ASST CIT CIR 6(2)(2), MUMBAI vs. EXIM TRADE LINKS (INDIA) P.LTD, MUMBAI
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12.5% of the alleged bogus purchases. The revenue failed to provide any grounds to deviate from the CIT(A)'s findings.
What were the facts?
The Assessing Officer (AO) added the entire amount of alleged bogus purchases to the assessee's income. The CIT(A) restricted this addition to 12.5% of the purchase amount, citing various judicial precedents and the assessee's submission of supporting documents.
What were the issues?
Whether the addition for bogus purchases should be the entire amount or a percentage, and whether the CIT(A) correctly applied judicial precedents in restricting the addition.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(16)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Reliance Utilities & Power Ltd.2,118 citing178 Taxmann 135 · 2009 · HC
- Kishanchand Chellaram v. CIT962 citing125 ITR 713 · 1980 · SC
- CIT v. Nikunj Exim Enterprises Pvt. Ltd.391 citing372 ITR 619 · 2015 · HC
- CIT v. M.K. Brothers262 citing163 ITR 249 · 1987 · HC
- Babulal C. Borana v. ITO138 citing282 ITR 251 · 2006 · HC
- Balaji Textiles Industries Pvt Ltd. v. ITO53 citing49 ITD 177 · 1994 · ITAT
- Nikunj Eximp Enterprises (P.) Ltd. v. CIT49 citing220 Taxmann 17 · 2014 · HC
- Munjal Sales Corpn v. CIT44 citing168 Taxmann 43 · 2008 · SC
- West Coast Paper Mills Ltd. v. Jt. CIT37 citing100 TTJ 833 · 2006 · ITAT
- Yatish Trading Co. (P.) Ltd. v. Asstt. CIT33 citing129 ITD 237 · 2011 · ITAT
- Commissioner of Income-tax-9, Mumbai v. Teletronics Dealing Systems (P.) Ltd.23 citing53 Taxmann.com 20 · 2015 · HC
- Free India Assurance Services Ltd. v. DCIT21 citing132 ITD 60 · 2011 · ITAT
- 522 and UNITEX PRODUCTS LTD. v. ITO20 citing22 SOT 429 · 2008 · ITAT
- ITO v. Strides Arcolab Ltd.13 citing24 Taxmann.com 89 · 2012 · ITAT
- Power Ltd. (2009) 178 Taxman 135 (Bom) 3. Yatish Trading Co. (P) Ltd. v. ACIT7 citing138 ITD 323 · 2012 · ITAT
- 13 DTR 983 citing13 DTR 98
Income Tax Appellate Tribunal, “J”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM
आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the revenue against the order of CIT(A)- 12, Mumbai dated 01/12/2016 for A.Y. 2009-10 in the matter of order passed u/s.143(3) of the IT Act. 2. The following grounds have been taken by the revenue:- 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming 12.5% only of the amount of Rs.56,56,092/- added u/s 69C of the Act, on account of bogus purchase and deleting the balance
2. "On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that during the course of the assessment proceedings the assessee failed to furnish various details called for by the AO, that is whether parties from whom the above purchases were made were genuine and existed and were not mere entry providers, as recorded by the A.O. in para 6.9 of the order.
M/s. Exim Trade Links (India) Pvt. Ltd.,
3. "The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside to the file given facts of the case." : 4 "The appellant craves leave to amend or alter any ground or add a new ground which may be necessary."
Rival contentions have been heard and record perused.
Facts in brief are that on the basis of information from sales tax department, the AO added entire amount of alleged bogus purchases amounting to Rs.56.56 lakhs. 5. By the impugned order, CIT(A) restricted the addition to the extent of 12.5% after having the following observation:- I have carefully perused the assessment order and the appellant's written submission. During the course of appellate hearing, that the appellant submitted all ledger accounts of the conceited parties, sale and purchase bills, delivery challans, details of transportation, the supporting vouchers and copy of bank statements. It is seen that nothing has been brought out on record by the A.O. to prove that the purchases are bogus. The A.O. is also ignoring, the fact that corresponding sales have been reflected in the books and A.O. has not negated this finding. Reliance is placed on the following judicial decisions of Hon. Apex Court, Hon. Gujarat High Court, Hon. Mumbai High Court and Hon. Mumbai IT AT wherein the Hon. High Courts, Hon. IT AT and Hon. Supreme Court has opined and deleted the additions in cases of bogus purchases :
1. 1. Munjal Sales Corpn Vs CIT (2008) 168 Taxman 43 (SC) 2. CIT Vs Reliance Utilities & Power Ltd. (2009) 178 Taxman 135 (Bom) 3. Yatish Trading Co. (P) Ltd. Vs. ACIT (2011) 129 ITD 237/9 taxrnann.com 164 (Mum) 4. ITO Vs Strides Arcolab Ltd. (2012) 138 ITD 323/24 taxmann.com 89(Mum) 5. Morgan Stanley India Securities P. Ltd. Vs ACIT in IT AT, Mumbai.
6. Four Dimensions Securities (India) Ltd. Vs Addl.CIT in ITA No. 0693/M/2011ITAT, Mumbai 7. Kodak India (P) Ltd. Vs AddL CIT (IT Appeal no. 7349/Mum/2012 dated 30/4/2013) 8. ACIT 11(2) Vs. Iqbal M. Chagala, Palloni Mansion' ITA no. 877/Mum/2013, ITAT, Mumbai
M/s. Exim Trade Links (India) Pvt. Ltd.,
Hon. Mumbai High Court decision in the case of Babulal C. Borana Vs ITO (2006) 282 ITR 251.
Hon. Gujarat High Court decision in case of CIT Vs MX Bros (1987) 163 ITR 249 11. Hon. Gujarat High Court decision in case of CIT Vs Nangalia Fabrics P. Ltd. (2014) 220 Taxman 17 12. Hon. Mumbai ITAT judgment date 17.6.2016 in the case of M/s. Om Shree International Vs ACIT in and ITA No. 4575/M/2012. 13. Kishanchand Chelaram Vs. CIT-125 ITR 713-SC. 14. H.R. Mehta Vs ACIT in ITA No.58 of 2001 (Bom) 15. CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. [372 ITR 619 (Bom)2015] 16. ACIT Vs. Ramila Pravin Shah (ITA I fo.5246/Mum/2013) 17. ACIT Vs.Tristar Jewellery Exports Pi. Ltd. (ITA No.7593/Mum/20ll) 18. ITO Vs. Deepak Popatlal Gala (I A No.5920/Mum/2013 and ITA No.6203/Mum/2013) 19. DCIT Vs.Rajiv G.Kalathil (ITA No.6,27/Mum/2012/RGR 20. Ramesh Kumar & Co. Vs. ACIT in ITA No.2959/MUM/2014 dt.28.11.2014. 21. Shri.Ganpatraj A.Sanghavi Vs. ACIT. in ITA No.2826/Mum/2013 dt.5.11.2014. 22. West Coast Paper Mills Vs.JCIT[100 TTJ 833(Mum)] 23. ITOVs.A.CExport[13DTR98(Mum) 24. Unitex Products [22 SOT 429(Mum)], • 25. Teletronics Dealing System Pvt, Ltd. 53 Taxmann.com20(Mum)]. 26. Free India Assurance Services Ltd. Vs. DCIT(132 ITD 60) Mumbai Tribunal. 27. Balaji Textiles Industries Pvt. Ltd.[49 ITD 177 (Mum).] Perusal of the appellant's written submission shows that the appellant has stated in Para 4 Page 9 as under;- "The appellant would also like to submit that at, per order u/s.l43(3) r.w.s.147 of the Income Tax Act, 1961 for A.Y. 2008-2009, the Ld. AO. has disallowed on alleged hawala purchases to the extent of 12.5% of the total purchase ,amount i.e. Rs.46,45,760/-. 12.5% is\ the proportion of additional profit on unapproved/non genuine purchases and added to the total income returned. Thus Without prejudice, following the principle of consistency, disallowance for above referred assessment year should be taken at 12.5% of the total purchase amount i.e. Rs.56,56,092/-," So the A.O. is directed to disallow only 12.5% of Rs.56,56,092/- as bogus purchases. Ground of Appeal No.l is partly allowed.
6. Against the above order of CIT(A), revenue is in further appeal before us.
M/s. Exim Trade Links (India) Pvt. Ltd.,
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