ITO 9(1)(2), MUMBAI V. AMANN INFRA DEVELOPEMNTS LTD, MUMBAI

ITA 929/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8215 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 09-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JENARDHANAN
• Assessee Lawyers: N O N E
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, HONBLE ACCOUNTANT MEMBER & SHRI AMARJIT SINGH , HONBLE JUDICIAL MEMBER ITA NO. 929 / MUM /20 17 ( ASSESSMENT YEAR : 2011 - 12 ) ITO 9(1)(2), ROOM NO. 260A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 VS. M/S. AMANN INFRA DEVELOPMENTS LIMITED 1 ST FLOOR, JUHU AZAD NAGAR CHS, C.D. BARFIWALA ROAD, OPP. NEW INDIA QUARTERS, ANDHERI (WEST), MUMBAI 400 053 PAN/GIR NO: AAGCA 9826 R APPELLANT .. RESPONDENT ASSESSEE BY N ONE REVENUE BY SHRI V.JENARDHANAN DATE OF HEARING 18 / 09 /201 7 DATE OF PRONOUNCEME NT 27 / 11 /201 7 / O R D E R PER R.C.SHARMA (A.M) : 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A ) - 16 , MUMBAI DATED 30.11.2016 F OR A.Y. 2011 - 12 , IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE I . T ACT. 2. IN THIS APPEAL REVENUE IS AGGRIEVED BY THE ACTION OF THE LD.CIT(A) FOR CONFIRMING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO THE EXTENT OF 12.5%. ITA NO.929/MUM/2017(A Y: 2011 - 12) M/S. AMANN INFRA DEVELOPMENTS LIMITED 2 3. NOBODY APPEARED ON B EHALF OF THE ASSESSEE IN SPITE OF GIVEN OPPORTUNITY. THE BENCH DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. DR AND CONSIDERING THE MATERIAL PLACED ON RECORD. 4. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE BRIEF FACTS OF THE CA SE ARE THAT THE A SSESSEE COMPANY FILED ITS RETURN OF INCOME FOR A.Y. 2011 - 12 ON 29.09.2011 DECLARING TOTAL INCOME OF RS.27,36,910/ - . THE RETURN WAS PROCESSED U/S.143(1) OF THE I.T. ACT ACCEPTING THE RETURN INCOME OF THE ASSESSEE COMPANY. THEREAFTER, ON T HE BASIS OF INFORMATION RECEIVED FROM SALES TAX (VAT) DEPARTMENT, STATE OF MAHARASHTRA THE CASE WAS RE - OPENED U/S.147 OF THE I.T. ACT AND AN ORDER U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 WAS PASSED ON 29.03.2015 ASSESSING THE TOTAL INCOME OF THE APPELLANT AT RS.1,03,64,610/ - WHEREBY THE PURCHASES FOR AN AMOUNT OF RS.75,61,306/ - WERE DISALLOWED BY THE A.O. BY TREATING THEM AS BOGUS PURCHASES AND RS.66, 395/ - AS PRELIMINARY EXPENSES. 5. BY THE IMPUGNED ORDER , LD. CIT(A) AFTER APPLYING VARIOUS JUDICIAL P RONOUNCEMENTS UPHELD ADDITION TO THE EXTENT OF 12.5% OF SUCH PURCHASES AFTER HAVING THE FOLLOWING OBSERVING: - 6.2.31 AS NARRATED EARLIER, THE LD. A.O. IN THIS CASE HAS HELD THAT THE PARTIES FROM WHOM THE PURCHASES WERE MADE BY THE APPELLANT WERE FOUND T O BE BOGUS AND THAT IS THE REASON FOR WHICH IT H AS NOT PRODUCED DURING THE ASSESSMENT PROCEEDINGS. 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 PRO FITS. CONSIDERING THE FACTS OF THE CASE A S WELL AS THE VARIOUS CA S E LAWS CITED (SUPRA), I ESTIMATE THE SUPPRESSED PROFIT TO THE EXTENT OF 12.5% OF THE PURCHASES ITA NO.929/MUM/2017(A Y: 2011 - 12) M/S. AMANN INFRA DEVELOPMENTS LIMITED 3 MADE FROM THE BOGUS ENTITIES, AS THE SUPPRESSED PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. TH IS ESTIMATION IS IN ADDITION TO THE GP SHOWN BY THE APPELLANT. ACCORDINGLY, THIS GROU ND OF APPEAL IS PARTLY ALLOWED. 6. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), REVENUE I S IN FURTHER APPEAL BEFORE US. 7. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHO RITIES BELOW. IT IS CLEAR FROM THE FINDINGS SO RECORD ED BY LD. CIT(A) THAT THE CORRESPONDING SALES SO MADE BY THE ASSESSEE IN RESPECT OF THE BOGU S PURCHASES WERE NOT DECLINED. AFTER APPLYING VARIOUS JUDICIAL PRONOUNCEMENT S TO THE FACTS OF INSTANT CASE, T HE LD . CIT(A) RECORDED HIS FINDING AT PARA NO.6 OF HIS ORDER WHICH HAS NOT BEEN CONTROVERTED BY THE LD.DR BY BRINGING ANY POSITIVE MATERIAL ON RECORD. ACCORDINGLY WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) . 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 / 11 /2017 SD/ - SD/ - ( AMARJIT SINGH ) JUDICIAL MEMBER ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 27 / 11 /201 7 GIRIDHAR SR. PS ITA NO.929/MUM/2017(A Y: 2011 - 12) M/S. AMANN INFRA DEVELOPMENTS LIMITED 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, ( ASSTT. REGISTRAR) I TAT, MUMBAI