INCOME TAX OFFICER 25(3)(3), MUMBAI V. RAJIV I. GANDHI, MUMBAI

MA 434/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5709 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 20-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH B GUPTE
• Keywords: Bogus purchase
• Section: 143(3); 72; 147

Judgement Text

P A G E | 1 M.A. NOS.434 & 435/MUM/2018 AYS.2009 - 10 & 2010 - 11 (ARISING OUT OF ITA NOS.7418 & 7419/MUM/2016) INCOME TAX OFFICER - 25(3)(3) VS. SHRI RAJIV I. GANDHI IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER M.A. NOS. 434 & 435/MUM/2018 (ARISING OUT OF ITA NOS.7418 & 7419/MUM/2016) (ASSESSMENT YEARS: 2009 - 10 & 2010 - 11 ) INCOME TAX OFFICER - 25(3)(3) MUMBAI VS. SHRI RAJIV I. GANDHI 4, BAJAJ SOCIETY, BAJAJ ROAD, VILE PARLE (W), MUMBAI - 400 057 PAN AADPG3967F (APPLICANT) (RESPONDENT) APPLICANT BY: MS. NILU JAGGI, D .R RESPONDENT BY: SHRI RAJESH B. GUPTE , A .R DATE OF HEARING: 1 3.12 .2019 DATE OF PRONOUNCEMENT: 3 0 .01.2020 O R D E R PER RAVISH SOOD, JM: THE PRESENT MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE ON 20.06.2018 ARISES FROM THE CONSOLIDATED ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS OF THE ASSESSEE VIZ. RAJIV I. GANDHI VS. ITO - 25(3)(3), MUMBAI IN ITA NOS. 7418 & 7419/MUM/20 16 FOR AYS. 2009 - 10 & 2010 - 11, VIDE ITS ORDER DATED 03.01.2018. 2. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) AT THE VERY OUTSET OF THE HEARING OF THE APPLICATION S TOOK US THROUGH THE FACTS OF THE CASE. THE LD. D.R BRIEFLY TOOK US THROUGH THE FACTS OF THE CASE, WHICH AS PER HIM WILL HAVE A BEARING ON THE DISPOSAL OF THE PRESENT APPLICATION S . ON THE BASIS OF AN INFORMATION RECEIVED BY THE A.O FROM THE OFFICE OF THE DGIT (INV.), MUMBAI, THAT THE ASSESSEE A S A BENEFICIARY HAD OBTAINED BOGUS PURCHASE BILLS DURING THE YEAR RELEVANT TO A.Y. 2009 - 10 AND A.Y. 2010 - 11, AS UNDER: - P A G E | 2 M.A. NOS.434 & 435/MUM/2018 AYS.2009 - 10 & 2010 - 11 (ARISING OUT OF ITA NOS.7418 & 7419/MUM/2016) INCOME TAX OFFICER - 25(3)(3) VS. SHRI RAJIV I. GANDHI A.Y. AMOUNT 2009 - 10 RS.1,28,65,146/ - 2010 - 11 RS.2,15,12,975/ - , HIS CASE FOR THE CAPTIONED YEARS WAS REOPENED UNDER SEC. 147 OF TH E ACT. IT WAS SUBMITTED BY THE LD. D.R , THAT THE A.O VIDE HIS RESPECTIVE ASSESSMENT S FRAMED UNDER SEC. 143(3) R.W.S 147 FOR THE AFORESAID YEARS HAD ADDED THE ENTIRE VALUE OF THE BOGUS PURCHASES TO THE RETURNED INCOME OF THE ASSESSEE FOR THE SAID YEARS. ON APPEAL, THE CIT(A) RESTRICTED THE ADDITION TO 12.5% OF THE AGGREGATE VALUE OF THE RESPECTIVE BOGUS PURCHASES MADE BY THE ASSESSEE IN THE AFOREMENTIO NED YEARS. 3. IT WAS SUBMITTED BY THE LD. D.R THAT BOTH THE ASSESSEE AND THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. IT WAS AVERRED BY THE LD. D.R, THAT THE ITAT, I, B ENCH, MUMBAI , VIDE ITS CONSOLIDATED ORDER DATED 03.01.2018 FOR A.Y. 2009 - 10 AND A.Y. 2010 - 11, HAD DISPOSED OFF THE ASSESSES APPEAL. IT WAS SUBMITTED BY THE LD. D.R THAT THE TRIBUNAL WHILE DISPOSING OFF THE AFORESAID APPEALS OF THE ASSESSEE HAD PARTLY ALLOWED RELIEF TO THE AS SESSEE AND DIRECTED THE A.O TO RESTRICT THE ADDITION TO THE EXTENT OF 10% OF THE AGGREGATE VALUE OF THE BOGUS PURCHASES . ON THE OTHER HAND, THE ITAT E BENCH, MUMBAI VIDE ITS CONSOLIDATED ORDER FOR THE AFORESAID YEARS I.E A.Y. 2009 - 10 AND A.Y. 2010 - 11 IN ITA NOS.7288 & 7289/MUM/2016, VIDE ITS ORDER DATED 18.08.2017 HAD DISMISSED THE APPEAL S OF THE REVENUE. AS SUCH, IT WAS SUBMITTED BY THE LD. D.R THAT THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS OF THE REVENUE HAD UP HELD THE ORDER OF THE CIT(A), WHEREIN TH E LATTER HAD DIRECTED THAT THE ADDITION IN RESPECT OF THE BOGUS PURCHASES BE RESTRICTED TO THE EXTENT OF 12.5% OF THE AGGREGATE VALUE OF THE IMPUGNED PURCHASES. ON THE BASIS OF THE AFORESAID FACTS, IT WAS SUBMITTED BY THE LD. D.R THAT THE AFORESAID TWO DIFFERENT ORDERS OF THE TRIBUNAL WHILE DISPOSING OFF THE RESPECTIVE APPEALS O F THE ASSESSEE AND THE REVENUE HAD RESULTED INTO TWO VIEWS WHICH ARE CLEARL Y CONFLICTING AND MILITATE AGAINST EACH OTHER. IT WAS THUS AVERRED BY THE LD. D.R THAT THE ORDER OF THE TRIBUNAL PASSED WHILE DISPOSING OFF THE APPEALS OF THE ASSESSEE VIZ. SHRI RAJIV I. GANDHI VS. ITO - 25(3)(3), MUMBAI [ITA NO.7418 & 7419/MUM/2016, DATED 0 3. 01.2018], IS NOT FOUND TO BE IN CON F O RMITY WITH THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS OF THE REVENUE FOR THE AFOREMENTIONED YEARS IN ITA NOS. 7288 & 7289/MUM/2016, DATED 18.08.2017. ON THE BASIS OF THE AFORESAID FACTUAL POSITIO N, IT WAS SUBMITTED BY THE LD. D.R THAT THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS OF THE ASSESSEE FOR A.Y: 2009 - P A G E | 3 M.A. NOS.434 & 435/MUM/2018 AYS.2009 - 10 & 2010 - 11 (ARISING OUT OF ITA NOS.7418 & 7419/MUM/2016) INCOME TAX OFFICER - 25(3)(3) VS. SHRI RAJIV I. GANDHI 10 AND A.Y: 2010 - 11 IN ITA NOS. 7418 & 7419/MUM/2016, DATED 03.01.201 8, SUFFERS FROM A MISTAKE, WHICH BEING GLARING, PATE NT, OBVIOUS AND APPARENT FROM RECORD, THEREIN RENDERS THE SAME AMENABLE FOR RECTIFICATION UNDER SEC. 254( 2) OF THE ACT. ACCORDINGLY, IT WAS SUBMITTED BY THE LD. D.R THAT THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL S OF THE ASSESSEE IN ITA NO.7418 & 7419/MUM/2016, DATED 03.01.2018 FOR A.Y(S) 2009 - 10 & 2010 - 11 MAY BE RECALLED. 4. PER CONTRA, THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE DID NOT CONTROVERT THE AFORESAID FACTUAL POSITION AS HAD BEE N AVERRED BY THE COUNSEL FOR THE REVENUE. 5. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES AND ALSO PERUSED THE RECORDS. ADMITTEDLY, THE TRIBUNAL HAD DISPOSED OFF THE RESPECTIVE APPEALS OF THE ASSESSEE AND THE REVENUE FOR A.Y. 2009 - 10 AND A.Y. 2010 - 11, BY WAY OF TWO SEPARATE ORDERS. IN FACT, WE ARE TAKEN ABACK BY THE FACT THAT NEITHER OF THE PARTIES AT THE TIME OF HEARING OF THE APPEALS OF THE ASSESSEE HAD THOUGHT IT FIT TO BRING IT TO THE NOTICE OF THE TRIBUNAL THAT THE APPEALS OF THE REVENUE