SATYANARAYAN AGRAWAL,AURANGABAD vs. INCOME-TAX OFFICER, WARD - 1(2), AURANGABAD

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ITA 2183/PUN/2017Status: DisposedITAT Pune23 December 2019AY 2009-104 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the entire amount of Hawala purchases cannot be added as income. Following a jurisdictional High Court precedent, the addition was restricted to 10% of the Hawala purchase amount, representing the profit element.

What were the facts?

The assessee claimed purchases based on Hawala bills. The Assessing Officer added the full amount of these purchases to the income. The appeals were for assessment years 2009-10 and 2010-11.

What were the issues?

Whether the entire amount of purchases made through Hawala bills should be added to the income, or only the profit element embedded therein.

Which sections of the Income-tax Act were involved?

Section 69,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI R.S. SYAL

For Appellant: Ms Pooja Khatod
For Respondent: Shri Uday Kakne
Hearing: 23.12.2019Pronounced: 23.12.2019

PER R.S. SYAL, VP :

These two appeals by the assessee relate to the assessment years 2009-10 and 2010-11. Since common issues are raised in these appeals, I am, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience. A.Ys.2009-10 & 2010-11

2.

These are recalled matters in as much as the earlier ex-parte order passed by the Tribunal for both the years was subsequently recalled vide later order dated 09.08.2019. 3. The only issue involved in both the appeals is against confirmation of addition equal to the amount of bogus purchases.

4.

Briefly the facts for the assessment year 2009-10 are that the Assessing Officer, on verification of information received from the Maharashtra Sales Tax Department, observed that the assessee was one of the beneficiaries of Hawala purchase bills. Such amount of bills stood at Rs.7,04,183/-. He made the addition equal to the amount of Hawala purchase bills, which came to be confirmed in the first appeal.

5.

The facts of the appeal for the assessment year 2010-11 are similar. For this year, the assessee was found to have received Hawala purchase bills for sum of Rs.6,18,903/-. The Assessing Officer made addition for the equal sum, which came to be sustained in the first appeal.

6.

The assessee is aggrieved by the sustenance of the additions.

7.

Having heard both sides and gone through the relevant material available on record, it is observed that the assessee allegedly purchased raw material through the Hawala purchase bills and thereafter consumed the same in the manufacture of finished goods. In such a situation, it cannot be said that the entire amount of purchase bills requires addition. The Hon’ble jurisdictional High Court in Pr.CIT Vs. Paramshakti Distributors Pvt. Ltd., vide its A.Ys.2009-10 & 2010-11

judgment dated 15.07.2019 in ITA No.413/2017, has sustained the addition @ 10% of the amount of purchases being the profit element involved therein. Respectfully following the precedent, I restrict the addition to 10% of Hawala purchases for both the years under consideration.

In the result, the appeals are partly allowed.

8.

Order pronounced on 23rd day of December, 2019. R.S. SYAL उपाध्यक्ष /VICE-PRESIDENT ऩुणे / Pune; ददनधंक / Dated : 23rd December, 2019. GCVSR आदेश की प्रतिलिपप अग्रेपिि / Copy of the Order forwarded to : अऩीऱधथी / The Appellant. 1. प्रत्यथी / The Respondent

2.3.

The CIT (Appeals)-1, Aurangabad.

4.

The Pr. CIT-1, Aurangabad. 5. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, “एक-सदस्य” बेंच, ऩुणे / DR, ITAT, “SMC” Bench, Pune. गधर्ा फ़धइऱ / Guard File. 6. आदेशधनुसधर / BY ORDER, ////

वररष्ठ ननजी सधचव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune A.Ys.2009-10 & 2010-11

Date 1 Draft dictated on 23.12.2019 Sr. PS/PS 2 Draft placed before author 23.12.2019 Sr. PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr. Sr. PS/PS PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order **

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