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Income Tax Appellate Tribunal, “L” BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI SANDEEP GOSAIN, JM
सुनवाई की तायीख/ : 19/09/2017 Date of Hearing घोषणा की तायीख/ : 20/09/2017 Date of Pronouncement आदेश / O R D E R
Per Sandeep Gosain, Judicial Member:
The present two Appeals have been filed by the revenue against the order of Commissioner of Income Tax (Appeals)- 18, Mumbai, dated 4.06.2015 for A.Y. 2009-10 & 2011-12 respectively.
2 & 6236/Mum/2016 Sukan Engineering Pvt. Ltd. 2. Since the issues raised in these two appeals are identical, therefore, for the sake of convenience, these two appeals are clubbed, heard and disposed of by this consolidated order.
I.T.A. No. 6235/Mum/2015 (AY 2009-10) 3. First of all we take up revenue’s appeal in (AY 2009-10).
4. The only issue in this appeal of the Revenue is in respect of restricting the disallowance to 4 % of Gross Profit on the purchases which were treated as bogus by the Assessing Officer. Briefly stated the facts are that the Assessing Officer while completing the assessment disallowed Rs.3,54,88,488/- being the purchases from seven parties referred to in the assessment order treating them as bogus purchases based on the information obtained from the sale tax department. The Assessing Officer concluded that the parties have provide only accommodation bills to the assessee and assessee made no purchase from these parties and assessee has made purchases in the grey market, therefore the purchases recorded from these parties are all bogus. The Ld.CIT(A) restricted the disallowance by estimating the Gross Profit on such purchases at 4% after considering the facts of the case, against which the revenue is in appeal before us.
3 & 6236/Mum/2016 Sukan Engineering Pvt. Ltd. The Learned Counsel for the assessee strongly relied on the orders of the Ld.CIT(A). The Ld.DR strongly placed reliance on the order of the Assessing Officer.
We have heard the counsels for both the parties and also perused the documents as well as the orders passed by lower authorities. The Ld. AR submitted that the identical grounds have already been decided by the Coordinate Bench of Hon’ble ITAT in for AY 2010-11 in assessee’s own case. The relevant portion is reproduced below:- 4. We have heard the rival submissions, pursed the orders of the authorities below. The Ld.CIT(A) restricted the addition on account of Gross Profit on purchases to 1% after considering various contentions of both, the Assessing Officer as well as the assessee and also the information produced before him and the remand report by A.O. He concluded that the entire purchases made cannot be treated as bogus purchase and estimated Gross profit on such purchases at 1% by observing as under: - Keeping in view the facts & circumstances and the decisions of hon'ble courts, it/s held that the A. 0. has treated the purchases as bogus in case of M/s. Poisons Sales Agency Pvt. Ltd., MIs. Balaji Marketing Pvt. Ltd. and MIs. Volcano Trading Pvt. Ltd. only on the basis of list of ha wa/a dealers given by Sales-tax Department & statement of Shri Mahendra Dhaba/ia recorded by the Sales-tax authorities. But, on the other hand, the documentary evidences submitted by the AR i.e. confirmations from the parties, copy of bank statement, balance-sheet, copy of I. T. Return acknowledgements, PAN, complete quantitative details showing sales against every purchases and all payments through account payee cheques and affidavits of all parties confirming purchases/sales were ignored without rejecting them. The hon'ble
4 & 6236/Mum/2016 Sukan Engineering Pvt. Ltd. jurisdictional High Court in case of C/T Vs. Nikunj Imp Enterprises Pvt. Ltd. has clearly held that only on the basis that the suppliers were not produced before the A. 0. and C/T(A ) one cannot conclude that the purchases were bogus. The hon`ble Mumbai Tribunal in case of Jitendra Harshadkumar Textiles Vs. ITO has also held that there was no material on record to say that the purchases made by the assessee from the said concerns were bogus except the general statement recorded by tht Department in the case of Rajesh Kumar Gupta. In absence of any m terial brought on record against the submissions made by Shri Rakesh Kumar Gupta, the addition if any made in case of the assessee will be based on presumptions only and it cannot be sustained in the eyes of law. totality of facts & circumstances, it is held that the addition made by the A.O. is only based on list of hawala dealers provided by the Sales-tax Department which is not corroborated by any documentary evidence, but, on the other hand, the appellant has submitted complete documentary evidences along with quantitative details of the purchases and sales made which are not rejected by the A. 0., therefore, the addition made by the A. O. is held based only on suspicion, surmises and conjectures which is not sustainable. However, it is noticed that the gross profit on these purchases has been shown less as compared to book results of this year and earlier years. Therefore, as per the decision of honsble Gujarat High Court in case of DCIT Vs. Panna Corporation (supra) where it is held that not complete purchases, but, profit element has to be added back. It is concluded that 1% of gross profit on the purchase of Rs. 90,90,785/- is further added back which is shown less in the books of account, it comes to Rs. 90,908/- is upheld and balance addition is deleted. Ground of appeal is partly allowed.
5. The findings of the Ld.CIT(A) could not be rebutted by the Revenue with the evidences. Therefore, we agree with the view of the Ld.CIT(A) that the entire purchases cannot be treated as bogus purchases for various reasons and findings given by him. The jurisdictional High Court in the case of CIT v. Nikunj Imp Enterprises Pvt. Ltd held that entire purchases cannot be treated as bogus. Therefore, on a careful consideration of the findings we do not find any valid reasons to interfere with the findings and After having heard the counsel for the parties at length, we find that Ld. CIT(A) while deciding these grounds had restricted the additions while taking into consideration the gross profit shown by the assessee and moreover the identical question involved in the present case has already been decided by the coordinate bench of ITAT Mumbai in assessee’s own case. Therefore respectfully following the decision of the coordinate bench and in order to maintain judicial consistency which is applicable mutatis mutandis in the case of the assessee. We dismiss this appeal of revenue.
In the net result, the appeal filed by the revenue stands dismissed.
I.T.A. No. 6236/Mum/2016 (AY 2011-12) 6. Now we take up revenus’s appeal in (AY 2011-12). Since, we have already decided the identical grounds raised in this appeal, in the aforementioned appeal bearing AY 2009-10, therefore, based on our findings on the similar ground in the aforementioned appeal, we dismiss this appeal as well.
Sd/- Sd/- (Rajendra) (Sandeep Gosain) रेखा सदस्म / Accountant Member न्मायमक सदस्म / Judicial Member भुंफईMumbai;ददनांकDated : 20.09.2017 Sr. PS. Dhananjay आदेश की प्रनिलऱपि अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent 2. आमकय आमुक्त(अऩीर) / The CIT(A) 3. आमकय आमुक्त / CIT- concerned 4. ववबागीम प्रयतयनधध,आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5. गार्ड पाईर / Guard File 6. आदेशधिुसधर/BY ORDER,