CIT v. Simit P. Sheth

Akash Purochem P.Ltd, Mumbai vs. ITO 10(2)(1), Mumbai

In the result, the appeal is partly allowed

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2011-12 Akash Purochem Pvt. Ltd. Income Tax Officer- 1/5, Kandhari Colony, 2Nd 10(2)(1), Aayakar Vs. Road, Chembur, Mumbai- Bhavan, M.K. Marg, 400071. Churchgate, Mumbai. Pan No. Aacca9261A Appellant Respondent Assessee By : Mr. Sanjay Parikh, Ar Revenue By : Mr. Anoop Hiwase, Dr Date Of Hearing : 09/05/2018 Date Of Pronouncement : 16/05/2018

…rochem Pvt. Ltd. 5 consumption/sales and closing stock of materials. Payment for these purchases were also made by account payee cheques which is not disputed. Considering the above facts, the Ld. CIT(A), following the decision in CIT v. Simit P. Sheth (2013) 356 ITR 451 (Guj) directed the AO to estimate profit @ 12.5% on the bogus purchases of Rs.15,65,241/. 6. Before us, the Ld. counsel of the assessee submits that the appellant had in the first instance requested the AO to give them an opportunity to cross-examine these parties. However, the AO has without affording an opportunity to the appellant to cross-exa…

DCIT Cen Cir 1(4), Mumbai vs. Arya Ship Breaking Corportion, Mumbai

…ed the various theories propounded by the judicial forums and referred to the cases of Nikunj Eximp Enterprises Private Limited(IT Appeal No.5604 of 2010 dtd.17.12.2012),Babulal C Borana,M K Brothers(163 ITR 249),Bholanath Poly Fab (355 ITR 290),Simit P Sheth(356 ITR 451) and Rajeev G Kalathil(51taxmann.com 514).She further held that the AO had accepted the sales made by the assessee,that purchase sale correlation had not been controverted by the AO,that no discrepancy in the stock was pointed out, that the payments made for the purchases were routed through banking channels, that the extracts of the statements f…

S. Gupta & Co., Jaipur vs. ITO 12(2)(1), Mumbai

In the result, this appeal filed by the assessee stands partly allowed

Bench: Shri Shamim Yahya, Am & Shri Ram Lal Negi, Jm आयकर अपील सं./I.T.A. No. 2949/Mum/2016 ("नधा"रण वष" / Assessment Year: 2007-08) M/S. S. Gupta & Co. Income Tax Officer, Ward-12(2)(1), बनाम/ Metro House, 2Nd Floor, Mumbai M. G. Road, Mumbai-400 020 Vs. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafs 4486 L (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Shri S. L. Poddar ""यथ" क" ओर से/Respondent By : Shri V. Justin

…Dealings in the grey market give the assessee various savings at the expense of the Exchequer. Hence, on the overall consideration of facts and circumstances and following the decision of Hon’ble Gujarat High Court in the case of CIT vs Simit P. Sheth [2013] 356 ITR 451 (Guj.) we hold that a disallowance of 12.5% of the bogus purchase would meet the end of justice. Accordingly, we modify the order's of authorities below and direct that the disallowance in this case should be restricted to 12.5% of the bogus purchase. 16. In the result, this appeal filed by the assessee stands partly allowed. Order pronounced in…

Sanjay Lalchand Batthija, Mumbai vs. Income Tax Officer Ward-2(4), Kalyan

In the result, the appeal Assessee is partly allowed

Bench: Sri Mahavir Singh

…. Hence, I am in full agreement with the argument of the learned Counsel for the assessee and according to me a profit rate of 12.5% will meet the end of justice in view of the decision of Hon’ble Gujarat High Court in the case of CIT vs. Smith P. Seth (2013) 356 ITR 451 (Guj). The appeal of the assessee is partly allowed. 4. In the result, the appeal Assessee is partly allowed. Order pronounced in the open court on 14-05-2018. AadoSa kI GaaoYaNaa Kulao mao idnaMk 14.05.2018 kao kI ga[- . (MAHAVIR SINGH) JUDICIAL MEMBER Mumbai, Dated: 14-05-2018 Sudip Sarkar /Sr.PS Copy of the Order forwarded to: 1. The Appell…

