ACIT 27(2), MUMBAI V. KALPESH P. PUJARA, MUMBAI

ITA 7111/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4045 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 10-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DROP SINGH MEENA
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 147; 69

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY , JM & SHRI S. RIFAUR RAHMAN, AM ./ I.T.A. NO . 7111 / MUM/ 2018 ( / ASSESSMENT YEAR: 2009 - 10 ) ACIT 27 (2) ROOM NO. 420 , 4 TH FLOOR, TOWER NO. 6, VASHI RAILWAY STATION COMPLEX, NAVI MUMBAI - 400 703 / VS. KALPESH P. PUJARA, 3/4/61, KALPTRU AURA PHASE - II, PEAL BUILDING, OPP - R. CITY MALL, LBS MARG, GHATKOPAR(W), MUMBAI 400 086 ./ ./ PAN NO. ACWPP 8054 D ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI DROP SINGH MEENA , DR / RESPONDENTBY : NONE / DATE OF HEARING : 04 .02 .2020 / DATE OF PRONOUNCEMENT : 19.02.2020 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) 26 IN SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 27.09 .18 FOR A SSESSMENT YEAR (IN SHORT A Y ) 2009 - 10 . 2 I.T.A. NO 7111 /MUM/201 8 KALPESH P. PUJARA 2. AT THE OUTSET, IT IS NOTICED THAT NO NE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. ON THE OTHER HAND, L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE , WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. T HE BRIEF FACTS OF THE C ASE ARE , BASED ON THE INFORMATION RECEIVED FROM THE DGIT(INV) AND MAHARASHTRA SALES TAX DEPAR TMENT ABOUT THE ACCOMMODATION ENTRIES OBTAINED BY THE ASSESSEE . ACCORDINGLY, ASSESSMENT WAS REOPENED U/S 147 OF THE ACT AND SUBSEQUENTLY ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S 147 OF THE ACT BY THE AO. AO MADE 100% ADDITION OF THE BOGUS PURCHASES U/S 69 C OF THE ACT. 4 . AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND BASED ON THE SUBMISSION OF ASSESSEE, LD. CIT(A) AGREED WITH THE AO THAT THIS PURCHASES WERE NOT GENUINE AND DOES NOT MEAN THAT PURCHASES MADE FROM THESE PARTIES ARE GENUINE. THE COURTS HAVE HELD THAT PAYMENT MADE BY CHEQUE ITSELF IS NOT SACROSANCT SO AS TO PROVE THE GENUINENESS OF THE 3 I.T.A. NO 7111 /MUM/201 8 KALPESH P. PUJARA PURCHASES WHEN THE SURROUNDING CIRCUMSTANCES ARE SUSPECT. HOWEVER, THE ASSESSEE HAS SHOWN ONWARDS SALES WHICH HAS NOT BEEN DOUBTED BY THE AO. BY RELYING ON THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF CIT VRS. SMITH P. SHETH 356 ITR 451 (GUJ), HE REDUCED THE DIS ALLOWANCE @ 12.5 %. ACCORDINGLY, LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEV ED WITH THE ABOVE ORDER, REVENUE HAS PREFERRED THE APPEAL BEFORE US ON THE GROUND MENTIONED HEREIN BELOW: - 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS 6,60,569/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS PURCHASES, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO PRODUCE BIL LS, VOUCHERS AND OTHER DOCUMENTARY EVIDENCES IN SUPPORT OF ITS CLAIM AND WITHOUT CONSIDERING THE LATEST APEX COURT DECISION IN THE CASE OF N.K. PROTEIN LTD. WHEREIN IT IS HELD THAT ONCE IT IS PROVED THAT THE PURCHASES ARE BOGUS THEN ADDITION SHOULD BE MADE ON ENTIRE PURCHASES AND NOT ON PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES.' 4 I.T.A. NO 7111 /MUM/201 8 KALPESH P. PUJARA 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ESTIMATING THE PROFIT FROM HAWALA PURCHASES BY DISALLOWING ONLY RS. 94,367/ - , BEING 12.5% OF THE BOG US PURCHASES AS EVEN THE BASIC ONUS OF PRODUCING TRANSPORT DETAILS, DELIVERY CHALLANS ETC. WERE NOT FULFILLED BY THE ASSESSEE.' 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE REST ORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 6 . CONSIDERED THE SUBMISSION OF LD. DR AND MATERIAL PLACED ON RECORD. WE ARE OF THE CONSIDERED VIEW THAT NO DOUBT THE PURCHASES MADE FROM THE SUSPECTED PARTIES ARE NOT GENUINE. HOWEVER, THE PURCHASES ITSELF CANNOT BE DOUBTED AS RIGHTLY ADJUDICATED BY LD. CIT(A) THAT AO HAS NOT DOUBTED SALES DECLARED BY THE ASSESSEE, ONLY HE SUSPECTS THE PURCHASES. BY RESPECTFULLY FOLLOWING THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF CIT VRS. SMITH P. SHETH (SUPRA), WE ARE INCLINED TO AGREE WITH THE FINDINGS OF LD. CIT(A). THEREFORE, GROUND S RAISED BY THE REVENUE ARE DISMISSED. 5 I.T.A. NO 7111 /MUM/201 8 KALPESH P. PUJARA 7 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STA NDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH FEB , 2020 . SD/ - SD/ - ( VIKAS AWASTHY ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 19 . 02 .2020 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI