BHAVANA STEEL, MUMBAI V. INCOME TAX OFFICER 19 (1) (2), MUMBAI

MA 69/MUM/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7094 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 31-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM M.A. NO. 69/MUM/2018 (ARISING OUT OF ITA NO. 7085/MUM/2016) (ASSESSMENT YEAR: 2010 - 11) M.A. NO. 70/MUM/2018 (ARISING OUT OF CO NO. 98/MUM/2017) (ASSESSMENT YEAR: 2 010 - 11) M.A. NO. 71/MUM/2018 (ARISING OUT OF ITA NO. 7084 /MUM/2016 ) (ASSESSMENT YEAR: 20 09 - 10 ) M.A. NO. 72/MUM/2018 (ARISING OUT OF CO NO. 97/MUM/2017) (ASSESSMENT YEAR: 2009 - 10) BHAVANA STEEL SABUDIDIQUE BLD. IST KHETWADI LANE, MUMBAI 400 004 VS. INC OME TAX OFFICER - 19(1)(2), MUMBAI PAN/GIR NO. AAEFB 9418 R ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI RAJIV KHANDELWAL RESPONDENT BY : SHRI ASHISH KUMAR DATE OF HEARING : 25.05.2018 DATE OF PRONOUNCEMENT : 02.08 .2018 O R D E R PER S HAMIM YAHYA, A. M.: THESE MISCELLANEOUS APPLICATIONS ARE FILED BY THE ASSESSEE AGAINST THE ITA NO S .7084 & 7085/MUM/2016 AND CO NOS. 97 & 98/MUM/2017, PERTAINING TO THE ASSESSMENT YEAR 2009 - 10 & 2010 - 11 PASSED BY THIS ITAT VIDE ORDER DATED 03.07.20 17. 2. IN THE ABOVE APPEALS, THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WHEREIN THE LD. COMMISSIONER OF INCOME 2 BHAVANA STEEL TAX (APPEALS) HAS RESTRICTED THE DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES FROM 12.5% DO NE BY THE ASSESSING OFFICER TO 6.5%. IN THE CROSS OBJECTIONS, THE ASSESSEE HAD APPEALED AGAINST THE ADDITION SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE ITAT IN ITS ORDER HAD RESTORED THE ORDER OF THE ASSESSING OFFICER AND CONFIRMED THE DISALLOWANCE @ 12.5%. 3. AGAINST THE ABOVE ORDER, THE ASSESSEE HAS FILED A MISCELLANEOUS APPLICATION WHICH READS AS UNDER: 2. THE HONOURABLE TRIBUNAL IN THE ORDER HAS DISPOSED OF THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THEIR FAVOUR AND THEREBY DI SMISSING THE CROSS OBJECTIONS RAISED BY THE APPLICANTS. 3. T HE APPARENT MISTAKES THAT HAVE CREPT IN THE ORDER OF THE HONOURABLE TRIBUNAL ARE GIVEN BELOW - . 3.1 IN PARA 8 OF THE ORDER, THE HONOURABLE TRIBUNAL HAS OBSERVED THAT. 'THEY HAVE FURTHER CON FIRMED THAT THEY ISSUED FALSE BILLS TO THIS ASSESSEE ALSO. '; 'THEY' BEING THE SUPPLIERS. THE APPLICANTS SUBMIT THAT THIS OBSERVATION OF THE HONOURABLE TRIBUNAL IS FACTUALLY INCORRECT INASMUCH AS NOTHING HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER OR BY THE CIT(A) TO DEMONSTRATE THAT THE SUPPLIERS HAVE INDEED CONFIRMED THAT THEY HAVE ISSUED FALSE BILLS TO THE APPLICANTS. THE APPLICANTS SUBMIT THAT THE RECORDS OF THE ASSESSING OFFICER CAN BE EXAMINED TO VERIFY THE VERACITY OF THIS IMPORTANT FACT. 3. 2 IN PARA 8 OF THE ORDER, THE HONOURABLE TRIBUNAL HAS OBSERVED THAT, 'HENCE, 1 NOTE THAT THERE IS NO DOUBT ABOUT THE PROPOSITION THAT PURCHASES ARE BOGUS THE ASSESSEE HIMSELF HAS PLACED RELIANCE UPON THE GUJARAT HIGH COURT DECISION IN THE CASE OF SIMIL P. SHETH. '. THE APPLICANTS SUBMIT THAT THIS OBSERVATION OF THE HONOURABLE TRIBUNAL IS FACTUALLY INCORRECT INASMUCH AS THE PURCHASES ARE NOT BOGUS, AND THAT IS NOT THE CASE OF THE ASSESSING OFFICER ALSO; THERE IS DIFFERENCE BETWEEN PURCHASES BEING BOGUS AND PURCHASE PARTIES BEING BOGUS. 3.3 IN PARA 9 OF THE ORDER, THE HONOURABLE TRIBUNAL HAS OBSERVED THAT, ' I NOTE THAT THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO CORRELATE THE SALES WITH BOGUS PURCHASES. THE ASSESSEE HAS FAILED TO DO SO. IN MY CONSIDERIN G OPINION THIS IS VERY 3 BHAVANA STEEL CRUCIAL FOR ARRIVING AT PROPER CONCLUSION IN THIS CASE. ' THE APPLICANTS SUBMIT THAT THIS OBSERVATION IS FACTUALLY INCORRECT INASMUCH AS THE APPLICANTS HAVE PRODUCED THEIR STOCK REGISTERS TOGETHER WITH A STATEMENT LINKING THE PURCHAS ES TO SALES BEFORE THE ASSESSING OFFICER AND THE C1T(A). 4. IN VIEW OF THE ABOVE, THE APPLICANTS PRAY THAT - (A) THE ORDER OF THE TRIBUNAL DATED BE SUITABLY AMENDED, (B) THE TRIBUNAL MAY GRANT SUCH FURTHER AND / OR OTHER RELIEFS AS IT DEEMS FIT. 4. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. UPON CAREFUL CONSIDERATION I FIND THAT THERE IS NO MERIT WHATSOEVER IN THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE. T HE ABOVE SAID ORDER WAS PASSED BY THE ITAT ALSO BY TAKING NO TE OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. N. K. INDUSTRY (IN TAX APPEAL NO. 240 OF 2009 VIDE ORDER DATED 26.02.2016), WHEREIN 100% OF BOGUS PURCHASE WAS HELD TO BE LIABLE TO BE ADDED IN THE HANDS OF THE ASSESSEE AND RESTRICTION BY ITAT OF TH E ADDITION TO 25% OF THE BOGUS PURCHASES WAS SET ASIDE. THE TRIBUNAL HAD FURTHER NOTED THAT THE SPECIAL LEAVE PETITION AGAINST THIS ORDER WAS DISMISSED BY THE HONBLE APEX COURT VIDE ORDER DATED 16.09.2017. IN THESE CIRCUMSTANCES, THE TRIBUNAL HAD CONCLUDE D AS UNDER: 10. HOWEVER, I NOTE THAT THE ASSESSEE CANNOT BE DENIED THE BENEFIT WHICH HAS BEEN GRANTED BY THE ASSESSING OFFICER. HENCE, I HOLD THAT THE ASSESSING OFFICERS DISALLOWANCE OF 12.5% IN THIS CASE MEETS THE END OF JUSTICE. THE LD. CIT(A) HAS ERRED IN REDUCING THE SAME. HENCE, I RESTORE THE ORDER OF THE A.O. IN THIS CASE. HENCE, REVENUES APPEALS ARE ALLOWED AND ASSESSEES CROSS OBJECTIONS STAND DISMISSED. 5. FROM THE ABOVE DISCUSSION, IT IS EVIDENT THAT THE TRIBUNAL HAS BEEN IN FACT FAIR TO THE AS SESSEE AND HAD RESTORED THE ORDER OF THE ASSESSING OFFICER CONFIRMING THE DISALLOWANCE OF 12.5% INSTEAD OF REMITTING THE MATTER TO THE ASSESSING OFFICER TO 4 BHAVANA STEEL CONSIDER THE ISSUE IN LIGHT OF THE ABOVE DECISION OF THE N. K. INDUSTRY (SUPRA). ACCORDINGLY, THESE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE STANDS DISMISSED. 6. IN THE RESULT, THESE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.08.2018 SD/ - (S HAMIM YAHYA) A CCOUNTANT MEMBER MU MBAI ; DATED : 02.08.2018 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD F ILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI