SUCHITA PACAKAGING P. LTD, MUMBAI V. ITO WD 8(2)(4), MUMBAI

ITA 6932/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1128 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 28-11-2016
• Court: TRIBUNAL
• Department Lawyers: BHARTI SINGH
• Assessee Lawyers: ATUL MATHURIA
• Keywords: Bogus purchase
• Section: 69C

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 6932 /MUM/ 201 6 (ASSESSMENT YEAR 20 09 - 1 0 ) SUCHITA PACKAGING PVT. LTD. C/O. 502, SHATRUNJAY NEELKANTH VALLY 7 TH ROAD, RAJAWADI GHATKOPAR EAST MUMBAI - 400 077. VS. ITO WARD 8(2)(4) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAACS9946C ASSESSEE BY SHRI ATUL MATHURIA DEPARTMENT BY M ISS BHARTI SINGH DATE OF HEARING 3 . 5. 201 7 DATE OF PRONOUNCEMENT 3 .5 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22.9.2016 PASSED BY THE LEARNED CIT(A) - 14, MUMBAI AND IT RELATES TO A.Y. 2009 - 10. 2. SOLITARY ISSUE URGED BY THE ASSESSEE RELATES TO DISALLOWANCE OF PURCHASES TO THE TUNE OF ` 2,57,002/ - TREATING THE SAME AS TAX BOGUS IN NATURE. 3. I HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING PACKAGING MATERIALS. THE REVENUE RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THAT CERTAIN DEALE RS ARE ENGAGED IN PROVIDING BOGUS ACCOMMODATION BILLS TO THE PARTIES WITHOUT ACTUALLY SUPPLYING THE MATERIALS. IT WAS NOTICED THAT THE ASSESSEE HAS MADE PURCHASES FROM FOLLOWING PARTIES WHO HAVE BEEN DECLARED AS HAWALA DEALERS : - (A) M/S. SURAJ TIMBER MART ` 27,402/ - (B) M/S. SHYAM TRADERS ` 2,29,600/ - ` 2,57,002/ - SU CHITA PACKAGING PVT. LTD. 2 4. SINCE THE ASSESSEE DID NOT FURNISH EVIDENCE SUCH AS DELIVERY CHALLAN S , STOCK REGISTER, PAYMENT D ETAILS, LORRY RECEIPTS, OCTROI PAYMENT ETC., THE ASSESSING OFFICER DISALLOWED THE PURCHASES STA TED ABOVE BY INVOKING PROVISIONS OF SECTION 69C OF THE ACT. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAD DECLARED LOSS FROM THE BUSINESS TO THE TUNE OF ` 28,26,894/ - IN THE RETURN OF IN COME FILED BY IT. THE ASSESSING OFFICER , WITHOUT REDUCING THE LOSS BY THE AMOUNT OF DISALLOWANCE MADE BY HIM, ASSESSED THE DISALLOWANCE OF ` 2,57,002/ - AS TOTAL INCOME OF THE ASSESSEE. T HE LEARNED CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD THE PARTIES AN D PERUSED THE RECORD. WITHOUT GOING INTO THE MERITS OF THE ADDITIONS, I NOTICED THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY JUSTIFICATION FOR NOT REDUCING THE DISALLOWANCE OF PURCHASES FROM THE LOSS DECLARED BY THE ASSESSEE. LEARNED DEPARTMENTAL REPRESEN TATIVE ALSO COULD NOT GIVE ANY CONVINCING EXPLANATION F OR THE SAME. IT IS WELL SETTLED PROPOSITION THAT RIGHT AVAILABLE TO THE ASSESSEE CANNOT BE TAKEN AWAY BY THE ASSESSING OFFICER ACCORDING TO HIS WHIMS AND FANCIES. THE ASSESSEE HAS DECLARED LOSS OF ` 28 ,26,894/ - FROM THE BUSINESS CARRIED ON BY HIM. THE DISALLOWANCE OF PURCHASES MADE BY THE ASSESSING OFFICER RELATES TO THE VERY SAME BUSINESS ONLY . H ENCE, IN ALL FAIRNESS , THE DISALLOWED AMOUNT SHOULD HAVE GONE TO REDUCE THE LOSS DECLARED BY THE ASSESSEE. WHEN THIS ASPECT WAS POINTED OUT BY LEARNED AR, HE SUBMITTED THAT THE ASSESSEE , WITHOUT PREJUDICE HIS RIGHT TO CONTEST THE DISALLOWANCE, WOULD BE SATISFIED, IF DISALLOWED AMOUNT IS REDUCED FROM THE LOSS. THE LD A.R FURTHER SUBMITTED THAT AN ASSESSEE, WHO IS ALREADY INCURRING LOSSES, WOULD NOT BE BENEFITTED BY OBTAINING ALLEGED BOGUS PURCHASE BILLS. 6. ACCORDINGLY, I SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO REDUCE THE AMOUNT OF IMPUGNED DISALLOWANCE FROM THE LOSS DECLARED BY THE ASSESSEE AND ACCORDINGLY COMPUTE THE TOTAL LOSS OF THE ASSESSEE. SU CHITA PACKAGING PVT. LTD. 3 7 . OTHER GROUNDS URGED BY THE ASSESSEE ARE NOT ADJUDICATED IN VIEW OF THE DIRECTIONS GIVEN BY ME ABOVE. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 3 . 5 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 3 / 5 / 20 1 7 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) PS ITAT, MUMBAI