CIT v. Simit P. Sheth

Smrat Infocom, Mumbai vs. ITO 33(3)(4), Mumbai

In the result, appeal of the assessee partly allowed

Bench: Shri D. Karunakara Rao & Shri Amarjit Singhm/S. Smart Infocom, फनाभ/ Ito, Erstwhile Wd 15(3)(3), Now Ito-33(3)(4), 1St Floor, 306/307, Plot No.9, Vs. 338, Sterling Industrial Premises C-12, Pratyakshakar Bhavan, Ltd., Ramachandras Lane Extn., Bkc, Bandra (E), Mumbai. Malad (W), Mumbai – 400 064. स्थामी रेखा सं./ Pan : Abefs1558C (अऩीराथी /Appellant) (प्रत्मथी / Respondent) ..

…u/s 69C of the Act ignoring the judgment of the Hon’ble jurisdictional High Court judgment in the case of CIT vs. Nikunj Eximp Enterprises Pvt Ltd (216 Taxman.com 171) (Bom.) and judgment of the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Seth (356 ITR 451) (Guj.). On appeal, CIT (A) confirmed the same. Aggrieved with the said order of the AO / CIT (A), assessee is in appeal before us. 3. During the proceedings before us, at the outset, Ld Counsel for the assessee submitted that the officers did not follow the binding judgments on the issue viz Nikunj Eximp Enterprises Pvt Ltd (supra) and Simit P…

Jainex Fire & Safety Systems P. Ltd, Mumbai vs. ITO 6(3)(2), Mumbai

In the result, appeal of the assessee is partly allowed

Bench: Shri G.S. Pannu: (A.Y : 2009-10)

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER : (A.Y : 2009-10) M/s. Jainex Fire & Safety Vs. ITO-6(3)(2), Mumbai Systems Pvt. Ltd., (Respondent) G-10/D, Laxmi Woollen Mills Compound, Shakti Mill Lane, Mahalaxmi, Mumbai 400 011 PAN : AABCJ1799H (Appellant) Assessee by : Shri Satish R. Mody Revenue by : Ms. Beena Santosh Date of Hearing : 28/12/2016 Date of Pronouncement : 06/01/2017 O R D E R PER G.S. PANNU, AM : The captioned appeal by the assessee is directed against the order of CIT(A)-12, Mumbai dated 04.05.2016, pertaining to the Assessment Y…

ITO 14(1)(3), Mumbai vs. Digitron Computers P.Ltd, Mumbai

The appeals of the assessee are allowed

…आयकर अपीलीय अिधकरण, मुंबई “अई अई अई” खंडपीठ अई Income-tax Appellate Tribunal -“I”Bench Mumbai सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"",लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं सी एवं सी सी. एन सी एन एन. "साद एन "साद "साद,"याियक "साद "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Shri Rajendra,Accountant Member and C.N. Prasad,Judicial Member आयकर आयकर अपील अपील संसंसंसं./ITA/160/Mum/2015,िनधा"रण िनधा"रण वष" वष" /Assessment Years: 2010-11 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" Income tax Officer-14(1)(3) M/s. Digitron Computers Pvt. Ltd. Room No.458, 4th Floor, Aayakar Unit No.2, Swas…

Digitron Computers P. Ltd, Mumbai vs. ITO 10(2)(1), Mumbai

The appeals of the assessee are allowed

…आयकर अपीलीय अिधकरण, मुंबई “अई अई अई” खंडपीठ अई Income-tax Appellate Tribunal -“I”Bench Mumbai सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"",लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं सी एवं सी सी. एन सी एन एन. "साद एन "साद "साद,"याियक "साद "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Shri Rajendra,Accountant Member and C.N. Prasad,Judicial Member आयकर आयकर अपील अपील संसंसंसं./ITA/160/Mum/2015,िनधा"रण िनधा"रण वष" वष" /Assessment Years: 2010-11 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" Income tax Officer-14(1)(3) M/s. Digitron Computers Pvt. Ltd. Room No.458, 4th Floor, Aayakar Unit No.2, Swas…

Amit Devani, Mumbai vs. ITO 22(1)(1), Navi Mumbai

In the result, appeals of the Assessee are partly allowed as indicated above

Bench: Shri C.N.Prasad,Jm & Shri N. K. Pradhan, Am Income Tax Appeal Nos.705, 706 & 707/Mum/2016 (धििाारण वर्ा / Assessment Years : 2009-10, 2011-12 & 2010-11) Shri Amit Davani Vs. Ito 22 (1) (1) 601, Shri Nidhi Apartments Vashi Railway Station Cama Lane, Ghatkopar (W) Navi Mumbai Mumbai – 400 086 (प्रत्यर्थी / Respondent) (अपीलार्थी / Appellant) स्र्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Accpd7658R अपीलार्थी की ओर से /Appellant By : Shri Kirit S Sanghavi प्रत्यर्थी की ओर से /Revenue By : Shri Kailash Gaikwad सुनवाई की तारीख / Date Of Hearing : 05/10/2016 घोषणा की तारीख /Date Of Pronouncement : 28/12/2016 आदेश / O R D E R

…s in the normal course of business, and therefore, in a situation like this, the appellant would have been getting a profit out of these transactions. Gujarat High Court in the case of CIT Vs. Bholanath Holyfab Pvt.Ltd. (355 ITR 290) & CIT Vs. Simit P. Sheth (365 ITR 451) has held that when purchases were made from parties other than those mentioned in the books of accounts, the profit element embedded in such purchases could be added to an assessee's income. Therefore, the profit element relating to these bogus purchases, shall be brought to tax. In the case of the appellant, the gross profit is around 24% durin…

Oil Seals Manufacturing Company P. Ltd, Mumbai vs. ITO WD 2(2)(4), Mumbai

In the result, both the appeals of the assessee are allowed in part

Bench: Shri R.C.Sharma, Am

…further appeal before us. 5. I have considered rival contentions and carefully gone through the orders of the authorities below and found that CIT(A) has restricted the addition to 12.5% by following the decision of Gujarat High Court in case of Simit P Sheth 356 ITR 451. Contention of learned AR was that rate of VAT in the case applied by CIT(A) was 12.5% whereas in the instant case, the rate of VAT tax on purchase was just 5%. 6. We found that comparative rate of gross profit disclosed by the assessee during the assessment year 2009-10 was 32%, 2010-11 was 34.73% and 2011-12 was 33.73%. Thus, the GP rate shown…

Oil Seals Manufacturing Company P. Ltd, Mumbai vs. ITO WD 2(2)(4), Mumbai

In the result, both the appeals of the assessee are allowed in part

Bench: Shri R.C.Sharma, Am

…further appeal before us. 5. I have considered rival contentions and carefully gone through the orders of the authorities below and found that CIT(A) has restricted the addition to 12.5% by following the decision of Gujarat High Court in case of Simit P Sheth 356 ITR 451. Contention of learned AR was that rate of VAT in the case applied by CIT(A) was 12.5% whereas in the instant case, the rate of VAT tax on purchase was just 5%. 6. We found that comparative rate of gross profit disclosed by the assessee during the assessment year 2009-10 was 32%, 2010-11 was 34.73% and 2011-12 was 33.73%. Thus, the GP rate shown…

Sha Tarachand Fojmal & Co., Mumbai vs. ITO WD 17(3)(3), Mumbai

In the result, both the appeals of the assessee are dismissed

Bench: Shri B.R. Baskaran & Shri Amit Shukla

…ed at godown/warehouse/storage house. After detailed discussion, AO determined the income from alleged bogus purchases by applying estimated GP rate of 12.5% following the judgment of the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth (2013) 356 ITR 451 (Guj.). Aggrieved by the assessment order, assessee carried the matter in appeal before the first appellate authority. 5. During the appellate proceedings before the FAA, after considering the submissions of the assessee, Ld CIT (A) restricted the addition by applying the GP rate as disclosed by the assessee in relation to other purchases made by…

Asst CIT 26(3), Mumbai vs. Saini Electronic Security System, Mumbai

In the result, appeal of the Revenue and the Cross Objection raised by the assessee are dismissed

Bench: Shri D. Karunakara Rao & Shri Pawan Singhi.T.A. No.2225/M/2015 (Assessment Year: 2010-2011) फनाभ/ Acit, Circle-26(3), M/S. Saini Electronic Mumbai. Security System, Vs. 26-A, Narayan Plaza, Unit No.6, 1St Floor, Chandivali, Opp. Saki Vihar Road, Saki Naka, Mumbai-72. स्थामी रेखा सं./ Pan : Abafs0771M (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) C.O.No.192/M/2016 (Arising Out Of I.T.A. No.2225/M/2015) (Assessment Year: 2010-2011) फनाभ/ M/S. Saini Electronic Security Acit, Circle-26(3), System, Mumbai. Vs. 26-A, Narayan Plaza, Unit No.6, 1St Floor, Chandivali, Opp. Saki Vihar Road, Saki Naka, Mumbai-72. स्थामी रेखा सं./ Pan : Abafs0771M (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : Shri Sanjeev Lalan प्रत्मथी की ओय से/ Respondent By : Shri Saurabh Kumar Rai, Dr

….com 171) (Bom.). Relying on the said judgment as well as the judgment of the Hon‟ble Gujarat High Court in the case of CIT vs. Bholath Polyfab Pvt Ltd [2013] 355 ITR 290 (Guj.) and another judgment of the same High Court in the case of CIT vs. Simit P. Seth (356 ITR 451) (Guj.), CIT (A) directed the AO to estimate the profits @ 12.5% of the alleged bogus purchases of net amount of Rs. 58,65,440/-. Thus, the CIT (A) confirmed the addition of Rs. 7,33,180/- on this account. Further, CIT (A) also considered the facts relating to the investigation u/s 133(6) of the Act in respect of the purchases from M/s. Shriti En…

DCIT 15(2)(2), Mumbai vs. Pci Analytics P.Tld, Mumbai

The appeals of the Revenue are dismissed

Bench: Shri Joginder Singh & Shri N.K. Pradhan

…to whether the payments made by the assessee had been actually received by the apparent sellers. Hence, the estimate made by the appellate authorities did not warrant interference. 6.6 Very recently in the case of Commissioner of Income-tax v. Simit P. Sheth 356 ITR 451 (Gui), the Hon'ble court has given a finding that estimation of rate of profit return must necessarily vary with the nature of business and no uniform yardstick could be adopted and finally confirmed the action of the ITAT determining 12.5% of the bogus purchases as the profit em4dded in such transaction. The head note is as under: Income from un…

ITO 20(2)(4), Mumbai vs. Lifetchniques, Mumbai

In the result, the appeal filed by the revenue is hereby ordered to be Dismissed

…Vs. ITO, ITA No.1950/Mum/2009 ITAT Mumbai B Bench dated 23.12.2010, the profit element was taken into consideration for tax which seems quite justifiable. Moreover, the CIT(A) has also relied upon the law cited as Commissioner of Income Tax Vs. Simit P. Sheth 356 ITR 451 (Guj.) wherein the view of the ITAT regarding the tax upon the bogus purchases, the profit element was taken into consideration. There is no dispute that the Assessing Officer decided this issue on the basis of law settled in M/s. Vijay Proteins Ltd. (Supra). What should be the reasonable it is a matter of consideration. Taking into account of th…

Pratap U Purohit, Mumbai vs. JCIT RG 25(2), Mumbai

In the result, appeal of the revenue is dismissed, whereas the appeal of the assessee is allowed in part

…idence that the bogus bills used of such parties actually resulted in entire cash being siphoned out of the business of the appellant. The decision is taken relying on the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Simit P. Sheth (2013) 356 ITR 451(Guj). Therefore taking the ratio from the case of Smit P. Sheth it is decided that 15% of the profit element of Rs.92,40,232/- i.e. Rs. 13,86,035/- is to be upheld as addition on this and the appellant gets a relief of Rs.78,S4,197/-. 5.2. On the second ground of appeal it is seen from the submission made by the appellant and the contentions of t…

Asst CIT 25(2), Mumbai vs. Pratap Uttam Purohit, Mumbai

In the result, appeal of the revenue is dismissed, whereas the appeal of the assessee is allowed in part

…idence that the bogus bills used of such parties actually resulted in entire cash being siphoned out of the business of the appellant. The decision is taken relying on the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Simit P. Sheth (2013) 356 ITR 451(Guj). Therefore taking the ratio from the case of Smit P. Sheth it is decided that 15% of the profit element of Rs.92,40,232/- i.e. Rs. 13,86,035/- is to be upheld as addition on this and the appellant gets a relief of Rs.78,S4,197/-. 5.2. On the second ground of appeal it is seen from the submission made by the appellant and the contentions of t…

Mahavir Construction Co., Mumbai vs. DCIT 24(3), Mumbai

In the result, the appeal of the assessee and the Revenue are partly allowed for statistical purposes

