AKSHAET ENGINEERING & CONSTRUCTION SERVICES P.LTD, MUMBAI V. ITO 9(1)(2), MUMBAI

ITA 7197/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8496 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITRA
• Keywords: Bogus purchase
• Section: 69C; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 7197 / MUM/20 16 ( ASSESSMENT YEAR : 2009 - 10 ) M/S. AKSHAET ENGINEERING & CONSTRUCTION SERVICES PVT.LTD., 204, INDO SAIGON INDL. ESTATE MAROL NAKA, ANDHERI (E) MU MBAI 400 059 VS. ITO 9(1)(2) PAN/GIR NO. AABCA2082Q APPELLANT ) .. RESPONDENT ) ASSESSEE BY NONE REVENUE BY SHRI S.K. MITRA DATE OF HEARING 07 / 09 /201 7 DATE OF PRONOUNCEME NT 15 / 11 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 16, MUMBAI DATED 20/09/2016 FOR A.Y.2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE ITACT. 2.THE FOLLOWING GROUNDS HAVE BEEN T AKEN BY THE ASSESSEE: - 1. THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEAL 16 ) HAS ERRED IN UPHOLDING AND RETAINING THE ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASES TO RS. 452579 BEING 12.5% OF THE AMOUNT OF ALLEGED BOGUS PURCHASE OF RS. 3620629. 2 . THE APPELLANT PRAYS THAT RETAINED ADDITIONS OF RS. 452579 (BEING 12.5% OF THE ALLEGED BOGUS PURCHASES) MAY PLEASE BE DELETED. 3. THE APPELLANT CRAVES THE LEAVE TO ADD, DELETE, CHANGE, ALTER OR AMEND ANY OF THE ABOVE GROUNDS OF APPEAL ON OR BEFORE TH E TIME OF HEARING. ITA NO. 7197/MUM/20 16 M/S. AKSHAET ENGINEERING & CONSTRUCTION 2 3. NOBODY APPEARED ON BEHALF OF THE ASSESSEE INSTEAD OF GIVING OPPORTUNITY. THE BENCH THEREFORE, DECIDED TO DISPOSE THE APPEAL AFTER HEARING LEARNED DR AND CONSIDERING THE MATERIAL PLACED ON RECORD. 4. THE BRIEF FACTS OF THE CASE ARE T HAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR A.Y.2009 - 10 ON 17/04/2015 DECLARING TOTAL INCOME AT RS.11,64,305/ - . THEREAFTER , ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX (VAT) DEPARTMENT, STATE OF MAHARASHTRA THE CASE WAS RE - OPENED U/S.14 7 OF THE I.T. ACT AND AN ORDER U/S.143(3) R.W.S.147 OF THE INCOME TAX ACT,1961 WAS PASSED ON 27/03/2015 ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.48,56,120/ - WHEREBY THE PURCHASES FOR AN AMOUNT OF RS.36,20,629/ - WERE DISALLOWED U/S 68 & 69C OF THE ACT AND ADDITION OF RS.71,182/ - WAS MADE U/S.37(1). 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ADDITION OF RS.71 ,182/ - MADE U/S.37(1). HOWEVER, IN RESPECT OF BOGUS PURCHASES, HE RESTRICTED THE ADDITION TO 12.5% AFTER HAVING FOLLOWING OBSERVATION: - NOT HAVING DOUBTED THE CONSUMPTION/SALES, THE MOTIVE BEHIND OBTAINING BOGUS BILLS THUS, APPEARS TO BE INFLATION OF PURCHASE PRICE SO AS TO SUPPRESS TRUE PROFITS CONSIDERING THE FACTS OF THE CASE AS WELL AS THE VARIOUS CASE LAWS CITED (SUPRA), I ESTIMATE THE SUPPRESSED PROFIT TO THE EXTENT OF 12.5% OF THE PURCHASES MADE FROM THE BOGUS ENTITIES, AS THE SUPPRESSED PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. THIS ESTIMATION IS IN ADDITION TO THE GP SHOWN BY THE APPELLANT. ACCORDINGLY, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 6. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT ASSESSEE IS ENGAGED IN FABRICATION, ENGINEERING AND TRADING IN ALUMINIUM PRODUCTS. THE CONSUMPTION / SALES OF THE ALLEGED GOODS SO PU RCHASED FROM BOGUS SUPPLIERS WERE NOT DOUBTED . CONSIDERING THE GP RATE OFFERED ITA NO. 7197/MUM/20 16 M/S. AKSHAET ENGINEERING & CONSTRUCTION 3 BY THE ASSESSEE VIS - - VIS VOLUME OF BUSINESS IT WAS CARRIED ON, I DIRECT THE AO TO RESTRICT THE ADDITION TO THE EXTENT OF 10% OF PURCHASE. I DIRECT ACCORDINGLY. 7. IN THE RESULT, APPEAL IS ALLOW ED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 11 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 11 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//