 0 % OF SUCH BOGUS PURCHASES IN ALL THE THREE YEARS UNDER CONSIDERATION. WE DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 26 / 02 /201 8 SD/ - ( SANDEEP GOSAIN ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 26 / 02 /201 8 K ARUNA 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//