SHRI SAHIL M. SHAH,L/H OF LATE SHRI MAHENDRABHAI HIMMATBHAI SHAH HUF,SURAT vs. INCOME TAX OFFICER WARD 1(3)(3), SURAT

This appeal by the Assessee is directed against the order of Ld.Commissioner of Income Tax(Appeals)-2, Surat dated 31.07.2017 for the assessment year 2008-09.

Grounds raised

Ground No.1 raised by the assessee has not been pressed before us, therefore these ground no.1 of appeal stands dismissed as not pressed.

Ground No.2 raised by the assessee relates to ld.CIT(A) in confirming the addition made by the ld.Assessing Officer(AO) of Rs.8,40,015/- for alleged bogus purchases.

Brief facts of the case are that the assessee filed Return of Income on 13.03.2009 by declaring total income of Rs.1,83,630/-. A search and seizure action was carried out by the investigation Wing, Mumbai in “Shri Rajendra Jain, Shri Sanjay Choudhary & Shri Dharmichand Jain” group of cases on 03.10.2013 which resulted in collection of evidences and other findings, which conclusively proved that the said Shri Rajendra Jain and others had given accommodation entries of bogus purchase bills of Rs.8,40,0158/- during A.Y. 2008-09 to the assessee, Shri Mahendra Himmatlal Shah, HUF. Subsequently, the ld.AO upheld the bogus purchases of Rs.8,40,015/- from M/s.Avi Exports, a benami concern run by Shri Rajendra Jain & Other group is added to the total income of the assessee for the year under consideration.

Being aggrieved, the assessee filed appeal before the ld.CIT(A), wherein the ld.CIT(A) submitted that the very circumstantial evidences itself show the purchases were not genuine and upheld the addition made by the ld.AO of Rs.8,40,015/-.

Being aggrieved, the assessee filed appeal before this Tribunal on the grounds mentioned herein above. The ld.Counsel submitted that the issue is squarely covered by the Tribunal decision in assessee’s own case of Shri Mahendra Himmatlal Shah,(HUF) v. ITO Ward-1(3)(3), Surat in I.T.A.No.2273/AHD/2016 A.Y. 2007-08 dated 15.07.2019 ( copy filed ) passed by Surat Bench of ITAT.

On the other hand, the ld.CIT-D.R. relied on the orders of Lower Authorities.

We have heard the Counsels of both the parties and we also perused the material placed on record and orders passed by the Revenue Authority as well as the judgments cited by the parties. From the records, we find that the issue is squarely covered by the decision Co-ordinate Bench of ITAT in Shri Mahendra Himmatlal Shah,(HUF) v. ITO Ward-1(3)(3), Surat in I.T.A.No.2273/AHD/2016 A.Y. 2007-08 in which para 12 to 14 held as under: “12. We have gone through the relevant record and impugned order. On the basis of information received from Investigation Wing, Mumbai, the A.O. found that the appellant had taken accommodation entry of bogus purchase bills from M/s.AVI Exports of Rs.9,95,265/-. But assessee refused for bogus allegation and in order to avoid the further litigation. Ld.A.R. cited an order of the Bench in for Assessment Year 2007-08 wherein similar circumstances, matter was partly allowed by the Tribunal. 13. Therefore, in parity with the above said order, we restrict the addition of 5% of total so called bogus purchase of Rs.9,95,625/-. And Assessing Officer is directed to disallow 5% of total bogus purchase of Rs.9,95,625/-. 14. In the result, appeal filed by the Assessee is partly allowed.”

Therefore, keeping in view the decision of the Co-ordinate Bench in assessee’s own case the Hon'ble ITAT Surat Bench in Shri Shri Mahendra Himmatbhai Shah (HUF) Vs. ITO, Ward-1(3)(3), Surat / A.Y. 2008-09 Page 4 of 4 Mahendra Himmatlal Shah,(HUF) v. ITO Ward-1(3)(3), Surat in I.T.A.No.2273/AHD/2016 A.Y. 2007-08 has partly allowed the appeal by directing the ld.AO to disallow 5% of total bogus purchases. Therefore, in order to maintain judicial consistency and judicial discipline, we also deem it appropriate to allow the appeal and disallow the 5% addition made by the ld.AO and upheld by the ld.CIT(A), accordingly, the appeal of the assessee is partly allowed.

In the result, appeal of the Assessee is partly allowed as indicated above.

Order pronounced in the open court on 12-02-2020.