ITO-27(2)(5), MUMBAI V. PUSHPABEN C SHAH, MUMBAI

ITA 7511/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7401 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 143(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 7511 /M UM /20 18 ASSESSMENT YEAR: 2009 - 10 ITO - 27(2)(5), MUMBAI VS. PUSHPABEN C SHAH D - 3, SIDDH APURA INDL. ESTATE, LBS MARG, GHATKOPAR WEST, MUMBAI, PIN - 400086. PAN: AAPPS2890B (APPELLANT) (RESPONDENT) PRESENT FOR: APPELLANT BY : SHRI R. BHOOPATI, CIT - DR RESPONDENT BY : NONE DATE OF HEARING : 07 . 01.2020 DATE OF PRONOUNCEMENT : 31 .01 . 20 20 O R D E R PER RAJESH KUMAR , ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 17.10.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009 - 10. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THE VARIOUS GROUNDS OF APPEAL IS AGAINST THE DELETION OF ADDITION BY CIT(A) BY APPLYING A RATE OF 12.50% THE BOGUS PURCHASES AS AGAINST 100% ADDED BY THE AO. ITA NO.7511/MUM/2018 PUSHPABEN C SHAH 2 3 . AT THE TIME OF HEARING NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED FOR ATTENDING THE HEARING NO R ANY ADJOURNMENT APPLICATION WAS RECEIVED DESPITE OF SERVI CE OF NOTICE THROUGH RPAD. T HEREFORE, WE ARE PROCEEDING TO DECIDE THIS APPEAL ON MERITS AFTER HEARING THE LD. DR. 4 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 22.09.2009 DECLARING TOTAL INCOME OF RS.5,25,152/ - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER THE AO RECEIVED INFORMATION FROM DGIT ( INV.), MUMBAI THAT THE ASSESSEE IS BENEFICIARY OF HAWALA PURCHASE ENTRIES TO THE TUNE OF RS.4,74,956/ - AND ACCORDINGLY REASONS WERE RECORDED BY ISSUING A NOTICE U/S 148 DATED 30.03.2014. THE AO ISSUED SHOW - CAUSE NOTICE TO THE ASSESSEE TO PROVE THE GENUINEN ESS OF THE PURCHASE FAILING WHICH WHY THE SAME SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY THE ASSESSEE FILED A COP IES OF BILLS, VOUCHERS AND OTHER EVIDENCES TO PROVE THE GENUINENESS OF THE PURCHASES. HOWEVER THE REPLY OF THE ASSES SEE DID NOT FIND FAVOUR WITH THE AO. T HUS AFTER RELYING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KORLAY TRADING CO. LTD. 232 ITR 820) AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. LA MEDICA 117 TAXMAN 628 (2001) ADDED 100% BO GUS PURCHASES TO THE INCOME OF THE ASSESSEE BY MAKING AN ADDITION OF RS.4,74,956/ - BY FRAMING ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT . 5 . IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ADDITION @12.5% ON THE BOGUS PURCHASES AFTER TAKING INTO ACCOUNT THE CONTENTIONS AND SUBMISSIONS MADE BY THE ASSESSEE DURING THE COURSE OF APP ELLATE PROCEEDINGS AND BY FOLLOWING THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REPO RTED IN 356 ITR 451 ITA NO.7511/MUM/2018 PUSHPABEN C SHAH 3 AND IN THE CASE OF M/S BHOLANATH POLY FAB. P. LTD. REPORTED IN 355 ITR 290. 6 . AFTER HEARING THE LD. DR AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THE UNDISPUTED FACTS ARE THAT THE ASSESSEE W AS BENEFICIARY OF HAWA LA PURCHASE ENTRIES TO THE TUNE OF RS. 4,74,956/ - . THOUGH THE ASSESSEE HAS TRIED TO SUBSTANTIATE AND PROVE THE GENUINENESS OF THE PURCHASES YET THE AO SOUGHT TO ASSESS THE SAID BOGUS PURCHASES AT 100% ON THE GROUND THAT THESE PURCHASES ARE FROM HAWALA DEA LER THOSE ARE ENGAGED IN ISSUING BOGUS PURCHASE BILLS RESULTING INTO AN ADDITION OF RS.4,74,956/ - BUT DID NOT DOUBT THE GENUINENESS OF THE SALES . T HE LD. CIT(A) REDUCED THE SAID ADDITION TO 59,369/ - BY APPLYING 12.5% BOGUS PURCHASES BY FOLLOWING THE DECIS ION OF CIT VS. SIMIT P. SHETH AND M/S BHOLANATH POLY FAB. P. LTD WHICH IS REASONABLE AND APPEARS TO BE CORRECT . WE ARE THEREFORE INCLINED TO UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE WHICH IS IN CONSONANCE WITH THE DECISION OF THE VARIOUS HIGH COURT S AND TRIBUNALS BY DISMISSING THE APPEAL OF THE REVENUE. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.01 . 20 20 . SD/ - SD/ - ( SAKTIJIT DEY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 31 .01 . 2020 . RS , SR. P.S. ITA NO.7511/MUM/2018 PUSHPABEN C SHAH 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.