ITO WARD 25 (2)(5), MUMBAI V. KETAN GIRISH DOSHI, MUMBAI

ITA 6804/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1393 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Keywords: Bogus purchase
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM ITA NO. 6804/MUM/2018 ( ASSESSMENT YEAR: 2010-11) I.T.O. WARD-25(2)(5) MUMBAI. VS. SHRI KETAN GIRISH DOSHI, 11, 5 TH FLOOR, PLOT NO. 27, RAJ HEM, NAVYUG, V.M.ROAD, VILE PARLE-W, MUMBAI-400056. PAN/GIR NO. AAIPD 5858 P (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI KUMAR PADMAPANI BORA (SR.DR) ASSESSEE BY NONE DATE OF HEARING 12/12/2019 DATE OF PRONOUNCEMENT 12/12/2019 / O R D E R PER: R.C. SHARMA, A.M. THIS IS THE APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE LD. CIT(A)-53, MUMBAI DATED 12/09/2018 FOR THE A.Y. 201 0-11 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED FOR UPH OLDING THE ADDITION TO THE EXTENT OF 12.5% OF THE ALLEGED BOGUS PURCHAS ES. 3. AT THE TIME OF HEARING, NO BODY APPEARED ON BEHA LF OF THE ASSESSEE IN SPITE OF GIVING NOTICE, THEREFORE, THE BENCH DECIDED TO DISPOSE OFF THE APPEAL AFTER HEARING THE LD. DR AS WELL AS CONSIDERING THE MATERIAL PLACED ON RECORD. ITA NO. 6804/MUM/2018 ITO VS SHRI KETAN GIRISH DOSHI 2 4. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AND FOUND FROM THE RECORD THAT THE A.O. HAS ADDED RS. 4 ,44,433/- OF ALLEGED BOGUS PURCHASES IN ASSESSEES INCOME. BY THE IMPUGN ED ORDER, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO THE EXTENT OF 12.5% OF BOGUS PURCHASES TRANSACTION ONLY FOR 7 PARTIES AMOUNTING TO RS. 14,48,613/-. PRECISE OBSERVATION OF THE LD. CIT(A) WAS AS UNDER: 5.6 EVEN IF MATERIALS HAVE BEEN PURCHASES, THEY AR E NOT PURCHASED FROM THESE PARTIES AND MAY BE IN CASH FROM UNDISCLOSED P ARTIES. BY PURCHASING FROM GREY MARKET, THE APPELLANT WOULD HA VE BENEFITED BY THE SAVINGS OF TAXES. THE APPELLANT WAS ASKED WHY D ISALLOWANCE SHOULD NOT BE COMPUTED @ 12.5%. NO SUBMISSION WAS FILED. T HEREFORE, IN FACT AND CIRCUMSTANCES OF THE CASE, IN THIS PARTICULAR C ASE, IT IS CONSIDERED MOST APPROPRIATE TO ADOPT 12.5% PROFIT WHICH CAN TA KE CARE OF THE ROTATION OF CAPITAL UTILIZED FOR SUCH TRANSACTION. HENCE, IN THE LIGHT OF FINDING OF THE HONBLE GUJARAT HIGH COURT IN THE CA SE OF CIT VS SIMIT P SHETH, 12.5% PROFIT IS FOUND TO BE APPROPRIATE FOR ASCERTAINMENT OF TAXABLE INCOME RELATED TO SUCH TRANSACTION. IT IS N OTED THAT WHILE 7 PARTIES FROM WHOM PURCHASES OF RS. 14,48,613/- ARE MENTIONED IN THE INFORMATION RECEIVED WHICH IS THE BASIS OF REOPENIN G OF ASSESSMENT, THE ASSESSING OFFICER HAS IN PARA 5 MENTIONED IMPUGNED PURCHASES AT RS. 3,15,28,603/- AND FINALLY IN PARA 9 MADE DISALLOWAN CE ON PURCHASES OF RS. 1,48,14,431/-. NOTHING IS MENTIONED IN THE ASSE SSMENT ORDER AS TO HOW THE FIGURES HAVE CHANGED NOR THERE IS MENTION O F ANY OTHER PURCHASE PARTY. THUS, THE CONTENTION OF APPELLANT I S CORRECT THAT THE ASSESSING OFFICER HAS TAKEN AN ERRONEOUS FIGURE IN COMPUTING THE DISALLOWANCE. HENCE THE DISALLOWANCE IS COMPUTED BA SED ON IMPUGNED PURCHASES OF RS. 14,48,613/-. THE DISALLOWANCE IS T HEREFORE UPHELD AT RS. 1,81,080/-. THE APPELLANT GETS A RELIEF OF RS. 2,63,353/-. THUS, THE GROUNDS OF APPEAL NO. 2 AND 3 ARE PARTLY ALLOWED. ITA NO. 6804/MUM/2018 ITO VS SHRI KETAN GIRISH DOSHI 3 5. IT IS CLEAR FROM THE ORDER OF THE LD. CIT(A) THA T AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES AND AFTER APPLYING THE JUDICIAL PRONOUNCEMENTS HAVE VERY REASONABLY RESTRICTED THE ADDITION TO THE EXTENT OF 12.5% AFTER RECORDING A DETAILED FINDING ON PARA 5.6 OF HIS APPELLATE ORDER. NOTHING WAS PLACED ON RECORD BY TH E LD. DR SO AS TO PERSUADE US TO DEVIATE FROM THE FINDING AND CONCLUS ION OF THE LD. CIT(A). ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) FOR REDUCING THE ADDITION ON ACCOUNT OF BOGU S PURCHASES TO RS. 1,81,080/- IN PLACE OF ADDITION OF RS. 4,44,433/- S O MADE BY THE A.O. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER, 2019. SD/- (VIKAS AWASTHY) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 12/12/2019 *RANJAN 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//