Assistant Commissioner of Income Tax, Panvel, Panvel V. Shri Muralidharan Kunju Panicker, Panvel

ITA 890/PUN/2022

AI Insights

The case involves an appeal by the Revenue against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2011-12. The primary issue was the treatment of alleged bogus purchases amounting to Rs.51,43,481/- by the assessee, Shri Muralidharan Kunju Panicker. The Assessing Officer (AO) had added the entire amount of these purchases to the assessee's income, citing them as bogus based on publications by the Sales Tax Department. However, the CIT(A) reduced this addition to 8% of the purchase amount, referencing a similar case decided by the ITAT, Mumbai. The Tribunal found no reason to interfere with the CIT(A)'s decision and dismissed the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132938 (ITAT-PUNE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-02-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 08-12-2022
• Other Referred Cases: Soreline Hotels Pvt. Ltd. in ITA No. 2094/Mum/2018, DCIT vs. Shoreline Hotels Pvt. Ltd. in ITA No.2094/Mum/2018, M/s Hotel Mayfair Pvt. Ltd., Jyoti Foundation (357 ITR 388)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 263

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.890/PUN/2022 धििाारण वर्ा / Assessment Year : 2011-12 Asstt. Commissioner of Income Tax, Panvel Circle, Panvel ......अपीलार्थी / Appellant बिाम / V/s. Shri Muralidharan Kunju Panicker, A-203, 2 nd Floor, Vrindavan B. Co-op. Society, Plot No. 29/41, Sector-9, New Panvel – 410206, Maharashtra PAN : APKPP5401R ......प्रत्यर्थी / Respondent Assessee by : N O N E Revenue by : Shri Ramnath P. Murkunde सुनवाई की तारीख / Date of Hearing : 06-02-2023 घोषणा की तारीख / Date of Pronouncement : 09-02-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the Revenue against the order dated 21-09-2022 passed by the National Faceless Appeal Centre (“NFAC”), Delhi for assessment year 2011-12. 2. We find no representation on behalf of the assessee nor any application filed seeking adjournment. Thus, the assessee called absent and set ex-parte. Therefore, we proceed to dispose of the appeal by hearing the ld. DR and perusing the material available on record. 2 ITA No.890/PUN/2022, A.Y. 2011-12 3. The AO found that the assessee indulged in bogus purchases which were published by Sales Tax Department. According to the AO that the assessee indulged in such suspicious purchases to an extent of Rs.51,43,481/- and added entire amount to the total income of the assessee. The CIT(A) by placing reliance on the decision of ITAT, Mumbai in the case of Soreline Hotels Pvt. Ltd. in ITA No. 2094/Mum/2018 for A.Y. 2008-09 vide order dated 31-12-2020 restricted the addition to net profit @ 8% on account of bogus purchases. We find no material placed on record before us to reduce such net profit as adopted by the CIT(A) taking into consideration the order of Mumbai Tribunal. The relevant portion as discussed by the CIT(A) in paras 5.2 and 5.3 of the impugned order is reproduced for ready reference : “5.2 The reply and judicial pronouncement quoted by the appellant is perused and found to be considerable. The recent decision of ITAT, Mumbai in the case of DCIT vs. Shoreline Hotels Pvt. Ltd. in ITA No.2094/Mum/2018, AY 2008-09 order dated 30.12.2020 is also on similar facts and is relied upon while deciding this appeal. The conclusive para of the order is reproduced here as under: We notice that in the case of M/s Hotel Mayfair Pvt. Ltd. the facts of the case and the issues involved were identical to the facts and the issue involved in the present cases. The A 0 had made addition of 17% of the total amount of bogus purchases made by the assessee. The CIT exercising the jurisdiction u/s 263 of the Act set aside the assessment order holding that the AO should have disallowed the entire amount of bogus purchases. The matter traveled to the ITAT and the coordinate Bench following the ratio laid down by the Hon'ble Delhi High Court in the case of Jyoti Foundation (357 ITR 388) quashed the order of the CIT. Since, the findings of the Ld.CIT(A) are based on the decision of the coordinate Bench rendered in the case of M/s Hotel Mayfair Pvt. Ltd (supra), we do not find any reason to interfere with the findings of the Ld. CIT (A). Accordingly, we uphold the orders dated 22.01.2018 passed by the Ld. Commissioner of Income Tax (Appeals)-47, Mumbai pertaining to the Assessment Years 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 & 2014-15 and dismiss the appeals of the revenue. 5.3 In view of above discussion, the AO is directed not to considered the whole amount of bogus purchases as income of the appellant but to compute the net profit @ 8% on the amount of bogus purchases and to revise the addition made to the income of the appellant. Accordingly, the appeal is partly allowed.” 3 ITA No.890/PUN/2022, A.Y. 2011-12 4. In the light of the above, we find no infirmity in the order of CIT(A) and it is justified. Thus, grounds raised by the Revenue are dismissed. 5. In the result, the appeal of Revenue is dismissed. Order pronounced in the open court on 09 th February, 2023. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 09 th February, 2023. रदव आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A) concerned. 4. The Pr. CIT concerned. 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune