Shri Rikhab Sajjankumar Jain, Surat V. ITO Ward-2(3)(8), Surat

MA 5/SRT/2023

AI Insights

The case involves Shri Rikhab Sajjankumar Jain, the appellant, who sought rectification of a Tribunal order that sustained an addition of 6% on bogus purchases amounting to Rs. 4.08 crores. The original assessment under Section 143(3) estimated the profit at 0.14%, leading to an addition of Rs. 22,24,171. Subsequent assessments and appeals adjusted these figures, with the Tribunal's final order on 31/10/2022 enhancing the addition to 6%. The appellant argued that this led to a double addition, as a similar addition was already made in the initial assessment. The Tribunal dismissed the application, stating it was beyond the scope of Section 254(2) and that the issues raised were already considered in the original judgment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302202 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-03-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 18-01-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: WAY OF PRESENT MISC. APPLICATION IS SEEKING REVIEW OF
• Keywords: Bogus purchase
• Section: 147; 143(3); 254(2)

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. 05/Srt/2023 (Arising out of ITA No. 199/SRT/2019) (Assessment Year: 2008-09) (Physical hearing) Shri Rikhab Sajjankumar Jain, Office No. 105, Tulsi Building, Haripura, Surat. PAN: AHAPJ 8553 G Vs. I.T.O., Ward-2(3)(8), Surat. APPELLANT RESPONDEDNT Assessee represented by Shri Sapnesh Sheth, CA Respondent represented by Shri Vinod Kumar, Sr.DR Date of hearing 17/03/2023 Date of pronouncement 22/03/2023 Order under section 254(2) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This Miscellaneous Applications (MA) is filed by the assessee for seeking rectification in order of this Tribunal dated 31/10/2022 passed in ITA No. 199/Srt/2019 for the Assessment Year (AY) 2008-09. 2. The assessee/applicant in its application, inter alia contended that the assessment order under Section 143(3) of the Income Tax Act, 1961 (in short, the Act) was completed on 30/12/2010 wherein the Assessing Officer estimated the profit at 0.14% after rejecting books of account thereby making addition of Rs. 22,24,171/-. Thereafter, the case of assessee was reopened under Section 147 on the allegation that the assessee is beneficiary of MA No.05/SRT/2023 Shri Rikhab Sajjankumar Jain Vs ITO 2 bogus purchases of Rs. 4.08 crores. The assessment under Section 147 r.w.s. 144 of the Act was completed on 22/03/2016 by making addition of 100% of such bogus purchases. On appeal, before ld CIT(A), the addition of bogus purchases was sustained to 5% of purchases i.e. to the extent of Rs. 20,43,233/- vide order dated 16/01/2019. Order dated 16/01/2019 was challenged by both the parties. In the departmental appeal, the Tribunal enhanced the addition to 6% of purchases of Rs. 4.08 crores vide order dated 31/10/2022 in ITA No. 199/Srt/2019. It is further contended that the ld. counsel for the assessee while making submission, prayed to allow the set off of gross profit (GP) addition already made in the initial assessment order dated 30.12.2010, which was accepted by the assessee. However, while passing the order, the Tribunal missed the submission of assessee and directed to sustain the addition @ 6% of bogus purchases. Non- consideration of such fact and submissions lead to double addition which is mistake apparent on record and the order 31.10.2022 may be corrected suitably by directing the assessing officer to allow the set of off the addition made in the assessment order dated 30.12.2010. 3. The ld. AR of the assessee by referring the contents of Misc. application would submit that while passing the assessment order under Section 143(3) of the Act on 30/12/2010, the assessing MA No.05/SRT/2023 Shri Rikhab Sajjankumar Jain Vs ITO 3 officer estimated the profit at 0.14% of total turnover and thereby made addition of Rs. 22,24,171/-. Further the addition of 6% of disputed purchases of Rs. 4.08 crores as per order of Tribunal is Rs. 24,51,880/- thereby total addition comes to Rs. 46,76,051/- which is 11.44% of impugned/bogus purchases of Rs. 4.08 crores. The ld. AR of the assessee submits that the order dated 31/10/2022 may suitably be modified in granting/allowing set off of addition already made in assessment order under Section 143(3) dated 30/12/2010. 4. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the assessee is seeking review of the order which is beyond the scope of application under Section 254(2) of the Act. The ld. Sr. DR submits that submission of parties is duly recorded in the order and was considered by the Tribunal at the time of passing of order. The ld. Sr. DR for revenue prayed for dismissal of the present Misc. application. 5. We have considered the submissions of both the parties and have seen the contents of order dated 31/10/2022. We have also perused the assessment order dated 30/12/2010 passed under Section 143(3) of the Act. In the said assessment order, the Assessing officer noted that “the assessee has shown GP @ 0.17% on the total turnover of Rs. 1,58,89,36,990/- as against the G.P. @ MA No.05/SRT/2023 Shri Rikhab Sajjankumar Jain Vs ITO 4 0.14% on the total turnover of Rs. 90,43,11,244/- as shown by the assessee himself in the immediate preceding year.” The Assessing Officer after considering the submission of assessee, estimated GP of assessee at 0.14%. However, the case of assessee was reopened on the allegation that the assessee is beneficiary of bogus purchases. The assessment order was completed under Section 147 r.w.s. 144 of the Act on 22/03/2016 wherein the addition of entire amount/bogus purchases of Rs. 4.08 crores was made. However, on appeal before ld CIT(A), such addition was restricted to 5% of disputed/bogus purchases. Aggrieved by the order of ld. CIT(A), both the parties filed their appeal/cross appeal before this Tribunal. This Tribunal after considering the submissions of both the parties and following the consistent view which has been taken in similar cases, wherein in similar case, similar additions were sustained to the extent of 6% of the purchases. 6. We find that while challenging the order of Assessing Officer before the ld. CIT(A) or while challenging the order of ld. CIT(A) before this Tribunal, no such ground of appeal was raised that assessee may be allowed set off of addition made while passing the initial assessment order under Section 143(3) of the Act. There is no allegation that submission of assessee was not recorded while passing the order dated 31/10/2022. At the cost of repetition, we may note that we are consistently upholding 6% of purchases in MA No.05/SRT/2023 Shri Rikhab Sajjankumar Jain Vs ITO 5 all the similar type of cases where the assessees are beneficiary of purchases shown from well-known Hawala/entry providers. The assessee by way of present Misc. application is seeking review of the order which is not permissible. 7. Even otherwise, the addition made by rejecting books of account in estimating profit on total turnover of about Rs. 159 crores (Approx), however, the addition sustained in the order dated 31/10/2022 relates to the impugned purchases of Rs. 4.08 crores only. Thus, the gross profit addition made in the assessment order under Section 143(3) dated 30/12/2010 and addition sustained by this Bench arising of assessment order dated 22.03.2016 are on different counts. Thus, we do not find any merit in the application filed by the assessee. Even otherwise, the present Misc. application is beyond the scope of Section 254(2) of the Act, we dismiss the same. 8. In the result, this Misc. Application of assessee is dismissed. Order was pronounced in the open court on 22 nd March, 2023. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 22/03/2023 *Ranjan Copy to: 1. Appellant 2. Respondent 3. CIT(A) MA No.05/SRT/2023 Shri Rikhab Sajjankumar Jain Vs ITO 6 4. CIT 5. DR 6. Guard File By order / / TRUE COPY / / Sr. Pvt. Secretary, ITAT, Surat