Jitendra Shivjibhai Patel, Mumbai vs. Income Tax Officer 27(1)(5), Mumbai

In the result, the appeal of the appellant is partly allowed

Bench: Sri Mahavir Singh

…ssessee. Aggrieved, assessee preferred the appeal before CIT(A), who estimate the disallowance at 12.5% of the bogus purchases by observing in para 5.3.5 and by following the decision of 4 Hon’ble Gujarat High court in the case of CIT vs. Smith P. Seth (2013) 356 ITR 451 (Guj) by observing as under: - “5.4.5 In View of the facts and circumstances of the case and the judicial pronouncements cited above, what can be disallowed or taxed in the instant case, is the excess profit element embedded in such purchases shown to have been made from aforesaid parties. As narrated earlier, the AO in this case has held that t…

Ryan Paul Martin, Mumbai vs. Income Tax Officer Ward 22(3)(2), Mumbai

In the result, the appeal Assessee is partly allowed

Bench: Sri Mahavir Singh

…and boards. Admittedly, these parties are in hawala parties and the assessee is unable to bring movement of goods i.e. transportation of goods for purchase of these items. I find that the Hon’ble Gujarat High Court in the case of CIT vs. Simit P Sheth [2013] 356 ITR 451 (Gujarat) has upheld the disallowance at 12.5% on bogus purchases. Admittedly, the assessee has obtained accommodation bills for purchase made from grey market for the purpose that assessee has saved 5 to 6% of Vat and purchase made from grey market at a lower profit rate. It means that the assessee has saved to the extent of ₹ 12.5%. It means th…

Jitendra D. Shah, Mumbai vs. Income Tax Officer 27(1)(5), Mumbai

In the result, the appeal Assessee is partly allowed

Bench: Sri Mahavir Singh

…s that the assessee has earned a higher profit on these bogus purchases. Accordingly, I am of the view that the assessee might have made profit at the rate of 8%. In similar circumstances, Hon’ble Gujarat High Court in the case of CIT vs. Smith P. Seth (2013) 356 ITR 451 (Guj) restricted the disallowance at 12.5% of the bogus purchases by estimating the profit rate at 12.5%. I am of the view that assessee is engaged in the business of Iron and steel, which give little profit. 7 Accordingly, I estimate the profit rate at the rate of 8% and direct the AO to compute the income after applying the profit rate at the…

Mokalsar Steel Private Limited, Mumbai vs. Income Tax Officer 5(2)(3), Mumbai

In the result, the appeal Assessee is partly allowed

Bench: Sri Mahavir Singh

…serving in Para 6.3.48 by making 100% addition as under: - “6.3.48 For AYs 2011-12, as held by the Hon’ble High Court of Gujarat in the case of Commissioner of Income Tax vs. Bholanath Poly Fab Pvt. Ltd. (2013) 355 ITR 0290 (Guj) & CIT v. Simit P Sheh (2013) 356 ITR 451 (Guj HC), not the entire purchase price but only profit element embedded in such purchases can be added to the income of the assessee. However, the details of payments made for purchases during AY 2011-12 have not been brought on record, on the contrary the alleged dealer i.e. M/s Mona Metals has been shown as Sundry Creditor in the financial sta…

