M/S SUNRISE CORPORATION, MUMBAI V. ITO 17 (3)(4), MUMBAI

ITA 6998/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5901 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase; Set aside
• Section: 143(3); 143(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.6998/M/2019 ASSESSMENT YEAR: 2009-10 M/S. SUNRISE CORPORATION, A-22, GROUND FLOOR, GHANSHYAM INDUSTRIAL ESTATE, OFF. VEERA DESAI ROAD, ANDHERI (WEST), MUMBAI 400 053 PAN: AAAFS4954M VS. INCOME TAX OFFICER- 17(3)(4), AAYAKAR BHAVAN, ROOM NO.111, 1 ST FLOOR, MUMBAI - 400020 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : MS. SMITA VERMA, D.R. DATE OF HEARING : 23.08.2021 DATE OF PRONOUNCEMENT : 14.09.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 07.06.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. AT THE TIME OF HEARING WHEN THE CASE WAS CALLED FOR HEARING, NEITHER ASSESSEE NOR HIS AUTHORISED REPRESENTATIVE WAS PRESENT TO ATTEND THE HEARING NOR ANY APPLICATION FOR ADJOU RNMENT WAS FILED. THEREFORE, WE ARE DECIDING THE APPEAL OF TH E REVENUE AFTER HEARING THE LD. D.R. AND AFTER CONSIDERING THE MERI TS OF THE CASE. ITA NO.6998/M/2019 M/S. SUNRISE CORPORATION 2 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION TO 20.77% OF THE BOGUS PURCHASES AS MADE BY THE AO. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED T HE RETURN OF INCOME ON 24.09.2009 DECLARING TOTAL INCOME OF RS.5 ,81,122/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THE CASE OF THE ASSESSEE WAS THEREAFTER REOPENED BY THE AO A FTER RECEIPT OF INFORMATION FROM DGIT (INV.), MUMBAI THAT ASSESS EE IS BENEFICIARY OF HAWALA PURCHASE ENTRIES TO THE EXTEN T OF RS.67,35,253/- AND ACCORDINGLY THE NOTICE UNDER SEC TION 148 OF THE ACT WAS ISSUED ON 10.03.2014. THE AO CALLED FO R VARIOUS DETAILS AND INFORMATION FROM THE ASSESSEE FROM TIME TO TIME DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH W ERE DULY FILED BEFORE THE AO. THE AO FINALLY REJECTED THE C ONTENTIONS OF THE ASSESSEE AND TREATED THE PURCHASES AS NON GENUI NE THEREBY MAKING AN ADDITION OF RS.13,98,912/-, BEING 20.77% OF THE PURCHASES, TO THE INCOME OF THE ASSESSEE BY FRAMING ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 OF THE A CT DATED 23.03.2015. 5. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DIS MISSED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE ORDER OF AO ON THE GROUND THAT THE PURCHASES COULD NOT BE VERIFIED. 6. AFTER HEARING THE LD. D.R. AND PERUSING THE MATE RIAL ON RECORD, WE OBSERVE THAT LD. CIT(A) HAS SIMPLY AFFIR MED AND UPHELD THE ORDER ON THE GROUND THAT THE PURCHASES M ADE BY THE ASSESSEE REMAINED UNVERIFIED. WE NOTE THAT AO APP LIED A RATE OF 20.77% ON THE BASIS OF GP DECLARED BY THE ASSESS EE. IN OUR OPINION THE ADDITION AS SUSTAINED BY THE LD CIT(A) IS EXCESSIVE ITA NO.6998/M/2019 M/S. SUNRISE CORPORATION 3 AND ON THE HIGHER SIDE AS IT WOULD RESULT INTO UNRE ALISTIC GP RATE OF THE ASSESSEE. WE NOTE THAT THE CO-ORDINATE BENCH ES OF THE TRIBUNAL HAVE BEEN TAKING A CONSISTENT VIEW THAT IN CASE OF BOGUS PURCHASES ONLY A GP RATE RANGING BETWEEN 2% T O 12.5% WHEREAS THE LD. CIT(A) HAS ASSESSED THE INCOME @ 20 .77% OF THE BOGUS PURCHASES. THEREFORE WE SET ASIDE THE DECISIO N OF LD CIT(A) AND DIRECT THE AO TO APPLY A RATE OF 12.5% OF THE T OTAL PURCHASES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.09.2021. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 14.09.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.