Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The revenue has filed the present appeal against the order dated 28.05.2019 passed by the Commissioner of Income Tax (Appeals) -33, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2009- 10.
The revenue has raised the following grounds: -
1. “On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding only 12.5% addition of Rs.70,986/- on account of bogus purchase without appreciating the fact that addition was made on the basis of information received from the Maharashtra Sales Tax A.Y.2009-10 Department and the assessee could neither produce the parties nor produce transportation receipt and notices u/s 133(6) were returned unserved meaning thereby that the parties are bogus.
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting 12.5% of the addition of Rs.70,986/- on account of bogus purchase without appreciating the fact that the onus lo prove that the claim of purchase is genuine was on the assessee which the assessee failed to discharge." 3. The brief facts of the case are that the assessee filed his return of income on 25-09-2009 declaring a total income of Rs.2,45,940/- for the A.Y.2009-10. The return was processed u/s 143(1) of the I.T Act. Thereafter the case of the assessee was reopened u/s 148 by issuance of notice dated 28.01.2014. The notice was served upon the assessee. The case of the assessee was reopened on the basis of the information received from the Office of Director General of Income Tax (Inv.), Mumbai wherein it was conveyed that the assessee has taken the bogus purchase entry of Rs.5,67,884/- from the following eight parties which is hereby mentioned as under: - S. No. Name of the party Amounts 1 Surachi Multitrade Pvt. Ltd. Rs.46,969 2 Bright Corporation Rs.45,788 3 Anshu Mercantile Pvt. Ltd. Rs.52,060 4 Dhirern Mercantile Pvt. Ltd. Rs.56,700 5 Sachi Mercantile Pvt. Ltd. Rs.77,557 A.Y.2009-10 6 Cimco Corporation Rs.41,760 7 Anil Trading Co. Rs.94,106 8 Mahavir Enterprises Rs.1,52,944 Total Rs.5,67,884 In the instant case, the AO issued the notices to the parties u/s 133(6) which were not served by the Postal Authorities with the remark „Not known‟. After the reply of the assessee, 25% of the bogus purchase of Rs.5,67,884/- which comes to 1,41,971/- was added to the income of the assessee. The total income of the assessee was assessed in a sum of Rs.3,87,910/-. Feeling aggrieved, the assessee filed an appeal before the CIT(Appeals) who restricted the addition to the extent of 12.5%. The Revenue was not satisfied, therefore, filed the present appeal before us.
We have heard the argument advanced by the Ld. Representative of the Revenue and perused the record. Before going further, we deemed it necessary to advert the finding of the CIT(A) on record: - “7. I have carefully gone through the above submissions made by the appellant and the facts mentioned in the assessment order.
7.1 A sum of 25% of total purchase of Rs.5,67,884/- has been disallowed on the basis of information from the Sales Tax Department and for the reason that the notice under section 133(6) was returned by the Postal department.
7.2 The CIT(A)- 38 vide order dated 23.08.2017 in case of appellant itself for AY 2010-11 & AY 2011-12 had elaborately examined the addition made by the AO @ 25% of total purchase based on information from Sales Tax Department. The CIT(A) has A.Y.2009-10 finally sustained addition @ 12.5 % of total purchase from the hawala parties.
7.3 The issue and facts of the present appear for AY 2009-10 in case of the appellant are similar as in AY 2010-11 & AY 2011-12 and I do not find any reasons to deviate from the findings given by the CIT(A)-38 in those two assessment years. Considering the totality of facts, I am of the view that an additional profit of 12.5 % of purchase from the hawala parties should be added to the total income of the appellant and hence the same is sustained. Balance addition is deleted. In view of above, addition of Rs.70,985/- being 12.5% of Rs.5,67,884/- is sustained and balance addition of Rs.70,986/- is hereby deleted.”
On appraisal of the above mentioned finding, we find that the CIT(Appeals) has decided the matter of controversy on the basis of the decision of Gujarat High Court in the case of CIT vs. Simit P. Sheth 355 ITR 290 (Guj.), Hon‟ble Gujarat High Court in the case of CIT Vs. Bholanath Poly Fab Pvt. Ltd. reported in 355 ITR 290 (Guj), Vijaya Protein Vs. CIT 58 ITD 428 (Ahd). In the said mentioned law, it is well- settled that the profit ratio embedded to the transaction is required to be added to the income of the assessee. In the instant case, sale is not doubted, therefore, the CIT(A) has restricted the addition to the extent of 12.5% of the total bogus purchase in sum of Rs.5,67,884/-. Taking into account, all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, we upheld the finding of A.Y.2009-10 the CIT(A) on this issue and decide these issues in favour of the assessee against the revenue.