M/s Geeta Sree, Kolkata V. I.T.O.Ward-51(4), Kolkata

ITA 668/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2157 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 03-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SA TYAJIT MANDAL CIT LD
• Assessee Lawyers: ANKIT JALAN
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B - SMC BENCH : KOLKATA [BEFORE HONBLE SHRI S.S. GODARA, JM ] I .T.A . NO. 668 /KOL/201 9 ASSESSMENT YEAR : 20 1 4 - 15 M/S. GEETA SREE V/S. ITO., WARD 51(4), KOLKATA PAN: AAIFG 3308B (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI A NKIT JALAN, AR FOR THE RESPONDENT : SHRI SATYAJIT MANDAL, ADDL.CIT, LD.DR DATE OF HEARING : 28 .8.2 01 9 DATE OF PRONOUNCEMENT : 30 .08.2019 ORDER SHRI S.S. GODARA, JM : 1. THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 20 1 4 - 15 ARISES AGAINST THE CIT(A), 15 , KOLKATAS ORDER DATED 11 - 12 - 2018 PASSED IN CASE NO. 249 /CIT(A) - 15/16 - 17/WD.51(4)/KOL. INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME - TAX ACT, 1961 ( IN SHORT ACT). HEARD BOTH THE PARTIES. CASE FILED PERUSED. 2 . THE A SSESSEES SOLE SUBSTANTIVE GROUND PR ESSED DURING THE COURSE OF HEARING CHALLENGES THE CORRECT NESS OF BOTH THE LOWER AUTHORITIES ACTION DISALLOWING PURCHASES OF RS. 22 , 06 , 854/ - AS BOGUS DURING ASSE SSMENT AS AFFIRMED THE LOWER APPELLATE PROCEEDINGS . 3. THERE IS NO DISPUTE ABOUT THE ASSESSEE FIRM TO HAVE BEEN TRADING IN SAREES AND READYMADE GARMENTS. THE DEPARTME NT CARRIED OUT A SURVEY AND MATERIAL COLLECTED DURING THE COURSE THEREOF INDICATED TO THE ASSESSING OFFICER THAT THE TAXPAYER HAD 2 I.T.A. NO. 668/KOL/2019 A.Y 2014 - 15 M/S. GEETA SREE 2 SUBMITTED 89 PU R CHASE BILLS OUT OF WHICH 88 WERE BILLS DATED 14.5.2013 AND 3.1. 2014. IT FURTH E R TR ANSPIRE D FROM THE ASESSEES PURCHASE REGISTER HAD RECORDED PURCHASES UPTO 7 - 1 - 2014 HAD BEEN ENTERED IN THE REGISTER ONLY W HEREAS THE DEPARTMENTS SURVEY ACTION HAD BEEN CONDUCTED ON 26 - 03 - 20 1 4. AND THAT N ONE OF ASSESSEES PARTNERS STATED BEFORE THE DEPARTMENTAL A UTHORITIES THAT THERE WERE ANY PURCHASE BILL S B E FORE 7 - 1 - 2014 WHICH HAD NOT BEEN ENTERED IN THE PURCHASE REGISTER. THE ASSESSING OFFICER CONCLUDED IN THESE FACTS THAT ASSESSEES PURCHASE BILLS COLLECTED AFTER THE SURVEY OPERATION WERE BOGUS. HE THEREFORE DISALLOWED THE CORRESPONDING PURCHASE BILL OF RS. 22,06,852/ - . THE CIT(A) HAS UPHELD THE SAME. 4. LEARNED COUNSEL FIRST OF ALL SUBMITS THAT BOTH THE LOWER AUTHORITIES HAVE NOT REJECTED ASSESSEE S AUDITED BOOKS DULY PROVING/ENTERING ALL THE PURCHASE BILLS. I FIND NO MERIT IN THE INSTANT PLEA SINCE THE ASSESSING OFFICER DETAILED DISCUSSION HAS MADE IT A CLEAR CASE OF BOGUS PURCHASES. 5. NEXT COMES EQUALLY IMPORTANT QUESTION AS TO WHETHER THE ENTIRE PURCHASES OR ONLY THE PROFITS ELEMENT THEREIN HAS TO BE DISALLOWED. H ON BLE JURISDICTIONAL HIGH COURT S RECENT DECISION IN PCIT V/S. SUBARNA RICE MILL (2018) 257 TAXMAN 509 (CAL) HOLD S THAT ONLY THE PROFIT ELEMENT TH A N THE ENTIRE UNDISCLOSED OR BOGUS STOCK IS TO BE ADDED. I THEREFORE DIRECT THE ASSESSING OFFIC E R TO ADD 12.5% GP ON ASSESSEE S BOTH PURCHASES. NECESSARY COMPUTATION TO FOLLOW AS PER LAW . 6 . THIS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 - 08 - 2019 SD/ - [ S.S.GODARA ] JUDICIAL MEMBER DATED : 30 - 08 - 2019 3 I.T.A. NO. 668/KOL/2019 A.Y 2014 - 15 M/S. GEETA SREE 3 **PRADIP, SR. PS C OPY OF THE O RDER FORWARDED TO: 1 . APPELLANT/ ASSESSEE: M/S. GEETA SREE C/O AGARWAL VISHWANATH & ASSOCIATES, 133/1/1A, S.N BANERJEE ROAD, PUSHKAL BHAWAN, 3 RD FL., KOLKATA - 13. 2. RESPONDENT/ ASSESSEE: I.T.O., WARD 51(4), KOLKATA, UTTARAPAN MARKET COMPLEX, MANIKTALA CIVIC CENTRE, ULTADANGA, KOLKATA - 54. 3..C.I.T (A) . - 4. C.I.T. - KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR H.O.O/D.D.O KOLKATA