Appeal details
Counselvise Citation
[2024] 101 COUNSELVISE.COM (IT) 7877 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
11-04-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
04-04-2024
Assessment Year
2018-2019
Appeal Filed On
08-02-2024
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER M.A. No. 03/Srt/2024 (Arising out of ITA No. 513/Srt/2023) (Assessment Year: 2018-19) (Physical hearing) Gujarat Polysol Chemicals Ltd., 1, Plot No. 1734, 3 rd Phase, GIDC, Vapi-396195. PAN: AAACG 8908 Q Vs. A.C.I.T., Central Circle-1, Vapi, 8 th Floor, fortune Square-II, Above TBZ, Chala-396191. APPELLANT RESPONDEDNT Assessee represented by Shri P M Jagasheth, C.A. Respondent represented by Shri Vinod Kumar, Sr. DR Date of hearing 05/04/2024 Date of pronouncement 12/04/2024 Order under section 254(2) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This Miscellaneous Application (MA) is filed by the assessee for seeking rectification in order of this Tribunal dated 28/12/2023 passed in ITA No. 513 & 595/Srt/2023 for the Assessment Year (AY) 2018-19. 2. The learned Authorised Representative (ld AR) for the assessee submits that as per findings in para 15 of order dated 28/12/2023, the appeal of assessee is partly allowed wherein appeal of revenue is dismissed. There is mistake in the order which is apparent, as in the order the Tribunal has categorically recorded that the assessee has shown profit margin of 8.68% and that further addition of 7.5% of disputed purchases would be on higher side. Yet gross profit of assessee was increased to 9% in place of 8.68%. As per real spirit of order, direction in conclusion of order must contain with reference to the impugned purchases only, thus there is no ambiguity in the direction of the Tribunal which MA No. 03/Srt/2024 Gujarat Polysol Chemicals Ltd. Vs ACIT 2 needs rectification. The ld. AR of the assessee submits that there is no other mistake apparent in the entire order except ambiguity in the direction, which require suitable correction or modification. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the of order Tribunal dated 28/12/2023. The ld. Sr. DR for the revenue submits that the Bench has taken a conscious and reasonable decision after considering all the facts and the contention of parties. The Tribunal has consciously increased the gross profit of assessee to avoid the possibility of revenue leakage. No modification or correction under the garb of rectification is required in the order. 4. We have considered the submission of both the parties and perused the record carefully including the order of Tribunal dated 28/12/2023. On careful perusal of record, we find that there is a mistake in first sentence of para 15 of the order wherein a word in between “and” and “substantial”, the word “not” is left, thus, the first sentence of para 15 of the order should be read as “We are also conscious of the fact that when there is allegation of bogus purchases only profit element embedded in such purchase is to be brought to tax and not substantial part of the transaction.” We further find that so far as gross profit of assessee is concerned, the same is also correctly recorded. Further our observation that, “further addition of 7.5% of Rs. 36.05 crores would be on higher side” is also correctly recorded. However, there is ambiguity in subsequent para which lacks clarity that instead of increasing the overall gross profit, the addition/disallowance should have been confined to the impugned/disputed purchases, instead of whole of the turnover which are MA No. 03/Srt/2024 Gujarat Polysol Chemicals Ltd. Vs ACIT 3 running into more than Rs. 300 crores. Therefore, to avoid the ambiguity, as we have already noted that to avoid the revenue leakage a reasonable disallowance or lump sum disallowance could be made. We find that alleged bogus purchases have already suffered tax at the rate of 8.68% alongwith the other regular/ genuine purchases. Thus, keeping in view the facts and circumstances of the case, the disallowance of Rs. 25.00 lacs pertaining to bogus purchases of Rs. 36.05 crores would be sufficient to avoid the possibility of revenue leakage. Thus to make the order more meaningful, para 15 of the order dated 28/12/2023 is directed to be read as under: “15. We are also conscious of the fact that when there is allegation of bogus purchases only profit element embedded in such purchase is to be brought to tax and not substantial part of the transaction. The alleged bogus purchases have already suffered tax at the rate of 8.68% alongwith the other regular/ genuine purchases. Thus, keeping in view the facts and circumstances of the case, the disallowance of Rs. 25.00 lacs pertaining to alleged bogus purchases of Rs. 36.05 crores would be sufficient to avoid the possibility of revenue leakage. This ground of assessee’s appeal is partly allowed in above terms whereas corresponding ground of appeal raised by Revenue in cross appeal is dismissed.” 5. In the result, this Misc. application of assessee is allowed in the above terms. Order was pronounced in the open court on 12 th April, 2024. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 12/04/2024 *Ranjan MA No. 03/Srt/2024 Gujarat Polysol Chemicals Ltd. Vs ACIT 4 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order Sr. Pvt. Secretary, ITAT, Surat
