ITO 26 (2)(3), MUMBAI V. NALIN OMPRAKASH PAHUJA, MUMBAI

ITA 7053/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0632 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA
• Assessee Lawyers: PRAMOD A RASAM
• Keywords: Bogus purchase
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & . ,#$#% SHRI G.MANJUNATHA, ACCOUNTANT MEMBER . 7053 / /2018(. . 2010-11 ) ITA NO.7053/MUM/2018(A.Y.2010-11) ITO -26(2)(3) BUILDING NO.C-11, 7 TH FLOOR, ROOM NO.709, PRAYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E) MUMBAI 400 051 ...... - / APPELLANT VS. SHRI NALIN OMPRAKASH PAHUJA, PROP. OF M/S. SHAKTI INTERNATIONAL, 6, PAHUJA INDUSTRIAL ESTATE, SAKI NAKA, MUMBAI 400 072 PAN:AGEPP 4217E ..... .// RESPONDENT -0/ APPELLANT BY : MS. R.KAVITHA ./0/ RESPONDENT BY : SHRI PRAMOD A. RASAM 1/ / DATE OF HEARING : 17/02/2020 234 1/ / DATE OF PRONOUNCEMENT : 20 /03/2020 #/ ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-38 MUMBAI (IN SHORT THE CIT(A)) DATED 04/06/2018 FOR THE ASSESSMENT YEAR 2010-11. 2 ITA NO.7053/MUM/2018(A.Y.2010-11) 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORD ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING ENGINEE RING GOODS AND IS 100% EXPORT ORIENTED UNIT. THE ASSESSMENT FOR ASSESSMEN T YEAR 2009-10 WAS RE- OPENED BY THE ASSESSING OFFICER ON THE GROUND THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.34,86,460/- FROM THE DECLARED HAWALA DEALERS. THE ASSESSING OFFICER MADE DISALLOWANCE O F 25% OF THE ALLEGED NON- GENUINE PURCHASES I.E. RS.8,71,615/-. AGGRIEVED AG AINST THE ASSESSMENT ORDER DATED 04/03/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ), THE ASSESSEE FILE D APPEAL BEFORE THE CIT(A). THE FIRST APPELLATE AUTHORITY, AFTER EXAMINING THE FAC TS AND DOCUMENTS ON RECORD GRANTED PART RELIEF TO THE ASSESSEE BY RESTRICTING THE DISALLOWANCE TO 12.5% OF THE ALLEGED BOGUS PURCHASES. AGAINST THE AFORESA ID FINDINGS OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. MS. R. KAVITHA, REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE ASSESSING OFFICER IN A VERY FAIR AND JUSTIFIED MANN ER HAD MADE DISALLOWANCE IN RESPECT OF BOGUS PURCHASE BILLS OBTAINED BY THE ASS ESSEE AT 25% OF SUCH BOGUS PURCHASES. THE CIT(A) HAS FURTHER REDUCED THE DISA LLOWANCE TO 12.5% OF THE BOGUS PURCHASES WITHOUT CONSIDERING THE FACT THAT T HE AVERAGE GP OF THE ASSESSEE FOR ASSESSMENT YEARS 2007-08, 2008-09, 201 1-12 AND 2012-13 IS 12.74% AND THE GP DECLARED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR IS 17.17%. THE LD. DEPARTMENTAL REPRESENTATIVE CON TENDED THAT THE GP DETERMINED BY THE ASSESSING OFFICER ON THE BOGUS PU RCHASES AT 25% IS FAIR AND JUSTIFIED. 4. ON THE OTHER HAND, SHRI PRAMOD A. RASAM, APP EARING ON BEHALF OF THE ASSESSEE VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF THE REVENUE. THE LD. AUTHORIZED REPR ESENTATIVE FOR THE ASSESSEE 3 ITA NO.7053/MUM/2018(A.Y.2010-11) SUBMITTED THAT THE CIT(A) HAD ESTIMATED GP AT 12.5% ON ALLEGED BOGUS PURCHASES AFTER CONSIDERING ALL THE FACTS INCLUDING THE AVERAGE GP OF THE ASSESSEE IN THE PAST AND THE SUBSEQUENT ASSESSMENT YEARS, AS WELL AS THE GP DECLARED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PRAYED FOR UPHOLDIN G THE IMPUGNED ORDER AND DISMISSING THE APPEAL OF REVENUE. 5. WE HAVE HEARD THE RIVAL SIDES AND HAVE PERUSED T HE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE HAS ALLEGEDLY OBTAINED BOGUS P URCHASE BILLS AGGREGATING TO RS.34,86,460/-. THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF 25% ON THE AGGREGATE ALLEGED BOGUS PURCHASES. ON APPEAL, TH E CIT(A) HAS REDUCED THE DISALLOWANCE ON THE ALLEGED BOGUS PURCHASES TO 12.5 %. WE HAVE OBSERVED THAT AVERAGE OF GP AS DECLARED BY THE ASSESSEE IN ASSES SMENT YEARS 2007-08, 2008- 09, 2011-12 AND 2012-13 IS 12.74%. THE GP DECLARED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR IS 17.17%. THE GP ESTI MATED BY CIT(A) @ 12.5% ON THE ALLEGED BOGUS PURCHASES , IS VERY CLOSE TO THE AVERAGE OF THE GP IN THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, WE FIND NO REASON TO INTERFERE W ITH THE FINDINGS OF CIT(A), HENCE, THE SAME ARE UPHELD AND THE APPEAL OF THE R EVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY T HE20TH DAY OF MARCH, 2020. S D/- SD/- (G.MANJUNATHA) (VIKAS AW ASTHY) #$ / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 6/ DATED 20/03/2020 4 ITA NO.7053/MUM/2018(A.Y.2010-11) 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