Mubarak Hussain Shaikh, Mumbai vs. Income Tax Officer, Ward 26(3)(4), Mumbai

In the result, the appeal Assessee is partly allowed

Bench: Sri Mahavir Singh

…hat the assessee has earned a higher profit on these bogus purchases. Accordingly, I am of the view that 4 the assessee might have made profit at the rate of 10%. In similar circumstances, Hon’ble Gujarat High Court in the case of CIT vs. Smith P. Seth (2013) 356 ITR 451 (Guj) restricted the disallowance at 12.5% of the bogus purchases by estimating the profit rate at 12.5%. I am of the view that assessee is engaged in the business of procession of Iron washers, which give little profit. Accordingly, I estimate the profit rate at the rate of 10% and direct the AO to compute the income after applying the profit ra…

Tejraj Manroop Chand Tak, Mumbai vs. Income Tax Officer 18(3)(4), Mumbai

Bench: Shri R. C. Sharma, Am & Shri Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 6769/Mum/2017, (निर्धारणवर्ा / Assessment Year: 2011-12)

…IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI R. C. SHARMA, AM & SHRI SANDEEP GOSAIN, JM आयकरअपीलसं./ I.T.A. No. 6769/Mum/2017, (निर्धारणवर्ा / Assessment Year: 2011-12) Shri Tejraj Manroop Chand ITO RG 18(3)(4) Tak, Bandra Kurla Complex, बिधम/ 234-B, Agrawal Building, 1st Bandra East, Floor, Room No. 6-7, Mumbai-400 051 Vs. Thakurdwar Road, Mumbai-400 002 स्थायीलेखासं./जीआइआरसं./PAN/GIR No. ADQPT2755C (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Shri Vimal Punmiya प्रत्यथीकीओरसे/Respondentby : Ms. N. Hemalata सुनवाईकीतारीख/ : 08/02/2018 Date of Hearing घोषण…

Ashok K. Shah, Mumbai vs. Income Tax Officer 31(1)(2), Mumbai

The appeal of the assessee is partly allowed

Bench: Shri Joginder Singh & Shri G. Manjunathaassessment Year: 2009-10 Asok K. Shah, Income Tax Officer-31(1)(2), C-25, Sai Baba Enclave, Mumbai, बनाम/ S.V.Road, Vs. Goregaon West, Mumbai-400062 ("नधा"रती /Assessee) (राज"व /Revenue) P.A. No.Akeps3501N

…s aggrieved by the impugned order dated 21/09/2017 of the Ld. First Appellate Authority, Mumbai, in restricting the addition to 12.5% of the bogus purchases amounting to Rs.9,60,825/- following the decision from Hon'ble Gujarat High Court in Simit P. Seth 356 ITR 451, without appreciating the fact that the assessee maintained a stock register and shown full nexus of purchase and sale. 2. During hearing, the Ld. counsel for the assessee, Shri Divyesh P. Jain, advanced arguments, which is identical to the ground raised. On the other hand, Ms. N. Hemalatha, defended the addition by inviting our attention to…

ACIT Cir. 1, Kalyan vs. Thakor Electronic Ltd., Bhiwandi

In the result, the appeal filed by the assessee stands partly allowed and the appeals filed by the Revenue stands dismissed

Bench: Shri Shamim Yahya, Am & Shri Ram Lal Negi, Jm आयकर अपील सं./I.T.A. No. 6427/Mum/2016 ("नधा"रण वष" / Assessment Year: 2009-10) Asst. Cit, Circle-1, M/S. Thakor Electronics Ltd. 1St Floor, Mohan Plaza, Plot No. P-1, P-3, 1St Floor, बनाम/ Wayale Nagar, Kalyan (W)-421 301 Shree Rajlaxmi Hi-Tech Textile Vs. Park, Bhiwandi, Nashik Bypass Road, Sonale, Bhiwandi-421 302 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabct 4323 M (Revenue) (Assessee) : आयकर अपील सं./I.T.A. Nos. 6484 & 6485/Mum/2016 ("नधा"रण वष" / Assessment Years: 2009-10 & 2010-11) M/S. Thakor Electronics Ltd. Asst. Cit, Circle-1, Plot No. P-1, P-3, 1St Floor, 1St Floor, Mohan Plaza, बनाम/ Shree Rajlaxmi Hi-Tech Textile Park, Wayale Nagar, Kalyan (W)-421 301 Vs. Bhiwandi, Nashik Bypass Road, Sonale, Bhiwandi-421 302 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabct 4323 M (Assessee) (Revenue) : Revenue By : Shri V. Justin Assessee By : Shri Tanjil Padvekar सुनवाई क" तार"ख / : 23.04.2018 Date Of Hearing घोषणा क" तार"ख / : 02.05.2018 Date Of Pronouncement आदेश / O R D E R Per Bench: These Are Cross Appeals By The Assessee & Revenue For Assessment Years 2009-10 & Appeal By The Assessee For Assessment Year 2010-11, Arising Out Of The M/S. Thakor Electronics Ltd. Common Order Of The Ld. Commissioner Of Income Tax (Appeals) For These Assessment

…ive the assessee various savings at the expense of the Exchequer. Hence, on the overall consideration of facts and circumstances and M/s. Thakor Electronics Ltd. following the decision of Hon’ble Gujarat High Court in the case of CIT vs Simit P. Sheth [2013] 356 ITR 451 (Guj.) we hold that a disallowance of 12.5% of the bogus purchase would meet the end of justice. Accordingly, we modify the order's of authorities below and direct that the disallowance in this case should be restricted to 12.5% of the bogus purchase. The ld. Counsel of the assessee fairly agreed to the above proposition. 15. In the result, the…

Chemical Process Piping P.Ltd, Mumbai vs. Addl CIT 10(2) Erstwhile, Mumbai

The appeal of the assessee is partly allowed

Bench: Shri G.S.Pannu, Am & Shri Ravish Sood, Jm Ita Nos. 1036 & 1037/Mum/2016 (निर्धारण वषा / Assessment Years:2011-12 & 2012-13) M/S Chemical Process Piping Pvt. Ltd. Shri R. M. Madhavi, Cpe Plots, Bsd Marg, Erstwhile Additional Cit- बिधम/ Govandi East, 10(2), Now, Addl Cit Vs. Mumbai-400 088 14(2), Mumbai

…element involved in making of such purchases could safely be taken @ 12.5% of the aggregate value of the purchases. We find that our aforesaid view is fortified by the judgment of the Hon'ble High Court of Gujarat in the case of CIT Vs. Simit P. Sheth (2013) 356 ITR 451 (Guj). We thus finding no infirmity in the sustaining of addition in respect of the purchase transactions to the extent of 12.5% by the CIT(A), therefore, uphold the order of the CIT(A) in context of the aforesaid issue under consideration. The Ground of appeal No. 1 raised by the assessee is dismissed. 7. We shall now advert to the challenge th…

DCIT 8(2)(2), Mumbai vs. Steamline Industries Ltd, Mumbai

In the result, these appeals filed by the Revenue stands partly allowed

Bench: Shri Shamim Yahya, Am & Shri Ram Lal Negi, Jm आयकर अपील सं./I.T.A. Nos.5842 & 5843/Mum/2015 ("नधा"रण वष" / Assessment Years: 2009-10 & 2011-12) Dy. Cit-8(2)(2), M/S. Steamline Industries Ltd. बनाम/ Room No. 615, M. K. Road, 178/26, Chatrabhuj Khetashi, Mumbai-400 020 Sant Tukaram Road, Masjid Bunder, Vs. Mumbai-400 009 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacs 7421 C (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Shri V. Justin ""यथ" क" ओर से/Respondent By : Shri R. C. Jain सुनवाई क" तार"ख / : 26.04.2018 Date Of Hearing घोषणा क" तार"ख / : 02.05.2018 Date Of Pronouncement आदेश / O R D E R Per Bench: These Are Appeals By The Revenue Against The Respective Orders Of The Ld. Commissioner Of Income Tax (Appeals) For The Concerned Assessment Years.

…ealings in the grey market give the assessee various savings at the expense of the Exchequer. Hence, on the overall consideration of facts and circumstances and following the decision of Hon’ble Gujarat High Court in the case of CIT vs Simit P. Sheth [2013] 356 ITR 451 (Guj.) we hold that a disallowance of 12.5% of the bogus M/s. Steamline Industries Ltd. purchase would meet the end of justice. Accordingly, we modify the order of the ld. Commissioner of Income Tax (Appeals) and direct that the disallowance in this case should be restricted to 12.5% of the bogus purchase. The ld. Counsel of the assessee’s relian…

Royal Aircon Private Limited, Mumbai vs. Income Tax Officer Ward-15(3)(1), Mumbai

In the result, appeal filed by the assessee for assessment year 2012-

Bench: Shri G.S. Pannu (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2012-13 M/S Royal Aircon Pvt. Ltd., The Ito, A-304, Silver Brich, Ward 15(3)(1), Vasant Garden, Mulund (West), Mumbai Mumbai - 400082 Vs. Pan: Aaecr0058A (Appellant) (Respondent) Assessee By : Shri Devendra Jain (Ar) Revenue By : Ms. N. Hemalatha (Sr. Dr) Date Of Hearing: 11/04/2018 Date Of Pronouncement: 27/04/2018

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “SMC”, MUMBAI BEFORE SHRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) Assessment Year: 2012-13 M/s Royal Aircon Pvt. Ltd., The ITO, A-304, Silver Brich, Ward 15(3)(1), Vasant Garden, Mulund (West), Mumbai Mumbai - 400082 Vs. PAN: AAECR0058A (Appellant) (Respondent) Assessee by : Shri Devendra Jain (AR) Revenue by : Ms. N. Hemalatha (Sr. DR) Date of Hearing: 11/04/2018 Date of Pronouncement: 27/04/2018 O R D E R PER RAM LAL NEGI, JM This appeal has been filed by the assessee against the order dated 28.08.2017 passed by the Ld. Commissioner of Income Tax (Appea…

Spectrum Scan P.Ltd, Mumbai vs. Asst CIT 7(2), Mumbai

In the result, appeal of the assessee is partly allowed

Bench: Shri G.S. Pannu & Shri Ram Lal Negi: (A.Y : 2009-10)

…acting. 4. At the time of hearing before us, the learned representative for the assessee pointed out that in similar situation, the different Benches of the Tribunal are following the ratio of the judgment of Hon'ble High Court in the case of Simit P. Sheth, 356 ITR 451 (Guj.) and only a part representing the profit element embedded in the unsubstantiated purchases is added to the returned income. Support has also been drawn from the judgements of the Hon'ble Gujarat High Court in the case of CIT vs Bholanath Poly Fab. (P.) Ltd., 355 ITR 290 (Guj.) and CIT vs Vijay M. Mistry Construction Ltd., 355 ITR 498 (Guj.)…

Vijay Metal Corporation, Mumbai vs. Income Tax Officer, Ward 19(3)(5), Mumbai

In the result, the appeal is partly allowed

Bench: Shri C.N. Prasad () & Shri N.K. Pradhan () Assessment Year: 2010-11 M/S Vijay Metal Corporation Ito-19(3)(5) 73, Habib Building, C.P. Tank Vs. 2Nd Floor, Matru Road, Mandir, Tardeo, Mumbai-400004 Mumbai. Pan No. Aabfv4225D Appellant Respondent Assessee By : Mr. Bharat Kumar, Ar Revenue By : Ms. Poorja Swaroop, Dr Date Of Hearing : 16/04/2018 Date Of Pronouncement : 26/04/2018

…hy the profit element embedded in such suspicious purchases should not be added back to the total income. In reply, the AR of the assessee stated that a reasonable addition on that account be made. The AO then, relying on the decision in CIT v. Simit P. Sheth 356 ITR 451 (Guj) and M/s Bholenath Poly Fab (P) Ltd. 355 ITR 290, estimated the profit @ 12.5% on the purchases of Rs.1,52,74,171/- and thus made an addition of Rs.19,09,271/-. 7. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) has noted that there was no M/s Vijay Metal Corporation 4 compliance by the as…

