ACIT - 26 (2), MUMBAI V. RAJKUMAR T. NAGAR, MUMBAI

ITA 7049/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0631 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & . ,#$#% SHRI G.MANJUNATHA, ACCOUNTANT MEMBER . 7048& 7049 / /2018(. 2010-11 &2011-12 ) ITA NO.7048 & 7049/MUM/2018(A.Y.2010-11 & 2011-12) ITO -26(2), BUILDING NO.C-11, 5 TH FLOOR, ROOM NO.510, PRAYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E) MUMBAI 400 051 ...... - / APPELLANT VS. RAJKUMAR T. NAGAR, PROP. OF M/S. SHKOMIN SERVICES, A/53, NANJYOT INDL. ESTATE, ANDHERI KURLA ROAD, SAFED POOL, MUMBAI 400 072 PAN:AAAPN 7071Q ..... .// RESPONDENT -0/ APPELLANT BY : MS. R.KAVITHA ./0/ RESPONDENT BY : NONE 1/ / DATE OF HEARING : 17/02/2020 234 1/ / DATE OF PRONOUNCEMENT : 19/03/2020 #/ ORDER PER VIKAS AWASTHY, JM: THESE APPEALS BY THE REVENUE ARE DIRECTED AGAI NST THE ORDERS OF COMMISSIONER OF INCOME TAX(APPEALS)-38, MUMBAI (IN SHORT THE CIT(A)) FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12 RESPECTIV ELY. BOTH THE IMPUGNED 2 ITA NO.7048 & 7049/MUM/2018(A.Y.2010-11 & 2011-1 2) ORDERS ARE OF EVEN DATE I.E. 28/06/2018. SINCE THE FACTS IN BOTH THE IMPUGNED ASSESSMENT YEARS ARE SIMILAR AND THE GROUNDS RAISED BY THE REVENUE IN BOTH THE APPEALS ARE IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED VIDE THIS COMMON ORDER. HOWEVER, FO R THE SAKE OF CONVENIENCE THE FACTS ARE NARRATED FROM THE APPEAL FOR ASSESSMENT YEAR 2010-11. ITA NO.7048/MUM/2018(A.Y. 2010-11) 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ENGI NEERING AND ELECTRICAL GOODS. THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEI VED FROM THE INVESTIGATION WING OF THE DEPARTMENT. AS PER THE INFORMATION REC EIVED, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.5,0 0,445/- FROM THE DECLARED HAWALA DEALERS. THE ASSESSING OFFICER MADE ADDITIO N OF THE ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 09/03/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOM E TAX ACT, 1961 ( IN SHORT THE ACT ) THE ASSESSEE FILED APPEAL BEFORE THE C IT(A). THE FIRST APPELLATE AUTHORITY AFTER CONSIDERING THE FACTS OF THE CASE, MATERIAL AVAILABLE ON RECORD AND THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REPORTED AS 356 ITR 451 RESTRICTED THE DIS ALLOWANCE TO 20% OF THE ALLEGED BOGUS PURCHASES. AGAINST THE AFORESAID FIN DINGS OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE CIT(A). 3 MS. R. KAVITHA, REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS FROM THE DECLARED HAWALA DEALERS. THE ASSESSEE FAILED TO FURNISH DOCUMENTARY EVIDENCE S/DETAILS TO SUBSTANTIATE 3 ITA NO.7048 & 7049/MUM/2018(A.Y.2010-11 & 2011-1 2) GENUINENESS OF THE PURCHASES. NEITHER THE PARTIES FROM WHOM ALLEGED PURCHASES MADE WERE PRODUCED NOR QUANTITATIVE DETAI LS OF THE STOCK AND THE TRAIL OF GOODS WAS FURNISHED BY ASSESSEE BEFORE THE ASSESSING OFFICER. THUS, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE UNPROVED/SUSPICIOUS PURCHASES. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPAR TMENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTH ORITIES BELOW. THE ASSESSEE HAD ALLEGEDLY OBTAINED BILLS AMOUNTING TO RS.5,00,445/- FROM HAWALA DEALERS. THE ASSESSING OFFICER MADE ADDITION OF 10 0% OF SUCH BOGUS PURCHASES. IT IS NOW A WELL SETTLED LEGAL PROPOSIT ION THAT THE ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED, IT IS ONLY THE PRO FIT ELEMENT EMBEDDED IN SUCH ALLEGED BOGUS PURCHASES THAT HAS TO BE BROUGHT TO TAX. THE REVENUE HAS NOT RAISED ANY DOUBT OVER THE TURNOVER OF THE ASSES SEE. THUS, WITHOUT INPUTS THERE CANNOT BE PRODUCTION AND PROCESSING. THE CIT (A) AFTER CONSIDERING ALL THESE FACTS AND THE GP DECLARED BY THE ASSESSEE IN THE PRECEDING ASSESSMENT YEAR ESTIMATED GP ON THE ALLEGED BOGUS PURCHASES @ 20%. WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAM E IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT . ITA NO.7049/MUM/2018 (A.Y. 2011-12): 6. THE FACTS IN THE ASSESSMENT YEAR 2011-12 ARE I DENTICAL TO THE FACTS IN ASSESSMENT YEAR 2010-11, EXCEPT FOR THE AMOUNT OF ADDITION. THE ASSESSING OFFICER IN ASSESSMENT YEAR 2011-12 HAS MADE ADDITI ON OF RS.1,44,749/- IN RESPECT OF BOGUS PURCHASES. SINCE, THE FACTS ARE SIMILAR AND THE GROUNDS RAISED BY THE REVENUE ASSAILING FINDINGS OF CIT(A) ARE IDE NTICAL TO THE ONE RAISED IN 2010-11, THE FINDINGS GIVEN WHILE ADJUDICATING THE APPEAL OF THE REVENUE FOR 4 ITA NO.7048 & 7049/MUM/2018(A.Y.2010-11 & 2011-1 2) ASSESSMENT YEAR 2010-11 WOULD MUTATIS MUTANDIS APP LY TO THE ASSESSMENT YEAR 2011-12 AS WELL. FOR THE SIMILAR REASONS, TH E APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 7. IN THE RESULT, BOTH APPEALS BY THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 19TH DAY OF MARCH, 2020. SD/- SD/- (G.MANJUNATHA) (VIKAS AW ASTHY) #$ / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 6/ DATED 19/03/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. - / THE APPELLANT , 2. ./ / THE RESPONDENT. 3. 7/ ( )/ THE CIT(A)- 4. 7/ CIT 5. 89./ , . . . , / DR, ITAT, MUMBAI 6. 9:;<= / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI