TORRENT PETROCHEM LTD( PRESENTLY KNOWN AS BLUE CROSS ROAD SOLUTIONS LTD.), MUMBAI V. DY CIT TRANSFER PRICING 4 (2)(2), MUMBAI

ITA 7373/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6202 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2015-2016
• Appeal Filed On: 02-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Bogus
• Section: 143(1); 20

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI C. N. PRASAD, JM & SHRI S . RIFAUR RAHMAN, AM ./ I.T.A. NO . 7373 / MUM/ 2019 ( / ASSESSMENT YEAR: 2009 - 10 ) M/S ROHIT RUBBER CORPORATION, 404 - A, 3 RD FLOOR, WAGHWADI, KALBADEVI ROAD, KALBADEVI, MUMBAI - 400 002 / VS. JCIT RANGE 18(3) AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 . ./ ./ PAN NO. AA AFR 8087 N ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : SHRI KIRAN UNAVEKAR, DR / DATE OF HEARING : 26 .02.2020 / DATE OF PRONOUNCEMENT : 20.05.2020 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 53 IN SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 14 .12 .18 FOR A SSESSMENT YEAR (IN SHORT A Y ) 2009 - 10 . 2 I.T.A. NO. 7373 /MUM/201 8 RO HIT RUBBER CORPORATION 2. AT THE OUTSET, IT IS NOTICED THAT NO NE APPEARED ON BEHALF OF A SSESSEE 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 T HE L D. DR AND THE MATERIAL PLACED ON RECORD. 3 . THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME ON 29.09.2009 DECLARING TOTAL INCOME OF RS. 12,29,624 / - . THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, I NFORMATION WAS RECEIVED FROM THE SALES TAX D EPARTMENT THAT ASSESSEE HAS IN DULGED IN BOGUS PURCHASES. THE ASSESSMENT WAS ACCORDINGLY REOPENED. THE ASSESSING OFF ICER IN THIS CASE HAS MADE ADDITION @ 12.5% ON ACCOUNT OF B OGUS PURCHASE AMOUNTING TO RS. 9,47,000/ - WHICH ARRI VES TO RS. 1,18,375/ - . 4 . AGGRIEVED BY THE ABOVE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) CONFIRMED THE ADDITION MADE BY AO AND DISMISSED THE APPEAL OF THE ASSESSEE. 3 I.T.A. NO. 7373 /MUM/201 8 RO HIT RUBBER CORPORATION 5 . NOW BEFORE US, THE ASSESSEE HAS PREFERRED APPEAL BY RAI SING THE GROUNDS OF APPEAL AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) WAS NOT JUSTIFIED IN TREATING PURCHASES OF RS.9,47,000/ - AS BOGUS PURCHASES AND IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN ADDING AN AMOUNT OF RS. 1,18,375/ - , AT 12 .5 % OF THE ALLEGED BOGUS PURCHASES AS THE GROSS PROFIT ON THE SAME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) WAS NOT JUSTIFIED IN ENDORSING THE LD. AO'S ACTION OF NOT GRANTING CREDIT OF TAX DEDUCTED AT SO URCE OF RS.5,25,653/ - . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) WAS NOT JUSTIFIED IN ENDORSING THE LD. AO'S ACTION OF TAKING THE REGULAR ASSESSMENT TAX AMOUNT AT (NEGATIVE FIGURE) RS.2,89,214/ - IN THE INCOME TAX COMPUTATION FORM ACCOMPANYING THE ASSESSMENT ORDER. YOUR APPELLANT PRAYS FOR GRANTING THE COSTS OF THIS APPEAL. YOUR APPELLANT CRAVES LEAVE TO AMEND, ALTER OR DELETE ANY OF THE ABO VE. 4 I.T.A. NO. 7373 /MUM/201 8 RO HIT RUBBER CORPORATION GROUNDS OR TO ADD ANY FRESH G ROUND(S) EITHER BEFORE OR AT THE TIME OF HEARING. 6 . CONSIDERED THE SUBMISSION OF LD. DR AND MATERIAL PLACED ON RECORD, WE NOTICE FROM THE RECORD THAT LD. CIT(A) HAS SUSTAINED THE ADDITION MADE BY THE AO ON ESTIMATING @ 12.5% OF THE ALLEGED BOGUS PURCHASES OVERLOOKING THAT ASSESSEE HAS ALREADY DECLARED G P RATIO @ 4.87% AS SUBMITTED BY ASSESSEE IN THE STATEMENT OF FACTS. AS PER THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF CIT VRS. SMITH P. SETH (2013) 356 ITR 451 (GUJ) , WE ARE INCLINED TO REMIT THIS MATTER BACK TO THE FILE OF AO TO VERIFY THE G P RATIO DECLARED BY THE ASSESSEE AND THEREAFTER MAKE ADDITION @ 7 .63 % (12.5% - 4.87%) AFTER DEDUCTING THE GP RATIO. ACCORDINGLY, GROUND NO. 1 & 2 ARE ALLOWED FOR STATISTICAL PURPOSES . 7. WITH REGARD TO CARRY FORWARD LOSS SHOWN IN THE INCOME TAX COMPUTATION FORM, WE ARE REMITTING THIS ISSUE TO THE FILE OF AO WITH DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE AND CO NSIDER THE PLEA OF THE ASSESSEE AS PER LAW AFTER GIVING PROPER OPPORTUNITY OF 5 I.T.A. NO. 7373 /MUM/201 8 RO HIT RUBBER CORPORATION BEING HEARD. ACCORDINGLY, GROUND NO. 3 RAISED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 8 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY 2020 . SD/ - SD/ - ( C. N. PRASAD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 20 . 05 .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