ITO-27(2)(5), MUMBAI V. PARESH P. PARESH, MUMBAI

ITA 7512/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7406 (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.7512 /M UM /20 18 ASSESSMENT YEAR: 2009 - 10 ITO - 27(2)(5), MUMBAI VS. PARESH P. PAREKH FLAT NO.1 06, SOMNATH CHS LTD. NEELKANTH VALLEY, 7 TH ROAD, GHATKOPAR, MUMBAI, PIN - 400077. PAN: AABPP4458L (APPELLANT) (RESPONDENT) PRESENT FOR: APPELLANT BY :R. BHOOPATHI, CIT 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 APPE AL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 17.10.2017 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 GROUNDS OF APPEAL IS AGAINST THE ORDER OF LD. CIT(A) DELETING THE ADDITION TO THE EXTENT OF ITA NO.7512/MUM/2018 PARESH P. PAREKH 2 RS. 2,88,570 / - BEING 12.50% THE BOGUS PURC HASES AS AGAINST 100% ADDITION BY THE AO. 3. AT THE TIME OF HEARING NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED FOR ATTENDING THE HEARING NO R ANY ADJOURNMENT APP LICATION WAS RECEIVED DESPITE SERVI CE OF NOTICE THROUGH RPAD . T HEREFORE, WE ARE PROCEEDING TO DE CIDE THIS APPEAL ON MERITS AFTER HEARING THE LD. DR. 4 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 25 .09.2009 DECLARING TOTAL INCOME OF RS. 3,36,73 0/ - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER THE AO REOPENED THE CAS E OF THE ASSESSEE AFTER RECEIV ING INFORMATION FROM DGIT (INV.), MUMBAI THAT THE ASSESSEE IS BENEFICIARY OF HAWALA PURCHASE ENTRIES TO THE TUNE OF RS.3,29,794 / - AND BY ISSUING A NOTICE U/S 148 DATED 30 .03.2014 REOPENED THE ASSESSMENT . THE AO ISSUED SHOW - CAU SE NOTICE TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASE, FAILING WHICH WHY THE SAME SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. A CCORDINGLY THE ASSESSEE FILED COP IES OF BILLS, VOUCHERS AND OTHER EVIDENCES TO PROVE THE GENUINENESS OF THE PURCHASES. HOWEVER THE REPLY OF THE ASSESSEE 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. L A MEDICA 117 TAXMAN 628 (2001) ADDED 100% ON THE SAID BOGUS PURCHASES BY FRAMING ASSESSMENT U/S 143(3) R.W.S. 147. 5 . IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) P ARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY PARTLY SUSTAINING THE ADDITION @12.5% OF THE B OGUS PURCHASES AFTER TAKING INTO ACCOUNT THE CONTENTIONS AND SUBMISSIONS MADE BY THE ASSESSEE DURING THE COURSE OF APPELLATE ITA NO.7512/MUM/2018 PARESH P. PAREKH 3 PROCEEDINGS AND BY FOLLOWING THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REPORTED IN 356 ITR 451 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 HAWALA PURCHASE ENTR IES TO THE TUNE OF RS.3,29,794/ - . THOUGH THE ASSESSEE HAS TRIED TO SUBSTANTIATE AND PROVE THE GENUINENESS OF THE PURCHASES YET THE AO SOUGHT TO ASSESS THE THE SAID BOGUS PURCHASES AT 100% ON THE GROUND THAT THESE PURCHASES ARE FROM HAWALA DEALER WHO WE RE E NGAGED IN ISSUING BOGUS PURCHASE BILLS ONLY WITHOUT DOING ANY BUSINESS. THE AO HOWEVER DID NOT DOUB T THE GENUINENESS OF THE SALES . T HE LD. CIT(A) REDUCED THE SAID ADDITION TO RS.41,224/ - BY APPLYING 12.5% BOGUS PURCHASES BY FOLLOWING THE DECISION 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 S OF THE VARIOUS HIGH COURTS AND TRIBUN ALS 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.7512/MUM/2018 PARESH P. PAREKH 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI T HE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.