Pavan Kumar Jain, Surat V. Income tax Officer Ward-2(3)(8), Surat

MA 2/SRT/2023

AI Insights

The case involves Pavan Kumar Jain, the proprietor of Pavan International, who filed a Miscellaneous Application against an order of the Income Tax Appellate Tribunal which had enhanced the addition on bogus purchases from 5% to 6%. The original dispute arose from the assessment year 2008-09, where both the Revenue and the assessee had appealed to the Tribunal. The Revenue's appeal was dismissed due to low tax effect, while the assessee contested the 5% addition on bogus purchases sustained by the Ld. CIT(A). The Tribunal initially enhanced this addition to 6% based on a precedent, which the assessee argued was a mistake as his appeal was against the 5% addition, not for further enhancement.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301707 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2023
• Other Referred Cases: Pankaj K. Chaudhary (in ITA No.1152/AHD/2016)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Tax effect; Tax effect
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM Miscellaneous Application No.2/SRT/2023 [Arising out of ITA No.121/SRT/2019] Assessment Year: (2008-09) (Physical Hearing) Pavan Kumar Jain, Prop. of Pavan International, Office No. 412, Dharnanadan Chambers, Bali Sheri, Mahidharpura, Surat – 395003. Vs. The ITO, Ward-2(3)(6), Surat. (Appellant) (Respondent) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ADTPJ5694B Appellant by Shri Mehul Shah, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 17/03/2023 Date of Pronouncement 30/03/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of the captioned Miscellaneous Application, the assessee has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961( in short ‘ the Act’) has crept in the order of the Tribunal dated 20.09.2022, in ITA No.121/SRT/2021 for AY.2008-09. 2. The case of the assessee in this Miscellaneous Application is that for the year under consideration for AY.2008-09, the Revenue as well as assessee was in appeal before the Tribunal. The Revenue’s appeal was dismissed on account of low tax effect. Since, it was the case of bogus purchase, wherein the Assessing Officer has made addition at the rate of 100%, however, on appeal the Ld. CIT(A) has restricted the addition at the rate of 5% of bogus purchase. Since, the appeal of the Revenue was dismissed on account of low tax effect, however the assessee’s appeal was against the order of the Ld. CIT(A), wherein the assessee has contended that even 5% addition sustained by the Ld. Page | 2 MA.2/SRT/2023/AY.2008-09 Pavan Kumar Jain CIT(A) on bogus purchases is not sustainable in the Act. However, the Tribunal has enhanced the addition from 5% to 6% by relying on the judgment of Co-ordinate Bench in the case of Pankaj K. Chaudhary (in ITA No.1152/AHD/2016), order dated 21.09.2021. The Ld. Counsel contended that since the assessee was in appeal against the order of the Ld. CIT(A) wherein he plead that even addition sustained by the Ld. CIT(A) at the rate of 5% of bogus purchase should be deleted, therefore assessee was in appeal before the Tribunal to delete the 5% addition and not for enhancement. There is a mistake apparent from record in the order of Tribunal, which may be rectified. 3. On the other hand, Learned Departmental Representative (Ld. DR) for the Revenue submitted that it is the addition at the rate of 6% of bogus purchase by following the decision of Co-ordinate Bench in the case of Pankaj K. Chaudhary (supra), therefore there is no mistake apparent on record. 4. We have heard both the parties and perused the material available on record. We note that these are the cross-appeals of the assessee and Revenue for AY.2008-09 wherein the Revenue contended that addition made by the Assessing Officer at the rate of 100% of bogus purchases should be sustained. However, contention of the assessee in his appeal was that even the addition sustained by the Ld. CIT(A) at the rate of 5% of bogus purchases should be deleted. However, while passing the order on 20.09.2022, we followed earlier order of Tribunal in Pankaj K. Chaudhary (supra) wherein addition was enhanced to 6%. Thus, we find mistake in order dated 20.09.2022 by enhancing addition from 5% to 6% as the appeal of the Revenue was already dismissed, therefore, we direct that Para 24 of the order of the Tribunal, dated 20.09.2022, in ITA No.121/SRT/2019 and 107/SRT/2019, should read as follows: “24. We notice that the issue is squarely covered by the decision of the Co-ordinate Bench of Surat in the case of Pankaj K. Chaudhary (supra) and there is no change in facts and law, therefore respectfully following the binding precedent, appeal of assessee is also dismissed.” Page | 3 MA.2/SRT/2023/AY.2008-09 Pavan Kumar Jain 5. In the result, Miscellaneous Application filed by the assessee is allowed to the extent indicated above. Order is pronounced on 30/03/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 30/03/2023 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat