R.D. JAIN & COMPANY, MUMBAI V. ITO 17 ( 3) ( 1), MUMBAI

MA 636/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3329 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITA
• Assessee Lawyers: KIRIT S SANGHAVI
• Keywords: Bogus purchase
• Section: 254(2); 22

Judgement Text

1 MA NOS.636 & 637/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI MAHAVIR SINGH (VICE PRESIDENT) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) M.A. NO.636 /MUM/2019 (ARISING OUT OF ITA NO.2880/MUM/2018) (ASSESSMENT YEAR: 2010-11) & M.A. NO.637 /MUM/2019 (ARISING OUT OF ITA NO.2881/MUM/2018) (ASSESSMENT YEAR: 2011-12) R D JAIN & COMPANY 507, GUPTA BHAVAN SANT TUKARAM ROAD MUMBAI-400 009 PAN : AABFR 0957J VS ITO - 17(3)(1) MUMBAI APPLICANT RESPONDENT APPLICANT BY SHRI KIRIT S. SANGHAVI, AR RESPONDENT BY MS. R. KAVITA, DR DATE OF HEARING 21/02/2020 DATE OF PRONOUNCEMENT 04 /03/2020 O R D ER PER G MANJUNATHA: AM THE ASSESSEE HAS FILED THESE MISCELLANEOUS APPLICAT IONS U/S 254(2) OF THE I.T.ACT, 1961 AND REQUESTED TO RECALL THE ORDER OF THE TRIBUNAL IN ITA NO.2880 & 2881/MUM/2018, ORDER DATE D 16/01/2019 FOR THE AY 2010-11 AND 2011-12 2. THE ASSESSE HAS NARRATED FACTS AND MISTAKES STAT ED TO BE APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL FOR BOTH ASSESSMENT 2 MA NOS.636 & 637/MUM/2019 YEARS, DATED 16/01/2019. THE RELEVANT CONTENTS OF T HE MISCELLANEOUS APPLICATION FILED FOR AY 2010-11 ARE REPRODUCED AS UNDER:- 1. THIS MISCELLANEOUS APPLICATION ARISES OUT OF THE OR DER PASSED IN APPEAL NO.ITA2880/M/2018, WHICH WAS PASSED EX-PARTE. A COP Y OF THE SAID ORDER IS ANNEXED AS EXHIBIT 1. 2. BY THE MISCELLANEOUS APPLICATION, THE APPLICANT APP ELLANT URGES THE HONOURABLE BENCH TO RECTIFY THE MISTAKE REFERRED TO IN PARA 7 HEREAFTER THE AFORESAID ORDER PASSED IN APPEAL NO. ITA 2880/M/201 8. 3. THE APPLICANT/APPELLANT STATES THAT IT HAS NOT FILED ANY OTHER MISCELLANEOUS APPLICATION BEFORE THE HONOURABLE TRIBUNAL AGAINST THE ORDER IN APPEAL NO.LTA 2880/M/2018. II FACTS: 3. THE APPELLANT REQUESTS THE HONOURABLE INCOME TAX AP PELLATE TRIBUNAL (ITAT) TO GRANT IT PERMISSION TO SUBMIT THE FOLLOWING FACT S IN RELATION TO MISCELLANEOUS APPLICATION FOR KIND CONSIDERATION. THE HONOURABLE ITAT HAS PASSED AN ORDER DATED 16 RH JANUARY,2019 IN IT A NO. 2880/MUM/20L3 ON THE APPEAL PREFERRED BY THE APPELL ANT AGAINST THE ORDER DATED 2 ND JANUARY,2018 OF THE LEARNED CIT(A). THE ORDER OF HO NOURABLE ITAT IN MANOR NO, 2880/M/2018 WAS RECEIVED BY THE APPELLANT ON 22 ND JUNE, 2019. 2. THE ISSUE INVOLVED IN THE APPEAL WAS ESTIMA TION OF MARGIN OF PROFIT IN RESPECT OF PURCHASES ALLEGED TO BE BOGUS. 4. THE AO ESTIMATED A PROFIT MARGIN OF 5% ON THE ALLE GED BOGUS PURCHASE OF RS.2,20,12.905/-. ACCORDINGLY, THE AO MADE THE ADDI TION OF RS.11,00,645/-. 5. THE APPELLANT TOOK THE MATTER IN FIRST APPEAL BEFOR E THE LEARNED CIT(A) WHO CONFIRMED THE ADDITION AT THE RATE OF 5%. 6. THE APPELLANT PRESENTED AN APPEAL BEFORE THE HONOUR ABLE ITAT, MUMBAI, VIDE APPEAL NO, ITA2880/M/2018. THE REVENUE IS NOT IN APPEAL AGAINST THE ORDER OF THE CIT(A), MUMBAI. 7. HONOURABLE I TAT, BENCH 'F MUMBAI, DISPOSED OF THE APPEAL NO. ITA.2880/M/2018 VIDE ORDER DATED 16 TH JANUARY, 2019 RECEIVED BY THE APPELLANT ON 22 ND JUNE, 2019, WHEREIN THE HONOURABLE ITAT, F BENCH, MUMBAI DIRECTED THE AO TO ESTIMATE THE PROFIT AT 8% ON THE TOTAL ALLEGED BOGUS PURCHASES. 3 MA NOS.636 & 637/MUM/2019 8. THUS, THE HONOURABLE ITAT, F BENCH, MUMBAI, HAS E NHANCED THE ASSESSMENT ORIGINALLY MADE BY THE AO BY MAKING ADDI TION @ 5% OF THE ALLEGED BOGUS PURCHASES, WHICH WAS CONFIRMED BY THE CIT(A), BY NOW DIRECTING THE AO TO APPLY THE RATE OF 8% ON THE ALL EGED BOGUS PURCHASES. ENHANCEMENT OF ASSESSMENT IN APPEAL BY THE ASSESSEE IS A MISTAKE WHICH MAY BE RECTIFIED. 8. PRAYER: THE APPELLANT MOST RESPECTFULLY SUBMITS THAT IT WAS THE APPELLANT'S APPEAL IN WHICH THE ORDER WAS PASSED ON APPEAL NO. ITA 2880/M /2018 DIRECTING THE AO TO APPLY 8% MARGIN ON THE ALLEGED BOGUS PURCHASES, WHI CH MAY BE RESTORED TO 5% OF THE ALLEGED BOGUS PURCHASES; AND (II) THE APPEAL IS TREATED AS 'DISMISSED INSTEAD OF PARTLY ALLOWED'. 3. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED MI SCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE ALONG WITH ORDER OF THE TRIBUNAL, DATED 16/01/2019 AND FIND THAT THERE IS AN APPARENT ERROR IN ORDER OF THE TRIBUNAL IN ESTIMATION OF NET PROFIT OF 8% ON ALLEG ED BOGUS PURCHASES, EVEN THOUGH THE LD. AO HAS ADOPTED 5% PROFIT ON ALL EGED BOGUS PURCHASES AND THE SAME HAS BEEN UPHELD BY THE LD. C IT(A) CONTRARY TO THE SETTLED POSITION OF LAW THAT THE TRIBUNAL HAS N O POWER TO ENHANCE THE ASSESSED INCOME DETERMINED BY THE LD. AO. THEREFORE , WE ARE OF THE CONSIDERED VIEW THAT THERE IS AN ERROR IN THE ORDER OF THE TRIBUNAL, DATED 16/01/2019, WHICH COULD BE RECTIFIED U/S 254(2) OF THE I.T.ACT, 1961. HENCE, WE RECALLED THE ORDER OF THE TRIBUNAL, DATED 16/01/2019 IN ITA NO.2880 & 2881/MUM/2018 AND LISTED THE APPEALS FOR HEARING ON 23/03/2020, FOR WHICH NO SEPARATE NOTICE OF HEARING SHALL BE ISSUED TO EITHER PARTIES. 4. IN THE RESULT, THE MISCELLANEOUS APPLICATIONS FI LED BY THE ASSESEE FOR BOTH ASSESSMENT YEARS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03.2020 4 MA NOS.636 & 637/MUM/2019 SD/- SD/- MAHAVIR SINGH G MANJUNATHA VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DT : 04.03.2020 THIRUMALESH, SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//