SUMIT SUGNOMAL KUKREJA, ULHASNAGAR V. ITO WD 2(4), KALYAN

ITA 757/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0059 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: SUSHAN R KOTIAN
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 757 / MUM/20 1 7 & 758/MUM/2017 ( ASSESSMENT YEAR : 2009 - 10 & 2010 - 11 ) SHRI SUMIT SUGNOMAL KUKREJA, PROP. M.S.PRAVIN CORPORATION, BLOCK NO.C - 5999, R.NO.198, SHIHAM SECTION, SECTOR 25, ULHASNAGAR VS. ITO WD 2(4), KALYAN PAN/GIR NO. ANMPK3396G APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI SUSHAN R KOTIAN REVENUE BY SHRI A.K.KARDAM DATE OF HEARING 09 / 05 /201 7 DATE OF PRONOUNCEME NT 21 / 06 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 3, THANE DATED 23/11/2016 FOR THE A.Y.2009 - 10 AND 2010 - 11 IN THE MATTER OF THE ORDER PASSED U/S.143(3) R.W.S 147 OF THE IT ACT. 2 . COMMON GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN BOTH THE YEARS UNDER CONSIDERATION, WHEREIN ASSESSEE IS AGGRIEVED BY THE ACTION OF CIT(A) FOR UPHOLDING 25% OF UNVERIFIABLE PURCHASES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT ASSESSEE IS TRADERS IN ELECTRICAL ITEMS, MAINLY WIRES & CABLES. ASSESSE E PURCHASE MATERIALS MOSTLY F ROM THE SALES PEOPLE WHO VISIT ITS OFFICE. SUCH MATERIALS ARE GENERALLY D ELIVERED AT OFFICE ALONG WITH RELEVANT INVOICE. THE TRADERS/SALESMA N DELIVERS THE MATERIAL ITA NO. 757/MUM/2017 & 758/MUM/2017 SHRI SUMIT SUGNOMAL KUKREJA 2 ALONG WITH INVOICE & ALSO COLLECTS THE CHEQUE AGAINST SUCH INVOICE. THE INVOICE SO RECEIVED AGAINST MATERIALS RECEIVED GETS PROCESSED THROUGH BOOKS OF ACCOUNTS AND PAYMENTS ARE RELEASED ACCORDINGLY THROUGH CHEQUE ONLY. THE GOODS (MA INLY WIRES) SO PURCHASED GETS SOLD AT SMALL GROSS MARGIN RANGING FROM 5% TO 15%. DURING THE YEAR (AY 2009 - 2010) ASSESSEE HAD PURCHASED MATERIALS FROM VARIOUS DEALERS WHICH WERE DULY VETTED BY ACCOUNT ING TEAM THROUGH ONLINE CHECK TO ENSURE THAT VAT NUMBERS LISTED ON THE INVOICES ARE GENUINE AND LISTED ON HTTP://WWW.MAHAVAT.GOV.INLTIN_SEARCH/TINSEARCH.JSP WEBSITE THROUGH KNOW YOUR TIN] . THE DEALER S, WHOSE INVOICE WAS HOLDING A VALID VAT NUMBERS. HOWEVER AT SUCH LATER DATES SUCH DEALERS DEFAULTED ON THEIR STA TUTORY DUES EITHER BY NON - PAYMENT OF THEIR VAT DUES OR NOT FILING OF THEIR VAT RETURNS FOLLOWING LISTED DEALERS IN THE NORMAL COURSE OF BUSINESS. ON THE BASIS OF INFORMATION BY SALES TAX OFFICE, AO MADE INQUIRIES FROM THOSE ALLEGED BOGUS SUPPLIERS. NOT SAT ISFYING FROM ASSESSEES REPLY THE AO ADDED ENTIRE AMOUNT OF SUCH PURCHASES IN ASSESSEES INCOME IN BOTH THE YEARS UNDER CONSIDERATION . 5. BY THE IMPUGNED ORDER CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF 25% BY OBSERVING THAT IT IS CASE WHERE THE GOODS WERE RECEIVED FROM THE PARTIES OTHER THAN THE PERSONS WHO HAD ISSUED THE BILLS OF SUCH GOODS. THOUGH THE PURCHASES WERE SHOWN TO HAVE BEEN MADE BY MAKING PAYMENT TO HAWALA DEALERS BUT GOODS MUST HAVE COME FROM GREY MARKET, THEREFORE, UNDER SUCH CIRCUMSTAN CES, THE CHANCES OF PURCHASE COST BEING INFLATED COULD NOT BE RULED OUT. ITA NO. 757/MUM/2017 & 758/MUM/2017 SHRI SUMIT SUGNOMAL KUKREJA 3 6. SINCE THE SALE OF GOODS OUT OF PURCHASE SO MADE HAVE NOT BEEN DECLINED, WE DO NOT FIND ANY MERIT FOR UPHOLDING ADDITION OF 25% OF SUCH PURCHASES . KEEPING IN VIEW THE TOTALITY OF TH E FACTS AND CIRCUMSTANCES OF THE CASE, NATURE OF TRADE THE ASSESSEE IS INVOLVED, IT WILL SERVE THE PURPOSE IF HE UPHOLD THE ADDITION OF 5% ADDITIONAL GP ON SUCH PURCHASES. ACCORDINGLY, WE RESTRICT THE ADDITION TO THE EXTENT O F 5% OF THE ALLEGED BOGUS PURCH ASES SO MADE BY THE ASSESSEE IN BOTH THE YEAR S UNDER CONSIDERATION. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 21 / 06 /2017 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 21 / 06 /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//