ITO-27(2)(1), MUMBAI V. KRUPA SCIENTIFIC &AAPPL. CO., MUMBAI

ITA 7513/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7404 (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: 2010-2011
• 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. 7513 /M UM /20 18 ASSESSMENT YEAR: 2010 - 11 ITO - 27(2)(1), MUMBAI VS. KRUPA SCIENTIFIC & AAPPL CO. 113/115, SHIVAM INDUSTRIAL ESTATE, GOVANDI, MUMBAI, PIN - 400088. PAN: AAAFK1899H (APPELLANT) (RESPONDENT) PRESENT FOR: APPELLANT BY : R. BHOOPATI, CIT - DR RESPONDENT BY : NONE DATE OF HEARING : 07 .01.202 0 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 2010 - 11. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN GROUNDS OF APPEAL IS AGAINST THE DELETION OF ADDITION BY CIT(A) TO THE TUNE OF RS. 1,00,555/ - BEING 12.50 BOGUS PURCHASES AS AGAINST 100% BY THE AO . KRUPA SCIENTIFIC & AAPPL CO. ITA NO.7513/MUM/2018 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 SERVI CE OF NOTICE THROUGH RPAD . T HEREFORE, WE ARE PROCEEDING TO DECIDE THIS APPEAL ON MERITS AFTER HEAR ING THE LD. DR. 4 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 30.09.2010 DECLARING TOTAL INCOME OF RS.3,43,670/ - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER THE AO RECEIVED INFORMATION FROM DGIT (INV.), MUMBAI THAT TH E ASSESSEE IS BENEFICIARY OF HAWALA PURCH ASE ENTRIES TO THE TUNE OF RS.1,14,92 0/ - AND ACCORDINGLY REASONS WERE RECORDED AND NOTICE U/S 148 WAS ISSUED . THE AO ISSUED SHOW - CAUSE NOTICE TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASE S FAILING WHI C H 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 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. LA MEDICA 117 TAXMAN 628 (2001 ) APPLIED THE RATE OF 100 % ON THE SAID BOGUS PURCH ASES BY MAKING AN ADDITION OF RS.1,14,920/ - BY FRAMING A SSESSMENT 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 PARTLY SUSTAINING THE ADDITION @12.5% ON THE BOGUS PURCHASES A FTER TAKING INTO ACCOUNT THE CONTENTIONS AND SUBMISSIONS MADE BY THE ASSESSEE DURING THE COURSE OF APPELLATE 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 KRUPA SCIENTIFIC & AAPPL CO. ITA NO.7513/MUM/2018 3 AND IN THE C ASE 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 PURCHASES ENTRIES TO THE TUNE OF RS.1,14,920/ - . THOUGH THE ASSESSEE HAS TRIED TO SUBSTANTIATE AND PROVE THE GENUINENESS OF THE PURCHASES YET THE AO SOUGHT TO ASSESS THE SAID ENTIRE BOGUS PURCHASES TO TAX ON THE GROUND THAT THESE PURCHASES ARE FROM HAWALA DEALER WHO WE RE ENGAGED IN IS SUING BOGUS PURCHASE BILLS WITHOUT DOING ANY BUSINESS AND AND CONSEQUENTLY APPLIED ADDED THE ENTIRE BOGUS PURCHASES THEREBY MAKING AN ADDITION OF RS. RS.1,14,920/ - THOUGH NOT DOUBTING THE GENUINENESS OF THE SALES . T HE LD. CIT(A ) REDUCED THE SAID ADDITION TO 14 , 365 / - BY APPLYING 12.5% BOGUS PURCHASES BOGUS PURCHASES BY FOLLOWING THE DECISION OF CIT VS. SIMIT P. SHETH AND M/S BHOLANATH POLY FAB. P. LTD WHICH APPEARS TO BE CORRECT AND REASONABLE . 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 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. KRUPA SCIENTIFIC & AAPPL CO. ITA NO.7513/MUM/2018 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.