FOR BOTH OF THE SAID YEARS WERE ALSO PENDING DISPOSAL. BE THAT AS IT MAY, THE FAILURE ON THE PART OF THE ASSESSEE/REVENUE TO BRING THE AFORESAID MATERIAL FACT TO THE NOTICE OF THE TRIBUNAL, HAD THEREIN RESULTED INTO TWO SEPARATE ORDERS, WHEREIN ON THE SOLE ISSUE OF QUANTIFICATION OF THE PROFIT ELEMENT INVOLVED IN THE UNPROVED/BOGUS PURCHASES MADE BY THE ASSESSEE DU RING THE SAID RESPECTIVE ORDERS TWO CONFLICTING VIEWS HAD BEEN ARRIVED AT BY THE TRIBUNAL. AS OBSERVED BY US HEREINABOVE, THE TRIBUNAL WH ILE DISPOSING OFF THE APPEALS OF THE ASSESSEE FOR THE AFOREMENTIONED YEARS I.E A.Y. 2009 - 10 AND A.Y. 2010 - 11 IN ITA NO. 7418 & 7419/MUM/2016, DATED 03.01.2018, HAD ALLOWED PAR T RELIEF TO THE ASSESSEE AND SCALED DOWN THE DISALLO WANCE SUSTAINED BY THE CIT(A) FROM 12.5% TO 10%. ON THE CONTRARY, THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS OF THE REVENUE FOR THE AFOREMENTIONED YEARS I.E. A.Y. 2009 - 10 AND A.Y. 2010 - 11 IN ITA NOS. 7288 & 7289/MUM/2016, DATED 18.08.2017, HAD UPHELD THE ORDER OF THE CIT(A), WHEREIN THE PROFIT ELEMENT INVOLVED IN THE BOGUS/UNPROVED PURCHASE WAS QUANTIFIED BY THE SAID FIRST APPELLATE AUTHORITY AT 12.5%. IN THE BACKDROP OF THE AFORESAID FACTS, WE ARE IN AGREEMENT WITH THE CONTENTIONS ADVANCED BY THE LD. D.R THAT THE ORDER PASSED BY TH E TRIBUNAL WHILE DISPOSING OFF THE RESPECTIVE APPEALS OF THE ASSESSEE FOR THE AFOREMENTIONED YEARS IN ITA NO. 7418 & 7419/MUM/2016, DATED 03.01.2018, NOT BEING IN CONFORMITY WITH ITS ORDER PASSED WHILE DISPOSING OFF THE APPEALS OF THE REVENUE IN ITA NO. 72 88 & P A G E | 4 M.A. NOS.434 & 435/MUM/2018 AYS.2009 - 10 & 2010 - 11 (ARISING OUT OF ITA NOS.7418 & 7419/MUM/2016) INCOME TAX OFFICER - 25(3)(3) VS. SHRI RAJIV I. GANDHI 7289/MUM/2016, DATED 18.08.2017, HAD THEREIN RENDERED THE SAME AS SUFFERING FROM A MISTAKE WHICH BEING GLARING, PATENT, OBVIOUS AND APPARENT FROM RECORD , HAD MADE IT AMENABLE FOR RECTIFICATION UNDER SEC.254(2) OF THE ACT. ACCORDINGLY, WE RECALL T HE OR DER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE RESPECTIVE APPEALS OF THE ASSESSEE VIZ. RAJIV I. GANDHI VS. ITO - 25(3)(3) [ITA NO. 7418 & 7419/MUM/2016, DATED 03.01.2018], FOR THE LIMITED PURPOSE OF BRINGING THE SAME IN CONFO RMITY WITH THE ORDER PASSED B Y THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS OF THE REVENUE IN ITA NO. 7288 & 7289/MUM/2016, DATED 18.08.2017, FOR THE AFOREMENTIONED YEARS. THE REGISTRY IS DIRECTED TO FIX THE APPEALS OF THE ASSESSEE FOR A.Y. 2009 - 10 IN ITA NO . 7418/MUM/2016 AND A.Y. 2 0 10 - 11 IN ITA NO. 7419/MUM/2016 ON 12.02.2020. THE PARTIES BE INTIMATED ABOUT THE FIXATION OF THE APPEAL FOR THE AFORESAID DATE. 6. THE MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE ARE ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 3 0 . 01.2020 S D / - S D / - ( M. BALAGANESH ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 3 0 / 0 1 /2020 ROHIT, P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI