PR PHARMA SOURCE P. LTD, MUMBAI V. ASST CIT 10(3)(2), MUMBAI

ITA 692/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9433 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMALATHA
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.692/MUM/2017 (ASSESSMENT YEAR 2009-10) P.R PHARMA SOURCE PVT. LTD, A-407 ANJANI COMPLEX, 4 TH FLOOR, OPP.GURUNANK PETROL PUMP, ANDHERI KURLA ROAD, CHAKALA, ANDHERI (EAST), MUMBAI 400 099. PAN AAECP 2829H ...... APPELLANT VS. THE ACIT, CIR. 10(3)(2), MUMBAI. .... RESPO NDENT APPELLANT BY : SHRI HARIDAS BHAT RESPONDENT BY : MS. HEMALATHA DATE OF HEARING : 12/07/2017 DATE OF PRONOUNCEMENT : 06/10/2017 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTA INING TO ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-17 MUMBAI DATED 28/11/2016, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 147 OF THE I NCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 10/02/2015. 2. IN THIS APPEAL, THE SOLITARY GRIEVANCE OF THE A SSESSEE IS WITH RESPECT TO AN ADDITION OF RS.2,63,994/- MADE BY THE INCOME TAX AU THORITIES ON ACCOUNT OF BOGUS PURCHASES. 2 ITA NO.692/MUM/2017 (ASSESSMENT YEAR 2009-10) 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF TRADING IN RAW MATERIALS FOR THE PHARM ACEUTICAL INDUSTRY. ON THE BASIS OF THE INFORMATION RECEIVED FROM THE MAHARASH TRA SALES TAX DEPARTMENT THAT ASSESSEE HAD MADE PURCHASES OF RS.2,63,994/- F ROM ONE M/S. GANESH ENTERPRISES, A DEALER, WHOSE NAME APPEARED IN THE LIST OF HAWALA DEALERS, THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUA NCE OF NOTICE UNDER SECTION 148 OF THE ACT AND FINALIZED THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 148 OF THE ACT ON 10/02/2015. IN THE SAID ASSESSMEN T PROCEEDINGS THE ASSESSING OFFICER TREATED THE PURCHASES MADE FROM M/S. GANESH ENTERPRISES OF RS.2,83,994/- AS BOGUS, BASED ON THE INFORMATION RECEIVED FROM MAHARASHTRA SALES TAX DEPARTMENT AS WELL AS THE FAI LURE OF THE ASSESSEE TO PRODUCE THE PARTY FOR APPROPRIATE VERIFICATION. T HE CIT(A) HAS ALSO AFFIRMED THE ADDITION, AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL PARTIES AND PERUSED THE RELEVANT RECORD. NO DOUBT, IN THE PRESENT CASE, THE BASIS OF THE ASSESS ING OFFICER IS PRIMARILY THE INFORMATION RECEIVED FROM THE MAHARASHTRA SALES TAX DEPARTMENT THAT THE CONCERN IN QUESTION I.E.M/S. GANESH ENTERPRISES IS APPEARING IN THE LIST PREPARED BY THEM OF HAWALA DEALERS, WHO DO NOT ACTU ALLY TRANSACT, BUT ARE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. IT IS ALSO A FACT THAT ON BEING ASKED TO PRODUCE THE PARTY, THE ASSESSEE COULD NOT DO SO, BUT SUMMARILY RELIED UPON THE DOCUMENTARY EVIDENCE. BE THAT AS IT MAY, IT IS ALSO EMERGING FROM RECORD THAT ASSESSEE IS A TRADER OF GOODS AND ITS S ALES, INCLUDING THE SALES OF THE IMPUGNED PURCHASE OF GOODS, STANDS ESTABLISHED AND IS NOT DOUBTED. UNDER SUCH CIRCUMSTANCES, FOLLOWING THE RATIO OF THE GUJA RAT HIGH COURT IN THE CASE OF SIMIT P. SHETH, 356 ITR 451(GUJ) WHAT IS LIABLE TO BE ASSESSED IS MERELY THE PROFIT ELEMENT ON THE UNPROVED PURCHASES AND NOT TH E ENTIRE AMOUNT OF 3 ITA NO.692/MUM/2017 (ASSESSMENT YEAR 2009-10) PURCHASE. THUS, CONSIDERING THE SAID RATIO, I SET- ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO RETAIN AN ADDIT ION OF AMOUNT EQUAL TO 12.5% OF THE UNPROVED PURCHASES AND DELETE THE BALANCE. 5. THUS, ASSESSEE GETS PARTIAL RELIEF AND ACCORDING LY THE CAPTIONED APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/10/2017 SD/- (G.S.PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 06/10/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI