A. VARSHIT & CO., MUMBAI V. ITO 25(2)(1), MUMBAI

ITA 6794/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1158 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 18-11-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Bogus purchase
• Section: 142(1); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 6794 / MUM/20 1 6 ( ASSESSMENT YEAR : 2007 - 08 ) A VARSHIT & CO., 802, MILLENIUM APARTMENTS, PLOT NO.661, LALUBHAI PARK ROAD, VILE PARLE (W) MUMBAI 400 056 VS. IT O 25(2)(1), MUMBAI 400 051 PAN/GIR NO. AAKFA6008L APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI SANJIV M. SHAH REVENUE BY MS. BEENA SANTOSH DATE OF HEARING 27 / 04 /201 7 DATE OF PRONOUNCEME NT 27 / 04 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST EXPARTE ORDER OF CIT(A) - 37, MUMBAI DATED 30/08/2016 FOR THE A.Y. 2007 - 08, IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. IT WAS CONTENDED BY LE ARNED AR THAT SINCE SIMILAR ISSUE WAS INVOLVED, ASSESSEE HAS REQUESTED BEFORE THE CIT(A) FOR CONSOLIDATION OF BOTH THE APPEALS, HOWEVER, THE CIT(A) HAS DISMISSED THE APPEAL ON THE PLEA THAT NOBODY APPEARED ON BEHALF OF THE ASSESSEE. ACCORDINGLY IT WAS REQU ESTED BY LEARNED AR THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE CIT(A) FOR PASSING ORDER AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 3. ON THE OTHER HAND, LEARNED DR CONTENDED THAT INSPITE OF GIVING SO MANY OPPORTUNITIES, ASSESSEE COULD NOT PR ODUCE ANYTHING IN SUPPORT OF ITA NO. 6794/MUM/2016 A. VARSHIT & CO., 2 THE PURCHASES BEING GENUINE, ACCORDINGLY CIT(A) WAS JUSTIFIED IN CONFIRMING THE SAME. 4. I HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSI NG OFFICER RECEIVED INFORMATION FROM DIT(INV) AND SALES - TAX DEPARTMENT THAT THE APPELLANT HAD TAKEN BOGUS PURCHASE ENTRIES OF RS. 16,16,268/ - FROM TWO PARTIES NAMELY M/S SUN DIAM AND M/S VATRAG JEWELS. ACCORDINGLY THE AO INITIATED PROCEEDINGS U/S 147 BY IS SUING NOTICES U/S 148. SUBSEQUENTLY NOTICES U/S 143(2) AND 142(1) WERE ALSO ISSUED AND SERVED ON THE ASSESSEE . THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF DIAMOND TRADING. THE AO ISSUED NOTICES U/S 133(6) TO THE TWO PARTIES FROM WHOM THE APPELLANT HA D MADE PURCHASES TO VERIFY THE GENUINENESS OF PURCHASE TRANSACTIONS, HOWEVER NO REPLY WAS FURNISHED BY THE SAID PARTIES. ACCORDINGLY, AO ADDED ENTIRE AMOUNT OF PURCHASE IN ASSESSEES INCOME. 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. SO FAR AS REOPENING IS CONCERNED, WE ARE SATISFIED THAT AFTER RECORDING REASONS FOR REOPENING, THE AO HAS ISSUED NOTICE U/S.148. THUS, THERE IS NO INFIRMITY IN THE ORDER OF CIT(A) FOR UPHOLDING THE REOPENI NG. 7. NOW, COMING TO THE MERIT OF THE ADDITION, WE FOUND THAT ALLEGATION OF THE AO WAS AS PER INFORMATION FROM THE SALES TAX DEPARTMENT, ASSESSEE HAS TAKEN ACCOMMODATION PURCHASES. HOWEVER, THE CORRESPONDING SALES HAVE NOT BEEN DENIED BY THE AO. WITHOUT PURCHASES THERE CANNOT BE ITA NO. 6794/MUM/2016 A. VARSHIT & CO., 3 SALE. THEREFORE, ADDING ENTIRE AMOUNT OF PURCHASES IN ASSESSEES INCOME IS NOT JUSTIFIED. 8. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, VIS - - VIS NATURE OF ASSESSEES BUSINESS, I RESTRICT ADDITION TO THE EXTENT OF 12.5% OF SUCH BOGUS PURCHASES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 27 / 04 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 27 / 04 /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//