ITO WD 1(1), KALYAN vs. ALPESH SURESH JAIN, BHIWANDI

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ITA 1062/MUM/2017Status: DisposedITAT Mumbai20 September 2017AY 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 order of the CIT(A) which had partly allowed the appeal. The CIT(A) had sustained a disallowance of 15% of the alleged hawala purchases, deleting the balance amount.

What were the facts?

The Assessing Officer disallowed purchases made from certain parties, considering them bogus as the parties could not be verified and did not comply with notices. The assessee was engaged in the business of trading of scraps and job work.

What were the issues?

Whether the disallowance of purchases made from unverified parties is justified, and if so, to what extent.

Which sections of the Income-tax Act were involved?

Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI

Before: D.T. GARASIA & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri S.M. Makhija, A.R
For Respondent: Shri Saurabh Deshpande, D.R
Hearing: 23.08.2017Pronounced: 20.09.2017

Per D.T. GARASIA, Judicial Member:

1.

The present appeal has been preferred by the Revenue against the order dated 30.11.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2010-11.

2.

The brief facts of the case are that the assessee is an individual engaged in the business of trading of scraps & job work on P.L. During the year the Assessing Officer (hereinafter referred to as the AO) found that assessee had made bogus purchases from following parties:

2 Shri Alpesh Suresh Jain Sr. Name of the party Amount of bill No. A.Y. 10-11 A.Y. 11-12 1. Sampark Steels Rs.22,15,543/- - 2. Prayan Trading Co. Rs.15,93,329/- - 3. Vitarag Trading Co. Rs.21,90,165/- - 4. Sairam Trading Corp. - Rs.4,96,475/- 5. Laxmi Trading Co. - Rs.9,66,147/- 6. Manibhadra Metal Industries - Rs.12,67,802/- 7. Total Rs.59,99,037/- Rs.37,30,424/-

3.

The assessee was asked to produce the above parties for verification. There was no compliance of notice under section 133(6). Therefore, the AO has made the addition on account of bogus purchases.

4.

Matter carried to the Ld. CIT(A) and the Ld. CIT(A) has partly allowed the claim by observing as under: “8.13 From these facts it is proved that the appellant might have affected the purchases from the grey markets (which are not open for verification) and procured the bill from above hawala parties. Therefore, relying on the ratio led down by Hon’ble Haipur ITAT, the disallowance @ 15% of the hawala purchases, in this case, will be a logical course. Accordingly, the disallowance @ 15% of Hawala purchases is worked out at Rs.8,99,856/- (15% of Rs.59,99,037/-) for AYr 2010-11 & Rs.5,59,564/- (15% of Rs.37,30,424/-) for AYr 2011-12. Keeping in view the above facts, the disallowances to the extent of Rs.8,99,856/- & Rs.5,59,564/-, in these years, are sustained and balance amounts of Rs.50,99,180/- & Rs.31,70,860/-, respectively, are deleted. Both the grounds of appeal are disposed off accordingly.”

5.

We have heard the rival contentions of both the parties. We find that the issue in controversy is already covered by the decision of the Tribunal in the own case of the assessee for A.Y. 2011-12 in ITA No.1063/M/2017. Applying the same ratio followed in the above cited case, we find no justification to interfere with the order

6.

In the result, departmental appeal is dismissed. Order pronounced in the open court on 20.09.2017.

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