Clean Engineering Private Limited, Mumbai vs. Income Tax Officer, Ward 1(1), Mumbai

In the result, appeal filed by the assessee for assessment year 2011-

Bench: Shri G.S. Pannu (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2011-12 M/S Clean Engineering Pvt. Ltd., The Income Tax Officer, Plot No. 31, Shed No. 20, Midc, Ward-(1)(1), Badlapur - 421503 Mohan Plaza, 1St Floor, Vs. Wayale Nagar, Khadak Pada, Pan: Aadcc1247R Kalyan- 421301

…eged by it. However, since the AO has not disputed/rejected the sale, the entire amount of the bogus purchases cannot be added to the income of the assessee in view of the ratio laid down by the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth 356 ITR 451 (Guj). In the said case, the Hon’ble Gujarat High Court has held that in the case of bogus purchases it is necessary to 4 Assessment Year: 2011-12 ascertain the fact as to whether purchases were not made at all or purchases were made but from grey market. Once it is established that the purchases were actually made then only profit embedded in…

Shubhangi Sudhakar Telawane, Mumbai vs. Assistant Commissioner of Income Tax, Circle-3, Mumbai

In the result, appeal filed by the assessee for assessment year 2011-

Bench: Shri G.S. Pannu (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2011-12 Shubhangi Sudhakar Telawane, The Acit, Circle-3, Prop. Telawane Cromtek, Room No. 2, B Wing, A-1002, Greeshma Residency-2, 6Th Floor, Ashar It Park, Opp. Dyansadhana Vidya Mandir, Vs. Road No. 16Z, Midc, Thane - 400604 Thane (West) Pan: Abipt2788D (Appellant) (Respondent) Assessee By : Shri Devendra Jain (Ar) Revenue By : Ms. N. Hemalatha (Sr. Dr) Date Of Hearing: 12/04/2018 Date Of Pronouncement: 25/04/2018

…this point. However, since the AO has not disputed/rejected the sale, the entire amount of the bogus purchases cannot be added to the income of the assessee in view of the ratio laid down by the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth 356 ITR 451 (Guj). In the said case, the Hon’ble Gujarat High Court has held that in the case of bogus purchases it is necessary to ascertain the fact as to whether purchases were not made at all or purchases were made but from grey market. Once it is established that the purchases were actually made then only profit embedded in the same could be added in th…

Nilesh Laxman Gore, Thane vs. Income Tax Officer Ward 3(1), Thane

In the result, appeal filed by the assessee for assessment year 2009-

Bench: Shri G.S. Pannu (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2009-10 Shri Nilesh Laxman Gore, The Ito Ward 3(1), S/O Laxman Gore, Room No. 3, B Wing, A/601, Tulip Gardens, 6Th Floor, Ashar It Park, Pokhran Road-2, Vs. Road No. 16Z, Wagle Estate, Next To Oswal Park, Thane Thane (West)- 400601 Pan: Afppg5715A (Appellant) (Respondent) Assessee By : Shri Piyush Chhajed (Ar) Revenue By : Ms. N. Hemalatha (Sr. Dr) Date Of Hearing: 12/04/2018 Date Of Pronouncement: 25/04/2018

…re genuine. However, since the AO has not disputed/rejected the sale, the entire amount of the bogus purchases cannot be added to the income of the assessee in view of the ratio laid down by the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth 356 ITR 451 (Guj). In the said case, the Hon’ble Gujarat High Court has held that in the case of bogus purchases it is necessary to ascertain the fact as to whether purchases were not made at all or purchases were made but from grey market. Once it is established that the purchases 5 Assessment Year: 2009-10 were actually made then only profit embedded i…