ANAND FABRICATORS P.LTD, MUMBAI V. ITO 9(1)(3), MUMBAI

ITA 7559/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8977 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 7559 / MUM/20 16 ( ASSESSMENT YEAR : 2009 - 10 ) M/S.ANAND FABRICATORS PVT. LTD B - 4, NANDJYOT INDUSTRIAL ESTATE, SAFED POOL, ANDHERI KURLA ROAD SAKINAKA, ANDHERI (E) MUMBAI 72 VS. ITO 9 (1)(3), MUMBAI PAN/GIR NO. AAACA1047Q APPELLANT ) .. RESPONDENT ) ASSESSEE BY NONE REVENUE BY MS.N. HEMALATHA DATE OF HEARING 26 / 10 /201 7 DATE OF PRONOUNCEME NT 27 / 10 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 16, MUMBAI DATED 14/10/2016 FOR A.Y.2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. IN THIS APPEAL, ASSESSEE IS AGG RIEVED FOR UPHOLDING ADDITION OF 12.5% OF BOGUS PURCHASES. 3. NOBODY APPEARED ON BEHALF OF ASSESSEE NOR ANY ADJOURNMENT PETITION WAS FILED. THE BENCH THEREFORE, DECIDED TO DISPOSE THE APPEAL AFTER HEARING LEARNED DR AND CONSIDERING THE MATERIAL PLACED ON R ECORD. 4. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR A.Y. 2009 - 10 ON ITA NO. 7559/MUM/2016 M/S.ANAND FABRICATORS PVT.LTD., 2 25/09/2009 DECLARING TOTAL INCOME OF RS.22,34,310/ - .THEREAFTER, ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX (VAT) DEPARTMENT, STATE OF MAHARASHTRA THE CASE WAS RE - OPENED U/S.147 OF THE IT ACT AND AN ORDER U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 WAS PASSED ON 28/03/2015 ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.35,09,120/ - BY DISALLOWIN G RS.12,07,795/ - AS BOGUS PURCHASES, RS.18,104/ - U/S.14A AND RS.48,906/ - AS 10% OF VARIOUS EXPENSES. 5. THE LEARNED AO IN THIS CASE HAS HELD THAT THE PARTIES FROM WHOM THE PURCHASES WERE MADE BY THE ASSESSEE WERE FOUND TO BE BOGUS AND THAT IS THE REASON FO R WHICH IT WAS NOT PRODUCED DURING THE ASSESSMENT PROCEEDINGS. 6. BY THE IMPUGNED ORDER CIT(A) REDUCED THE ADDITION TO THE EXTENT OF 12.5% AFTER OBSERVING AS UNDER: - NOT HAVING DOUBTED THE CONSUMPTION / SALES, THE MOTIVE BEHIND OBTAINING BOGUS BILLS THUS, APPEARS TO BE INFLATION OF PURCHASE PRICE SO AS TO SUPPRESS TRUE PROFITS. CONSIDERING THE FACTS OF THE CASE AS WELL AS THE VARIOUS CASE LAWS CITED (SUPRA), I ESTIMATE THE SUPPRESSED PROFIT TO THE EXTENT OF 12.5% OF THE PURCHASES MADE FROM THE BOGUS ENTITIE S, AS THE SUPPRESSED PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. THIS ESTIMATION IS IN ADDITION TO THE GP SHOWN BY THE APPELLANT. ACCORDINGLY, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 7. FROM THE RECORD, I FOUND THAT DURING THE YEAR UNDER CONSIDERATION, A SSESSEE HAD SHOWN GP OF 28.34%. HOWEVER, GP SHOWN IN THE EARLIER YEAR WAS 20.78%, THEREFORE, KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, I DIRECT THE AO TO RESTRICT THE ADDITION TO THE ITA NO. 7559/MUM/2016 M/S.ANAND FABRICATORS PVT.LTD., 3 EXTENT ON ACCOUNT OF BOGUS PURCHASE TO THE EXT ENT OF 10%. I DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 27 / 10 /2017 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 27 / 10 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//