HIRALAL C. SHARMA, AMBERNATH V. ITO WD 2(1), KALYAN

ITA 7655/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0595 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2016
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Assessee Lawyers: GOVIND JHAVERI
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER ITA NO. 7655/MUM/2016 TO 7657/MUM/2016 (ASSESSMENT YEAR: 2009 - 10 TO 2011 - 12 ) HIRALAL C. SHARMA (PROP. OF PAWAN ENTERPRISES) 13/87, NEW HOUSING BOARD COLONY, AMBERNATH (WEST) AMBERNATH PAN NO.AEEPS3000E . APPELLANT V/S ITO WD 2(1), KALYAN . RESPONDENT ASSESSEE BY : SHRI. GOVIND JHAVERI REVENUE BY : SHRI. SUMIT KUMAR DATE OF HEARING 30 . 05 . 2017 DATE OF ORDER - 01 .0 6 .2017 O R D E R PER: SHAMIM YAHYA THESE ARE THE APPEALS BY THE ASSESSEE, WHEREIN ASSESSEE IS AGGRIEVED BY FOLLOWING ADDITIONS ON ACCOUNT OF BOGUS PURCHASES: - ASSESSMENT YEAR AMOUNT (RS.) 2011 - 12 3,14,519.00 2010 - 11 5,29,145.00 2009 - 10 80,550.00 ITA NO. 7655 - 7657/MUM/2016 HIRALAL C. SHARMA 2 2. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. 3. I FIND THAT HUNDRED PERCENT DISALLOWANCE OF BOGUS PURCHASE HAS BEEN MADE IN THIS CASE ON ACCOUNT OF INFORMATION THAT THE SUPPLIERS WERE PROVIDING BOGUS PURCHASE BILLS. I NOTE THAT THE SALES HAS NOT BEEN DOUBTED. IT IS SETTLED LAW THAT WHEN THE SALES HAVE N OT BEEN DOUBTED THE CORRESPONDING PURCHASE CANNOT BE HELD TO BE IN ENTIRELY BOGUS. SUCH PRACTICES INDICATE PURCHASING THROUGH THE GREY MARKET WHICH ENTAILS SAVINGS TO THE ASSESSEE ON ACCOUNT OF SAVING IN TAXES AND OTHERS AT THE EXPENSE OF THE EXCHEQUER. IN SIMILAR CIRCUMSTANCES HONOURABLE GUJARAT HIGH COURT IN THE CASE OF SUMIT P SHETH HAS UPHELD DISALLOWANCE OF 12.5% OF THE BOGUS PURCHASES. LEARNED COUNSEL OF THE ASSESSEE FAIRLY AGREED FOR A DISALLOWANCE OF 12.5% OF THE BOGUS PURCHASES. 4. ACCORDINGLY IN THE BACKGROUND OF AFORESAID DISCUSSION I MODIFY THE ORDER OF LEARNED CIT - A. I HOLD THAT 12.5% DISALLOWANCE FROM THE BOGUS PURCHASES WOULD MEET THE END OF JUSTICE. 5. IN THE RESULT THESE APPEALS BY THE ASSESSEE STAND PARTLY ALLOWED. ORDER PRONOUNCED IN TH E OPEN COURT ON 0 1 .0 6 .2017 S D / - SHAMIM YAHYA ACCOUNTANT MEMBER MUMBAI, DATED: 0 1 .0 6 .2017 ITA NO. 7655 - 7657/MUM/2016 HIRALAL C. SHARMA 3 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE. BY ORDER KARUNA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI