Vinod Bhagwan Patil, Kolhapur V. Pr. Commissioner of Income-tax-2, Kolhapur

ITA 750/PUN/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6620 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.750/PUN/2018 / ASSESSMENT YEAR : 2009-10 VINOD BHAGWAN PATIL, 264E, FLAT NO.404, AKSHAR PLAZA, NEW SHAHUPURI, KOLHAPUR 416 001 PAN : AGFPP6304H VS. PR.CIT-2, KOLHAPUR APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER D ATED 28-03-2018 PASSED BY THE PR. COMMISSIONER OF INCOME-TAX U/S.263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE A CT) IN RELATION TO THE ASSESSMENT YEAR 2009-10. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSIN G OFFICER (AO) RECEIVED INFORMATION FROM THE SALES TAX DEPA RTMENT ABOUT THE ASSESSEE HAVING PROCURED BOGUS BILLS IN THE HAWALA ASSESSEE BY NONE REVENUE BY SHRI DEEPAK GARG DATE OF HEARING 16-09-2020 DATE OF PRONOUNCEMENT 16-09-2020 ITA NO.750/PUN/2018 VINOD BHAGWAN PATIL 2 RACKET. THE ASSESSEE WAS FOUND TO HAVE RECEIVED BILL OF RS.3,10,545/- FROM M/S. UDAY ENTERPRISES. THE AO COMP LETED THE ASSESSMENT BY HOLDING THAT 15% OF PROFIT ON SUCH PURCHASE S WAS LIABLE TO BE TAXED AS ADDITIONAL INCOME WHICH CAME TO RS.46,582 /-. SINCE THE ASSESSEE HAD ALREADY DECLARED GROSS PROFIT @3. 73%, THE AO ADDED ADDITIONAL PROFIT OF RS.34,999/-. THE LD. PR.CI T, EXERCISING HIS REVISIONAL POWER U/S 263 OF THE ACT, HELD TH E ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE, AGAINST WHICH THE ASSESSEE HAS COME UP IN APPEA L BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE LD. DR THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THERE IS NO APPE ARANCE FROM THE SIDES OF THE ASSESSEE DESPITE SEVERAL NOTICES. WE ARE, THEREFORE, PROCEEDING TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE. 4. REVISION U/S 263 OF THE ACT IS CONTEMPLATED WHERE THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF THE REVENUE. IT IS TRITE THAT THE POWER OF REVISION DOES NOT EXTE ND TO A DEBATABLE ISSUE. IN OTHER WORDS, IF TWO POSSIBLE VIEWS EXIST A ND THE ITA NO.750/PUN/2018 VINOD BHAGWAN PATIL 3 AO TAKES ONE OF SUCH POSSIBLE VIEWS IN THE ASSESSMENT ORDE R, THE REVISION IS OUSTED. 5. IT IS SEEN THAT THE LD. PR.CIT HELD THE ASSESSMENT ORDE R TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE G ROUND THAT THE AO IS REQUIRED TO EXAMINE THE FACTUAL MATRIX AND THEN TO DECIDE WHETHER ADDITION OF ENTIRE PURCHASES OR ONLY PROFIT ELEM ENT IS WARRANTED IN THIS CASE . THE VIEW TAKEN BY THE AO IN NOT TAXING 100% BUT ONLY PROFIT ELEMENT IN SUCH HAWALA PURCHASES IS FO RTIFIED BY THE JUDGMENT DATED 11-02-2019 OF HONBLE JURISDICTIONAL HIG H COURT IN PR.CIT VS. MOHOMMAD HAJI ADAM & CO. (IN ITA NO.1004 OF 2016) WHEREIN IT HAS HELD THAT NO AD HOC ADDITION FOR BOGUS PURCHASES CAN BE MADE. RATHER, THE ADDITION SHOULD BE MADE TO THE EXTENT OF DIFFERENCE BETWEEN THE GROSS PROFIT RATE ON GENUINE PURCHASES AND GROSS PROFIT RATE ON HAWALA PURCHASES. S INCE THE AO IN THE INSTANT CASE HAS MADE ADDITION FOR THE ADDITIONAL PROFIT A T THE RATE OF 11.27% TOWARDS BOGUS PURCHASES, WE HOLD THAT THE IMPUGNED ORDER, TREATING SUCH ASSESSMENT ORDER AS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, CANNOT BE VALIDATED. T HE AO HAS TAKEN A VIEW, WHICH CANNOT, BY ANY STANDARD, BE CAT EGORIZED AS A NON-PLAUSIBLE VIEW. WE, THEREFORE, SET-ASIDE THE IMPUGN ED ORDER. ITA NO.750/PUN/2018 VINOD BHAGWAN PATIL 4 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER, 2020. SD/- SD/- (S.S. VISWANETHRA RAVI) (R.S.SY AL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 16 TH SEPTEMBER, 2020 SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE PR.CIT-2, KOLHAPUR 4. 5. THE ACIT, RANGE-2, KOLHAPUR , , / DR B, ITAT, PUNE 6. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.750/PUN/2018 VINOD BHAGWAN PATIL 5 DATE 1. DRAFT DICTATED ON 16-09-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 16-09-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *