DEPUTY COMMISSIONER OF INCOME TAX 15 (1)(1), MUMBAI V. FURNACE FABRICA (I) LIMITED, MUMBAI

ITA 6877/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3306 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 05-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV GU BGOBRA
• Keywords: Bogus purchase; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F , MUMBAI BEFORE SHRI C.N. PRASAD , HONBLE JUDICIAL MEMBER AND SHRI O.P.MEENA , HONBLE ACCOUNTANT MEMBER ITA NO. 6877 /MUM/201 7 (A.Y: 200 9 - 10 ) DCIT 15(1)(1 ) ROOM NO . 470, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V. M/S. FURNACE FABRICA (I) LIMITED 506 - 507, SWASTIC CHAMBERS, CST ROAD, CHEMBUR, MUMBAI 400 071 PAN NO: AAACF 0527 E (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI RAJIV GUBGOBRA ASSESSEE BY : NONE DATE OF HEARING : 14.02.2019 DATE OF PRONOUNCEMENT : 14.02.2019 O R D E R PER C.N. PRASAD , JUDICIAL MEMBER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 24 , MUMBAI IN APPEAL NO. CIT(A) - 24 / DC IT - 15(1)(1)/IT - 323/2016 - 17 DATED 22.09.2017 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS. 61,43,781/ - ON ACCOUNT OF BOGUS PURCHASES TO ONLY 12.5% OF THE SUCH BOGUS PURCHASES, WITHOUT GIVING ANY FINDINGS AS TO HOW 12.5% HAS BEEN WORKED OUT AND ALSO IGNORING THAT THE A SSESSEE FAILED TO DISCHARGE THE ONUS ON IT TO ESTABLISH DURING THE ASSESSMENT PROCEEDINGS, THE GENUINENESS OF PURCHASES WHICH WERE MADE THROUGH BOGUS PARTIES.' 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERR ED IN RESTRICT ING THE ADDITION O N ACCOUNT OF BOGUS PURCHASES TO ONLY 12.5% OF 2 ITA NO. 6877/MUM/2017 (A.Y:2009 - 10) M/S. FURNACE FABRICA (I) LIMITED THE BOGUS PURCHASES, WITHOUT APPRECIATING THE RATIO OF THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF N.K. PROTEINS LTD., WHEREIN IT HAS BEEN HELD THAT IN THE EVENT OF BOGUS PUR CHASES, THE ADDITION OF WHOLE OF SUCH PURCHASES IS REQUIRED TO BE MADE AND THIS DECISION HAS BEEN CONFIRMED BY THE HON'BLE SUPREME COURT IN SLP NO. CC NO. 769 OF 2017, BY DISMISSING THE SLP OF THAT ASSESSEE.' 3. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED'. 4 . THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUNDS OR ADD NEW GROUNDS OR ADD A NEW GROUND OF APPEAL, WHICH MAY BE NECESSARY, AT ANY TIME BEFORE OR AT THE TIME O F HEARING OF APPEAL. 3. ON A PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, IT IS FOUND THAT THE TAX EFFECT ON THE ISSUE IN THE PRESENT APPEAL IS BELOW . 2 0 LAC S AND IN VIEW OF THE CBDT CIRCULAR N O . 3/2018 DATED 11/07 /201 8 IN F.NO.279/MISC.142/2007 - ITJ (PT) , THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. THEREFORE, WE DI SMISS THE APPEAL OF THE REVENUE ON ACCOUNT OF LOW TAX EFFECT . 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2019 SD/ SD/ ( O.P. MEENA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 14/02/2019 GIRIDHAR, SR.PS COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., MUMBAI