MAHALAKSHMI WOOD WORKS, MUMBAI V. INCOME TAX OFFICER-WARD 26(2)(4), MUMBAI

ITA 6736/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0449 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: VIMAL PUNMIYE
• Keywords: Bogus purchase
• 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. 6736 / MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) M/S. MAHALAKSHMI WOOD WORKS, ROOM NO.15, SHRI DATTA HOUSING SOCIETY, LAXMI NARAYAN MA NDIR MARG MOHILI VILLAGE, SAKINAKA ANDHERI EAST, MUMBAI 400 072 VS. ITO WD 26(2)(4), C - 10, BANDRA KURLA COMPLEX, BANDRA EAST MUMBAI 400 051 PAN/GIR NO. AAMFM4057D APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI VIMAL PUNMIYE RE VENUE BY MS. N. HEMALATHA DATE OF HEARING 08 / 02 /201 8 DATE OF PRONOUNCEME NT 13 / 02 /201 8 / 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) - 38, MUMBAI DATED 25/09/2017 FOR A.Y.2010 - 11 IN THE MATTER OF ORDER PASSED U/S.144 R.W.S. 147 OF THE INCOME TAX ACT, 1961. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. THE BRIEF FACTS OF THE CASE ARE THAT AO HAD RECEIVED INFORMATION FROM SALES TAX DEPARTMENT THROUGH O/O DGIT (INV.), MU MBAI THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD OBTAINED ENTRIES OF BOGUS PURCHASES THROUGH THE HAWALA PARTIES THEREBY CLAIMING TO HAVE INCURRED ITA NO. 6736/MUM/2017 SHRI MAHALAKSHMI WOOD WORKS 2 EXPENDITURE, WHICH ARE NOT GENUINE. THE NAMES OF THE PERSONS WHO HAVE OBTAINED THE BOGUS BILLS FROM SUCH HAWALA BILLERS ALONGWITH THE RANSACTION DETAILS OF EACH PERSON HAS ALSO BEEN RECEIVED BY THE AO. THE SALES TAX AUTHORITY DISPLAYED THE NAMES OF THESE HAWALA DEALERS ON THE WEBSITE OF SALES TAX DEPARTMENT OF MAHARASHTRA GOVERNMENT, WHO HAVE ONLY I SSUED BILLS WITHOUT ANY DELIVERY OF GOODS. 4. ACCORDINGLY, AO ADDED ENTIRE AMOUNT OF SUCH PURCHASES IN ASSESSEES INCOME. 5. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ACTION OF THE AO. ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE CONSIDERED RIVAL C ONTENTIONS AND FOUND FROM RECORD THAT ASSESSEE IS MANUFACTURER OF WOODEN PACKING BOX BASICALLY USED IN PACKING OF MACHINERY GOODS PURCHASED FROM M/S. DHRUV SALES CORPORATION WAS DONE THROUGH THE AGENT. AGENT HAS APPROACH ED ASSESSEE THAT HE IS HAVING GOOD Q UALITY WOODEN SCRAP THAT ALSO A T VERY REASONABLE RATE. AFTER VERIFYING THE QUALITY HE HAS PLACED ORDER WITH DHRUV SALES CORPORATION FOR WOODEN SCRAP AT REGULAR INTERVAL. DELIVERY OF GOOD TAKEN BY CLIENT THROUGH LOCAL TRANSPORT VEHICLE THESE GOODS WERE PURC HASE D FROM LOCAL MUMBAI DEALER SO OCTROI CHARGES WERE NOT APPLICABLE IN THIS CASE. AFTER TAKING DELIVERY OF GOODS IT IS CUT IN THE PRESCRIBED SIZE AND SHAPE AND THAT IT IS ASSEMBLED BY PUNCHING NAILS AND DELIVERED TO CUSTOMER . 7. WE ALSO FOUND THAT GP RATE OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS 15.25%. GP RATE OF THE ASSESSEE IN THE A.Y.2009 - 10 WAS ITA NO. 6736/MUM/2017 SHRI MAHALAKSHMI WOOD WORKS 3 14.70% AND 15.48% IN THE A.Y.2008 - 09. THUS, IT APPEARS THAT ASSESSEE IS SHOWING GOOD GP RATE ON ITS PRODUCT. KEEPING IN VIEW THE TOTALITY OF FACT S AND CIRCUMSTANCES OF THE CASE, WE RESTRICT THE ADDITION TO THE EXTENT OF 12.5% ON SUCH BOGUS PURCHASES. WE DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEAL IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 13 / 02 /201 8 SD/ - ( SANDEEP GOSAIN ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 13 / 02 /201 8 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//