MUDRA EXIM PVT. LTD., MUMBAI V. ITO - 5(2)(3), MUMBAI

ITA 6971/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9092 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 06-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Keywords: Bogus purchase; Accommodation entries; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 6971/MUM/2018(A.Y.2013-14) ITA NO. 6972/MUM/2018(A.Y.2009-10) MUDRA EXIM PVT. LTD., 321, AMRIT DIAMOND HOUSE, OPERA HOUSE, MUMBAI 400004 PAN:AACFM3522P ...... APPELLANT VS. INCOME TAX OFFICER 5(2)(3), AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ..... RESPONDENT APPELLANT BY : SHRI HIMANSHU GANDHI RESPONDENT BY : SHRI R. BHOOPATI DATE OF HEARING : 18/12/2019 DATE OF PRONOUNCEMENT : 06/01/2020 ORDER THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE. ITA NO.6971/MUM/2018 IS AGAINST THE ORDER OF COMMISSION ER OF INCOME TAX (APPEALS)-10, MUMBAI [IN SHORT THE CIT(A) ], DAT ED 28/09/2018 FOR THE ASSESSMENT YEAR 2013-14. IN ITA NO.6972/MUM/2018 THE ASSESSEE HAS IMPUGNED THE ORDER OF CIT(A) DATED 28/09/2008 FOR ASSESSMENT YEAR 2009-10. SINCE THE ISSUE RAISED IN BOTH THE APPEALS IS AR ISING FROM SAME SET OF FACTS AND IDENTICAL ISSUE IS INVOLVED, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OF BY THIS COMPOS ITE ORDER. FOR THE SAKE OF CONVENIENCE, THE FACTS ARE EXTRAC TED FROM ASSESSMENT YEAR 2013-14: 2 ITA NO. 6971/MUM/2018(A.Y.2013-14) ITA NO. 6972/MUM/2018(A.Y.2009-10) ITA NO.6971/MUM/2018: 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPOR T AND EXPORT OF DIAMONDS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS IN DULGED IN OBTAINING ACCOMMODATION ENTRIES FROM MARC GEMS (AMOUNTING TO RS.3,35,06,028/-), ONE OF BHANWARLAL JAIN GROUP CONCERNS. THE ASSE SSING OFFICER MADE ADDITION OF 8% OF SUCH NON-GENUINE PURCHASE I.E. R S.26,80,482/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 17/03/ 2016 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT), THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE FI RST APPELLATE AUTHORITY VIDE IMPUGNED ORDER CONFIRMED THE ADDITION MADE BY ASSESSING OFFICER AND DISMISSED THE APPEAL OF ASSESSEE. 3. SHRI HIMANSHU GANDHI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW HAVE ERRED IN ESTIMATING ADDITION OF 8% ON ALLEGED BOGUS PURCHASES BY THE ASSESSEE FROM BHANWARLAL JAIN GROUP CONCERN. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAD FURNISHED TAX INVOICES AND BANK STATEMENTS TO THE LOWER AUTHORITIES, HOWEVER, THE DOCUMENTS FU RNISHED BY THE ASSESSEE WERE NOT TAKEN INTO CONSIDERATION. THE LD . AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PRAYED THAT IF AT ALL ADDITION IS TO BE MADE IT SHOULD BE RESTRICTED ONLY TO THE EXTENT OF THE DIFFERENCE IN GROSS PROFIT NOT DISCLOSED BY THE ASSESSEE ON THE ALLEGE D BOGUS PURCHASES. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PRAY ED FOR RESTORING THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER IN THE LIGHT OF DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. MOHAMMED HAJI ADAM & CO IN INCOME TAX APPEAL NO.1004 OF 2016 DECIDED ON 11/02/ 2019. 3 ITA NO. 6971/MUM/2018(A.Y.2013-14) ITA NO. 6972/MUM/2018(A.Y.2009-10) 4. ON THE OTHER HAND, SHRI R. BOOPATI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE APPEAL OF ASSESSEE. 5. BOTH SIDES HEARD, ORDERS OF LOWER AUTHORITIES PERUSED. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORT AND E XPORT OF DIAMONDS. IT IS ALLEGED THAT THE ASSESSEE HAS PROCURED BOGUS BIL LS TO THE TUNE OF RS.3,35,06,028/- FROM M/S. MARC GEMS, ONE OF BHANWA RLAL JAIN GROUP CONCERN. CONSEQUENTLY, THE ASSESSING OFFICER ESTIM ATED GROSS PROFIT @8% OF SUCH ALLEGED BOGUS PURCHASES. THE CIT(A) HAS UP HELD THE ADDITION MADE BY ASSESSING OFFICER. THE CONTENTION OF THE A SSESSEE IS THAT THE ADDITION MAY BE RESTRICTED TO THE EXTENT OF DIFFERE NCE BETWEEN ACTUAL GROSS PROFIT AND G.P DECLARED ON NON-GENUINE PURCH ASES FROM HAWALA DEALERS. TAKING INTO CONSIDERATION ENTIRETY OF F ACTS, I DEEM IT PROPER TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OF FICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DECISION OF HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT VS. MOHAMMED HAJI ADAM & CO (SUPRA). NEEDLESS TO SAY THAT WHILE DECIDING THE ISSUE AFRE SH, THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO TH E ASSESSEE, IN ACCORDANCE WITH LAW. 6. THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL O F ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE, IN THE TERMS AFORE SAID. ITA NO.6972/MUM/2018: 7. BOTH SIDES ARE UNANIMOUS IN STATING THAT THE FAC TS IN ASSESSMENT YEAR 2009-10 ARE SIMILAR TO ASSESSMENT YEAR 2013- 14. I FIND THAT THE ADDITION ON ACCOUNT OF ACCOMMODATION ENTRIES IN THE ASSESSMENT YEAR 4 ITA NO. 6971/MUM/2018(A.Y.2013-14) ITA NO. 6972/MUM/2018(A.Y.2009-10) UNDER APPEAL HAVE BEEN MADE ON SIMILAR LINES AS WER E MADE IN ASSESSMENT YEAR 2013-14. THE FINDING GIVEN IN ASS ESSMENT YEAR 2013-14 WOULD MUTATIS MUTANDIS APPLY TO ASSESSMENT YEAR 2009-10 AS WELL. FOR THE REASONS GIVEN WHILE DECIDING APPEAL OF THE ASSE SSEE IN ASSESSMENT YEAR 2013-14, THE PRESENT APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES IN SIMILAR TERMS. 8. IN THE RESULT, BOTH APPEALS BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 6 TH DAY OF JANUARY,2020. SD/- (VIKAS AWASTHY) JUDICIAL MEMBER MUMBAI, DATED 06/01/2020 VM , SR. PS(O/S) 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