ASST. CIT 6 (2)(1), MUMBAI vs. M/S CATWALK WORLD WIDE PVT LTD., MUMBAI

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ITA 5696/MUM/2019Status: DisposedITAT Mumbai18 March 2021AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance to 12.5% of the bogus purchases. The assessee had provided purchase invoices, ledger accounts, stock register, and bank statements.

What were the facts?

The Assessing Officer added Rs. 6,13,276 as bogus purchases made from hawala parties. The CIT(A) restricted this disallowance to 12.5% of the amount.

What were the issues?

Whether the disallowance of bogus purchases should be 100% or a reduced percentage when the assessee has provided supporting documents.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

For Appellant: Ms. Shreekala Pardeshi
Hearing: 18.03.2021

O R D E R Per Mahavir Singh, VP: This appeal by the Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)-12, Mumbai (‘CIT(A)’ for short) in appeal no. CIT(A)-12/DCIT- 6(2)(1)/57/2016-17 vide order dated 15.05.2019. The assessment was framed by the DCIT, Circle-6(2)(1), Mumbai u/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2010-11 vide his order dated 23.03.2016.

2.

The only issue in this appeal of the Revenue is against the order of the ld. CIT(A) restricting the disallowance of bogus purchase at 12.5%. For this, the Revenue has raised the various grounds, which we need not reproduce for the sake of brevity.

3.

We have heard the rival contentions and gone through the facts and circumstances of the case. We note that the Assessing Officer (A.O. for short) during the course of assessment proceedings noticed that the assessee has debited bogus purchases of Rs.8,38,703/- from the following hawala parties:

1.

(AY:2010-11) Asst. CIT vs. M/s. Catwalk World Wide Pvt. Ltd. Sr. Name of the PAN Amount of the bogus No. assessee purchases (Rs.) 1 Kwality Enterprises AAAPZ 0527 H 2,25,427 2 Naina Impex CDKPS 9910 A 2,44,63 3 Karmic Trading Co. ASFPK 2629 G 3,68,639 Total 8,38,703

4.

As the amount of Rs.2,25,427/- in the case of Kwality Enterprises was added back, vide the assessment order dated 18.03.2013, this amount was not added and the balance amount of Rs.6,13,276/- was added as bogus purchases.

5.

Aggrieved, the assessee preferred an appeal before the ld.CIT(A). The ld. CIT(A) restricted the disallowance of bogus purchase at 12.5% of Rs.6,13,276/- and worked out the addition at Rs.76,660/-.

6.

Aggrieved, the Revenue is now in appeal before us. We note that the assessee before the A.O. as well as before the ld. CIT(A) and even now before us contended that it has filed copies of purchase invoices, ledger account of parties, stock register and also the bank statement showing each and every payment of purchases. It was claimed by the assessee that non production of transportation bill cannot be the reason for making the addition of bogus purchase. We note that all these details were produced which are uncontroverted. Once this is the position, we are of the view that the ld. CIT(A) has rightly restricted the disallowance of 12.5% on the bogus purchase. Hence, we confirm the same.

7.

In the result, the appeal filed by the Revenue’s is dismissed.

Order pronounced in the open court on 18.03.2021.

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