ITO 22 (2)(4), MUMBAI V. NAGIN G. SUTHAR, MUMBAI

ITA 7296/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3041 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 13

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI C. N. PRASAD , J M & SHRI S. RIFAUR RAHMAN, AM ./ I.T.A. NO . 7296 TO 7300 / MUM/ 2018 ( / ASSESSMENT YEAR: 2008 - 09 TO 2012 - 13 ) ITO 22(2)(4), 310, 3 RD FLOOR, PIRAMAL CHAMBERS, LAL BAUG, PAREL, MUMBAI - 400 012 / VS. SHRI NAGIN G. SUTHAR, ROOM NO. 2, PIPWALA CHAWL, PRABHAT COLONY, NEXT TO YOGA CENTRE, SANTACRUZ EAST, MUMBAI - 400 055 ./ ./ PAN NO. A IGPM 3819 F ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI KIRAN UNAVEKAR, DR / RESPONDENTBY : SHRI BHUPENDRA SHAH, AR / DATE OF HEARING : 26.02 .2020 / DATE OF PRONOUNCEMENT : 06.03.2020 / O R D E R PER BENCH : THE PRESENT FIVE (5) A PPEAL S HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 3 4 , MUMBAI, D ATED 07.09 .18 FOR AY 200 8 - 0 9 TO 2012 - 1 3 RESPECTIVELY . 2 I.T.A. NO. 7296 TO 7300 /MUM/201 8 SHRI NAGIN G. SUTHAR, 2 . SINC E THE ISSUES RAISED IN THESE APPEALS ARE IDENTICAL, THEREFORE, FOR TH E SAKE OF CONVENIENCE, THESE APPEALS ARE CLUBBED, HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDE R. FIR STLY, WE ARE TAKING ITA NO. 7296/ MUM/2018 FOR AY 200 8 - 0 9 FILED BY THE REVENUE . 3. THE BRIEF FACTS OF THE CASE ARE, DURING ASSESSMENT PROCEEDING, AO OBSERVED THAT ASSESSEE HAS CLAIMED A SUM OF RS. 74,33,239/ - AS PURCHASES DURING THE YEAR. AO FURTHER OBSERVED THAT ASSESSEE HAS MADE PURCHASES FROM THE FOLLOWING NON - GENUINE PARTIES AS PER THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTME NT, WHICH IS AS UNDER: - S.NO. TIN NAME PAN AMOUNT (RS.) 1. 27300350341V SHAKTI TRADING CO. AIOPG8087B 9,60,119 2. 27400628967V GLOBAL TRADE IMPEX AMRPB2286L 1,34,803 3. 27330137458V CHIRAG CORPORATION AAHPM6402D 4,82,383 4. 27540501626V MAHAVIR CORPORATION AIIPR7361K 1,01,312 5. 27060224373V CORAL TRADING CO. APPMC3411V 12,60,813 6. 27580171804V SHREE YAMUNA IMPEX AAEPM8551G 7,14,859 TOTAL 36,54,289 4. FURTHER ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THE TRANSACTIONS BY SUBMITTING RELEVANT DOCUMENTS BEFORE THE AO. 3 I.T.A. NO. 7296 TO 7300 /MUM/201 8 SHRI NAGIN G. SUTHAR, SINCE THE AO HAS NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE, AO DISALLOWED THE ABOVE SAID NON - GENUINE PURCHASES AND DISALLOWED 1 00% OF THE PURCHASES MADE FROM M/S CHIRAG CORPORATION AND SHREE YAMUNA IMPEX TO THE EXTENT OF RS. 11,97,242/ - AND WITH REGARD TO OTHER SUPPLIERS, AO DISALLOWED 25% OF THE PURCHASES AS NON - GENUINE. 5 . AGGRIEVED BY THE ABOVE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE SUBMISSI ON OF ASSESSEE AND REFERRING TO VARIOUS CASE LAW, RESTRICTED THE DISALLOWED TO 12.5% OF THE NON - GENUINE PURCHASES CONSIDERING THE FACT THAT AO HAS NOT DOUBTED THE SALES, THEREFORE ASSESS EE MIGHT HAVE SOME BENEFIT BY PURCHASING THE ABOVE FROM GREY MARKET. 6 . NOW BEFORE US, THE REVENUE HAS PREFE RRED APPEAL BY RAISING THE GROUNDS OF APPEAL AS UNDER: - 11. 'ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND LAW, THE LD. CIT(A) HAS ERRED IN GRANTING RELIEF OF RS.13,54,718/ - BY RESTRICTING THE ADDITION TO 12.05% OF ALLEGED BOGUS PURCHASE.'. 4 I.T.A. NO. 7296 TO 7300 /MUM/201 8 SHRI NAGIN G. SUTHAR, 12. 'ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT ONUS IS ON THE ASSESSEE TO EXPLAIN AND SUB STANTIATE THE GENUINENESS AND TRUE OF THE TRANSACTION.' 13. THE APPELLANT PRAYS THAT APPEAL IS BEING FILED BECAUSE IT COVERED UNDER EXCEPTION PROVIDED IN THE PARA 10(E) OF THE AMENDED INSTRUCTION NO. 3 OF 2018 DATED 20.08.2018. 14. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A), ON THE ABOVE GROUND TO BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 15. THE APPELLANT CRAVES TO LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 7 . WE HAVE HEARD COUNSELS FOR BOTH THE PA RTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE NOTICE FROM THE RECORD THAT AO HAS DISALLOWED 100% OF THE PURCHASES MADE FROM M/S CHIRAG CORPORATION AND SHREE YAMUNA IMPEX AND FOR THE OTHER PARTIES, HE HAS DISALLOWED 25% OF THE PURCHASES AS NON - GENUINE. WE NOTICE THAT LD. CIT(A) OBSERVED THAT AO HAS DOUBTED ONLY THE PURCHASES MADE BY THE ASSESSEE FROM T HE NON - GENUINE SUPPLIERS, WHEREAS ASSESSEE HAS DECLARED CORRESPONDING SALES, THEREFORE 5 I.T.A. NO. 7296 TO 7300 /MUM/201 8 SHRI NAGIN G. SUTHAR, ASSESSEE MUST HAVE UTILIZED THE PURCHASES IN ITS TRADING AND ASSESSEE MUST HAVE MADE SOME PURCHASES FROM GREY MARKET AND INDULGED IN MAKING SOME PROFIT. THEREFORE, LD. C IT(A) HAS RESTRICTED THE DISALLOWANCE @ 12.5% OF THE NON - GENUINE PURCHASES BY RELYING ON VARIOUS DECISION OF HONBLE HIGH COURT AND COORDINATE BENCHES OF ITAT. THEREFORE, THIS IS IN LINE WITH THE CONSISTENT VIEW OF THE COORDINATE BENCHES, WE ARE INCLINED T O ACCEPT THE FINDINGS OF LD. CIT(A) AND ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED . 8 . SINCE THE FACTS IN OTHER APPEAL S FILED BY THE REVENUE ARE SIMILAR TO THE FACTS O F ABOVE APPEAL I.E. ITA NO. 7296 /MUM/2018, THERE FORE, THE GROUNDS RAIS ED IN THESE APPEAL S ARE ALSO DISMISSED. 9 . IN THE NET RESULT, ALL THE APPEAL FILED BY THE REVENUE STA NDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MARCH 2020 . SD/ - SD/ - (C. N. PRASAD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 06 . 03 .2020 SR.PS. DHANANJAY 6 I.T.A. NO. 7296 TO 7300 /MUM/201 8 SHRI NAGIN G. SUTHAR, / 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 FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI