PRAVINA RUPAREL,MUMBAI vs. ITO 7(3)(3), MUMBAI

PDF · subscribers
ITA 7424/MUM/2014Status: DisposedITAT Mumbai20 June 2016AY 2010-115 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to make a disallowance of 5% of the purchases. This was a compromise after the assessee suggested a reasonable disallowance instead of remanding the matter.

What were the facts?

The assessee claimed purchases of Rs. 6,84,23,238/- for export business. The Assessing Officer disallowed Rs. 13,30,097/- as bogus purchases based on information from the Sales Tax Department.

What were the issues?

Whether purchases claimed by the assessee were genuine, and if not, what disallowance is appropriate. The issue also involved the applicability of a High Court decision and the opportunity for cross-examination.

Which sections of the Income-tax Act were involved?

Section 69C

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show 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.

Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI

Before: Shri Joginder Singh,

For Appellant: Shri D.C. Jain, Shri Om Prakash Meena-DR
Hearing: 20/06/2016

आदेश / O R D E R The assessee is aggrieved by the impugned order dated 03/11/2014 of the Ld. First Appellate Authority, Mumbai, challenging the confirmation of addition of Rs.1,33,00,97/- made by the Assessing Officer u/s 69C of the Income Tax Act, 1961 (hereinafter the Act) being peak amount purchases stated to be bogus purchases as per information from Sales Tax Department.

2.

During hearing of this appeal, Shri D. C. Jain, ld. counsel for the assessee, contended that the impugned issue is covered by the decision from Hon’ble Bombay High Court in the case of CIT vs Nikunji/Exim Enterprises Pvt. Ltd. (372 ITR 619)(Bom.). However, the ld. DR, Shri Om Prakash Meena, contended that facts in the case before Hon’ble High Court are different, therefore, the ration laid down therein is not applicable to the facts of the present assessee. In reply, the ld. counsel for the assessee, contended that considering the facts of the present appeal, some reasonable disallowance may be made, which may be to the extent of 5% of the purchases. The ld. DR had no objection to the proposition made by the ld. counsel for the assessee.

1.

2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is an individual, deriving income from salary carrying on proprietary business under the name and style of M/s Supreme Enterprises, engaged in the business of buying of chemical from market and export outside India. The assessee filed her return of income on 22/09/2010, declaring total income at Rs.19,47,618/-. The scrutiny assessment u/s 143(3) was completed on 25/03/2013 determining the income at Rs.31,94,480/- by making an addition of Rs.13,30,097/-, stating to be bogus purchases, u/s 69C of the Act. On appeal, before the Ld. Commissioner of Income Tax (Appeal), the stand taken in the assessment order was confirmed. The aggrieved assessee is in appeal before this Tribunal. We find that the assessee claim to have made purchases to the tune of Rs.6,84,23,238/- from various parties and exported the same out of India. The ld. Assessing Officer received information from the Maharashtra Sales Tax Department that certain persons have given bogus bills for the purchases. On verification of the list, it was found that the following suppliers were found to be suspicious/bogus by the Sales Tax Department.

Sl. Name of the parties Amount of purchases (In No. Rupees) 1 M/s Shree Ganesh Trading 14,06,080/- Company 2 M/s Manav Iimpex 1,16,73,813/- 3 M/s Mahavir Enterprises 3,66,080/- 4 M/s Shreyas Marketing 7,03,040/- We find that against the claimed purchases of Rs.6,84,23,238/-, the ld. Assessing Officer has disallowed the purchases to the tune of Rs.13,30,097/- u/s 69C of the Act by treating the same as bogus purchases. Assessee declared total sales (exports) to the tune of Rs.7,28,26,335/-. The stand of the assessee is that when sale has been accepted then purchases also have to be accepted. In the light of the decision from Hon’ble jurisdictional High Court (supra), we find that the assessee wants to take the shelter of the aforesaid decision without explaining the facts, because, wherever, the ld. Assessing Officer found the purchases within the parameter, the same were allowed. Even otherwise, the assessee has not proved that the purchases were 100% genuine. Other argument taken before us is that proper opportunity was not provided to the assessee to cross examination the parties from whom purchases were claimed to be made. The Bench asked the ld. counsel for the assessee whether the matter can be sent back to the file of the Assessing Officer so that opportunity may be provided to the assessee. The ld. counsel requested the Bench that the matter may not be sent back and a reasonable disallowance may be made. Considering the totality of facts, material available on record, reasoning contained in the assessment order/impugned order and the assertions made from both sides, we direct the ld. Assessing Officer to make disallowance of 5% of the purchases made by the assessee, thus, the appeal of the assessee is partly allowed.

Finally, the appeal of the assessee is partly allowed.

This order was pronounced in the open in the presence of ld. representative from both sides (and accepted by them) at the conclusion of the hearing on 20/06/2016.

More judgments on Section 69C

All 8,217 judgments and leading authorities on Section 69C →

Recent GST High Court judgments

Search GST case law →