ASHOK ELECTRICALS, MUMBAI V. INCOME TAX OFFICER 18(3)(2), MUMBAI

ITA 6706/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0325 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 24-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Bogus purchase; Opportunity of cross examination

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 6706 / MUM/20 17 & 6707/MUM/2017 ( ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 ) M/S. ASHOK ELECTRICALS 11, MANI BHAVAN LOHAR CHAWL MUMBAI 4 00 002 VS. ITO 18(3)(2) 6 TH FLOOR, ROOM NO.607, EARNEST HOUSE NARIMAN POINT PAN/GIR NO. AAHFA5768Q APPELLANT ) .. RESPONDENT ) ITA NO. 6746/ MUM/20 17 & 6747/MUM/2017 ( ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 ) M/S. ASIAN ELECTRICALS 135, TAW AWALA BUILDING LOHAR CHAWL MUMBAI 400 002 VS. ITO 18(3)(2) 6 TH FLOOR, ROOM NO.607, EARNEST HOUSE NARIMAN POINT PAN/GIR NO. AA AFA0602N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI JITENDRA SINGH REVENUE BY MS. N. HEMALATHA DATE OF HEARING 07 / 02 /201 8 DATE OF PRONOUNCEME NT 12 / 02 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY TWO DIFFERENT ASSESSEES FOR THE A.Y.2010 - 11 AND 2011 - 12 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961. 2. FACTS IN ALL THE FOUR APPEALS ARE SAME, WHE REIN ADDITION HAS BEEN MADE BY THE AO BY ESTIMATING EXTRA PROFIT AT 12.5% OF BOGUS PURCHASES. BY THE IMPUGNED ORDERS THE CIT(A) CONFIRMED THE ACTION OF AO. ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO. 6706/MUM/2017 AND OTH ER APPEALS M/S. ASHOK ELECTRICALS & M/S. ASIAN ELECTRICALS 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT ASSESSEE IS A DEALER IN ELECTRICAL GOODS. IN THE CASE OF ASHOK ELECTRICALS, DURING THE COURSE OF ASSESSMENT FOR A.Y.2010 - 11, AO MADE ADDITION OF RS.15,175/ - BEING 12.5% OF PURCHASES OF RS.1,21,406/ - FROM THE SO CALL ED HAWALA DEALERS, HOWEVER, AO HAS NOT REJECTED BOOKS OF ACCOUNTS. IT WAS ALSO ARGUED BY LEARNED AR THAT NO OPPORTUNITY OF CROSS EXAMINATION WAS GIVEN BY THE AO IN RESPECT OF THE DEALERS ON WHOSE STATEMENT AO HAS RELIED. IT WAS ALSO SUBMITTED THAT COPIES O F STATEMENT / DOCUMENTS ON WHICH AO HAS RELIED UPON WERE ALSO NOT GIVEN TO THE ASSESSEE. FROM THE RECORD, WE FOUND THAT ON THE BASIS OF INFORMATION FROM SALES TAX AND DGIT(INV.), AO FOUND THAT ASSESSEE HAS NOT PURCHASED GOODS FROM THE PARTIES AS RECORDED I N ITS BOOKS OF ACCOUNTS, THEREFORE, ESTIMATED EXTRA PROFIT OF 12.5% ON SUCH PURCHASES. W E FOUND THAT BEFORE THE CIT(A) ASSESSEE HAS FILED PURCHASE BILLS IN RESPECT OF PURCHASES MADE FROM SO CALLED PARTIES VIDE LETTER DATED 09/09/2015 AND CORRESPONDING SALE S BILLS TO WHOM SALES WER E MADE FOR THE GOODS PURCHASED FROM THE SO CALLED HAWALA DEALERS VIDE LETTER DATED 15/12/2015 ALONGWITH ITEMWISE BREAK UP OF SALES AND PURCHASES. KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, VIS - - VIS NATURE OF ASSESSEE S BUSINESS, WE MODIFY THE ORDER OF LOWER AUTHORITIES AND RESTRICT THE ADDITION TO THE EXTENT OF 10% OF BOGUS PURCHASES IN ALL THE ABOVE CASES. ITA NO. 6706/MUM/2017 AND OTH ER APPEALS M/S. ASHOK ELECTRICALS & M/S. ASIAN ELECTRICALS 3 5. IN THE RESULT, APPEALS ARE ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 12 / 02 /201 8 SD/ - ( SANDEEP GOSAIN ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 02/ 201 8 KARUNA SR. PS COPY OF THE ORDER FORW ARDED 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//