DEVEN A. SANGHVI, MUMBAI V. ITO 20(2)(1), MUMBAI

MA 504/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5718 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 05-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Keywords: Bogus purchase; Rectification of order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE S HRI RAJESH KUMAR (AM) AND SHRI RAM LAL NEGI (JM) M .A. N O. 504 / MUM /2019 ( ARISING OUT OF ITA N O. 3756 /MUM /201 6 ) ( ASSESSMENT YEAR : 2010 1 1 ) SHRI DEVEN ASHWIN SANGHVI, 15/74, TRIVENI, OPP. RAHEJA CLUB, LOKHANDWALA COMPLEX, ANDHERI (WEST), MUMBAI 400053 PAN: ABAPS5624H VS. THE INCOME TAX OFFICER - (20)(2)(1), MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HIRO RAI ( A R ) REVENUE BY : MS. KAVITA P. KAUSHIK (D R) DATE OF HEARING : 15 /11 /201 9 DATE OF PRONOUNCEMENT: 07 / 02 /2020 O R D E R PER RAM LAL NEGI, JM THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS APPLICATION FOR RECTIFICATION OF ORDER DATED 15.05.2019 PASSED BY THE D BENCH OF THE ITAT IN THE ASSESSEES CASE ITA NO . 3756 /M UM/2016 PERTAI NING TO THE ASSESSMENT YEAR 2010 - 11 . 2. BEFORE US, T HE LD. COUNSEL HAS POINTED OUT THAT THE TRIBUNAL HAS PASSED THE SAID ORDER WITHOUT CONSIDER ING CERTAIN IMPORTANT ARGUMENTS MAD E ON BEHALF OF THE ASSESSEE DURING THE COURSE OF ARGUMENTS. THE LD. COUNSEL FURTHER POINTED OUT THAT THE CASE WAS ARGUED , BOTH IN RESPECT OF ADDITION QUA THE PURCHASES AND IN RESPECT OF THE RATE OF PROFIT TO BE ADOPTED ; IN RELATION TO THE RATE OF PROFIT, I T WAS SPECIFICALLY POINTED OUT THAT THE APPLICABLE RATE OF MVAT WAS 4% AND SINCE THE DETAILS OF MVAT PAID BY THE ASSESSEE ALONG WITH RELEVANT CHALLANS WERE SUBMITTED VIDE COVERING LETTER DATED 24.07.2018, THE BENCH OUGHT TO HAVE REDUCED 4% OUT OF THE TOTA L ESTIMATED PROFIT IN THE LIGHT OF 2 M.A. NO . 504 / MUM/2019 ASSESSMENT YEAR: 2010 - 11 THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN ITA NO. 2952/MUM/2016 IN THE CASE OF SH. RAKESH KUMAR S KHANDELWAL VS. ITO . 3. THE LD. COUNSEL FURTHER POINTED OUT THAT SO FAR AS THE ESTIMATED PROFIT IS CONCERNED, THE TRIBUNAL HAS ESTIMATED SAME WITHOUT CONSIDERING THE DECISIONS OF THE MUMBAI TRIBUNAL IN THE CASE OF M/S GEOLIFE ORGANICS VS. ACIT ITA NO. 3699/MUM/2016, SHRI RUPESH CHIMAN LAL SAVLA VS. ITO, ITA NO. 6179 - 6182/MUM/2016 AND ACIT VS. M/S STEEL LINE (INDIA), ITA NO. 1321/MUM/2016 RELIED UPON BY THE ASSESSEE, IN WHICH THE CONCERNED BENCHES OF THE TRIBUNAL HAVE TAKEN THE PROFIT RATE AT 2% IN THE SIMILAR CASES. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE ASSESSEE HAD DECLARED THE PROFIT AT 1.19%, THE TRIBUNA L OUGHT TO HAVE REDUCED THE SAID PROFIT FROM THE PROFIT ESTIMATED. 4. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) OPPOSED THE MISC. APPLICATION ON THE GROUND THAT U/S 254 (2) ONLY MISTAKE APPARENT FROM THE RECORD CAN BE RECTIFIED. HOWEVER, THE ASSESSEE HAS MOVED THE PRESENT APPLICATION SEEKING REVIEW OF THE ORDER PASSED BY THE TRIBUNAL , WHICH IS NOT PERMISSIBLE IN LAW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON BY THE LD. COUNSE L. AS POINTED OUT BY THE LD. COUNSEL, THE TRIBUNAL HAS OMITTED TO CONSIDER THE DETAILS OF MVAT PAID BY THE ASSESSEE WHILE PA SSING THE IMPUGNED ORDER. SINCE THE ASSESSEE HAS SUBMITTED THE DOCUMENTARY EVIDENCE TO PROVE PAYMENT OF APPLICABLE MVAT AND SINCE TH E TRIBUNAL HAS OVER LOOKED THE SAID FACT , WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SHOULD GET THE BENEFIT OF MVAT PAID . WE ACCORDINGLY ALLOW THIS ISSUE AND ALLOW THIS BENEFIT TO THE ASSESSEE . 6. SO FAR AS THE SUBMISSION REGARDING BENEFIT OF PROFIT R ATE OF 1.19% DECLARED BY THE ASSESSEE IS CONCERNED, SINCE WE HAVE SUSTAINED THE ADDITION @ 6.5% (MVAT @ 4% + PROFIT @ 2.5%) BY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P SETH 38 TAXMANN.COM 385(GUJ) 2.5% , WE D O NOT FIND MERIT IN THE CONTENTION OF THE ASSESSEE. 7. HENCE, IN VIEW OF THE AFORESAID FACTS AND THE SUBMISSIONS MADE BY THE LD. COUNSEL , WE PARTLY ALLOW THE MISCELLANEOUS APPLICATION F ILED BY THE ASSESSEE 3 M.A. NO . 504 / MUM/2019 ASSESSMENT YEAR: 2010 - 11 AND DIRECT THE AO TO MAKE ADDITION OF 2.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES MADE BY THE ASSESSEE AFTER REDUCING 4% MVAT ALREADY PAID BY THE ASSESSEE . CONSEQUENTLY, WE SUSTAIN THE ADDITION OF 2.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES MADE BY THE ASSESSEE DURING THE PREVIOUS YEAR. 8. THIS ORDER MA Y BE READ AS A PART OF THE ORDER DATED 15.05.2019 PASSED BY THE D BENCH OF THE ITAT IN THE ASSESSEES CASE ITA NO . 3756 /M UM/2016. IN THE RESULT, MISC. APPLICATION FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2010 - 11 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY , 2020 . SD/ - SD/ - ( RAJESH KUMAR ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 07 / 02 / 2020 ALINDRA, PS / 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// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI