ITO 28 (3)(1), MUMBAI V. SHRI. SH. SARFARAZ ISMAIL SHAIKH, MUMBAI

MA 157/MUM/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2934 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-09-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-08-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 07-06-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, HON'BLE JUDICIAL MEMBER MA.No. 157/MUM/2022 [ARISING OUT OF ITA No. 6872/MUM/2019 (A.Y: 2009-10)] Income Tax Officer – Ward – 28(3)(1) Room No. 316, 3 rd Floor Tower No. 6, Vashi Railway Station Complex Vashi - 400703 v. Sarfaraz Ismail Shaikh M/s. Saru Traders, House No. 6264/005 Slum Ganesh Nagar Galli Next to Krishna Automobile, Phizer Road Turbhe, Navi Mumbai - 400705 PAN: BATPS4623K (Appellant) (Respondent) Assessee by : Ms. Hiral D. Sejpal Department by : Ms. Vranda U. Matkari Date of Hearing : 12.08.2022 Date of Pronouncement : 06.09.2022 O R D E R PER S. RIFAUR RAHMAN (AM) 1. Through this Miscellaneous Application revenue is seeking for rectification of certain mistakes crept in the order passed by the Tribunal in ITA.No. 6872/Mum/2019 dated 30.06.2021 and requested for suitable amendment in the Tribunal order. 2 MA.No. 157/MUM/2022 Sarfaraz Ismail Shaikh 2. This Miscellaneous Application is filed by the Revenue, on a perusal of the order of ITAT 6872/Mum/2019 for the A.Y. 2009-10 in department appeal which was pronounced vide order dated 30.06.2021. Brief facts relating to this Miscellaneous Application are that, the Assessment Order dated 16.03.2015 passed u/s. 143(3) r.w.s. 147 of Income-tax Act, 1961 (in short “Act”) and in that order Assessing Officer disallowed unsubstantiated purchases and undisclosed contract receipts as per 26AS. Aggrieved, assessee preferred an appeal before the CIT(A)-26, Mumbai and Ld.CIT(A) considered the submissions of the assessee and restricted the addition @ 12.5% of the unsubstantiated purchases and sustained the disallowance on undisclosed contract receipts to the extent of ₹.3,75,133/- (Ld.CIT(A) gave part relief to the extent of ₹.1,01,606/-). 3. Aggrieved, both revenue as well as assessee were in appeal before ITAT and the ITAT has adjudicated the above cross appeals independently, since these appeals were posted in different dates. Assessee’s appeal was pronounced on 30.07.2020 (ITA.No. 6625/Mum/2019) in which Coordinate Bench has restricted the addition of unsubstantiated purchases to the extent of 10% of the disputed purchases and with regard to undisclosed contract receipts the ITAT remitted the issue back to the Assessing Officer to verify correctness of 3 MA.No. 157/MUM/2022 Sarfaraz Ismail Shaikh the claim of the assessee. With regard to revenue’s appeal the Coordinate Bench has adjudicated on 30.06.2021 by sustaining the findings of the Ld.CIT(A) and accordingly, dismissed the grounds raised by the revenue. 4. Now the issue raised before us by the revenue relating to the restriction of addition relating to unsubstantiated purchases wherein two Coordinate Benches has decided the issue restricting the addition @10% as well as 12.5%. Now the revenue has filed this Miscellaneous Application for clear direction. 5. Considered the rival submissions and material placed on record, we observe that these cross appeals are adjudicated by the Tribunal benches in two different dates without having the information that there exist cross appeals. Since these appeals are adjudicated independently there is an issue of restriction of addition on unsubstantiated purchases. There is no doubt that the issue involved is unsubstantiated purchases, wherein both the benches has considered the findings of the Ld.CIT(A) and came to the same conclusion that these purchases are unsubstantiated purchases. However, it indicates that assessee has made purchases from gray market and replaced with the bills of bogus bills. While disposing of the assessee’s appeal Coordinate Bench has gave a finding that the 4 MA.No. 157/MUM/2022 Sarfaraz Ismail Shaikh disallowance regarding bogus purchases should be restricted to difference between Gross Profit on normal purchases and purchases through bogus routes. Accordingly, they restricted the disallowance @10%. We also observed that while adjudicating the appeal of the Revenue the bench did not had convenience of going through the above said order dated 30.07.2020. Therefore, they merely restricted the addition based on the findings of the Ld.CIT(A). Since in the assessee’s appeal the bench has considered the issue on merit, therefore we are inclined to accept the findings in the case of assessee’s appeal. Hence, we direct the Assessing Officer to restrict the disallowance @10%. Accordingly, Miscellaneous Application filed by the Revenue is partly allowed. 6. In the result, Miscellaneous Application filed by the Revenue is partly allowed. Order pronounced in the open court on 06 th September, 2022. Sd/- Sd/- (SANDEEP SINGH KARHAIL) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 06/09/2022 Giridhar, Sr.PS 5 MA.No. 157/MUM/2022 Sarfaraz Ismail Shaikh 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) ITAT, Mum