Bench: Shri D. Karunakara Rao & Shri Amarjit Singh

…ITO in I.T.A. No.4384/M/2015 (AY: 2010-2011) wherein one us (AM) is a party to the said order. In the said case, the Tribunal relied on the judgment of the Hon‟ble Gujarat High Court in the case of CIT vs. Simit P Sheth in ITA No.553 of 2012, dated 16.1.2013 (356 ITR 451), which is relevant for the proposition that the only profit element embedded in such purchases can be added to the income of the assessee when the assessee purchased goods in grey market without bills and made up the same with the accommodation entries / bills. Considering the significance of the said order of the Tribunal (supra) and for the sa…

Magoxy Infrastructure P. Ltd, Mumbai vs. DCIT 10(3), Mumbai

In the result, appeal of the assessee is partly allowed

Bench: Shri Joginger Singh & Shri D. Karunakara Rao

…addition of Rs. 16,00,561/-. Assessee filed copies of the relevant purchase invoices and demonstrated the facts relating to the bank transactions of these bogus purchases. Assessee also relied on the Gujarat High court judgment in the case of Simit P. Sheth (356 ITR 451) for the proposition of restricting the addition to the GP on the said suspicious purchases. However, CIT (A) rejected the same and proceeded to confirm the addition as per the decision given in para 2.7 of the impugned order. CIT (A) opined that assessee failed to prove the purchases from grey market with evidences and therefore, the request for…

Kinjal Construction Co. & Chirag Construction Co. (Jv), Mumbai vs. ITO 18(2)(4), Mumbai

In the result, appeal of the assessee is dismissed

Bench: Shri D. Karunakara Rao & Shri Amarjit Singh

…for the assessee submitted that the addition of additional GP of Rs. 3,16,578/- only increased the unearned GP of the assessee. However, referring to the Gujarat High Court judgment in the case of CIT vs. Simit P Sheth in ITA No.553 of 2012, dated 16.1.2013 (356 ITR 451), Ld Counsel for the assessee submitted the said judgment is relevant for the proposition that the only profit element embedded in such purchases can be added to the income of the assessee when the assessee purchased goods in grey market without bills and made up the same with the accommodation entries / bills. However, the Ld AR is of the opinio…

Jai Hind Paper Mart, Mumbai vs. ITO 14(2)(3), Mumbai

In the result, both the appeals of assessee and revenue are dismissed

Bench: Shri R.C. Sharma, Am & Shri Sandeep Gosain, Jm आमकय अऩीर सं./I.T.A. No.6134 /Mum/2014 (निर्धारण वषा / Assessment Year: 2009-10) M/S. Jai Hind Paper Mart Income Tax Officer 14(2)(3), 3Rd Floor, Earnest House 186, Hiramanek Bldg, बिधम/ Dadiseth Agiary Lane, Nariman Point, Vs. Chira Bazar, Mumbai-400 021. Mumbai-400 002. स्थामी रेखा सं./जीआइआय सं ./Pan/Gir No. Aaafj3532E (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : आमकय अऩीर सं./I.T.A. No.6144 /Mum/2014 (निर्धारण वषा / Assessment Year: 2009-10) Income Tax Officer 14(2)(3), M/S. Jai Hind Paper Mart 3Rd Floor, Earnest House 186, Hiramanek Bldg, बिधम/ Nariman Point, Dadiseth Agiary Lane, Vs. Mumbai-400 021. Chira Bazar, Mumbai-400 002. स्थामी रेखा सं./जीआइआय सं ./Pan/Gir No. Aaafj3532E (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : अऩीराथी की ओय से / Appellant By : Shri Ratan Samul प्रत्मथी की ओय से/Respondent By : Shri K. Ravi Kiran

…nt cannot be made in the present case. Rather, the cause of justice would be met by making addition of a reasonable percentage of such purchases in order to fulfill the gap of any revenue leakage in aforesaid circumstances. In the case of CIT Vs Smith P Seth (356 ITR 451) (Guj) the Court held that not the entire purchase price but only the profit element embedded in such purchases should be added to the income of the assessee. The estimation of rate of profit may vary no uniform yardstick could be adopted. The Court did not interfere regarding the profit @12,5% estimated by the Hon'ble ITAT. The appellant also re…

DCIT 10(3), Mumbai vs. Jakharia Fabrics P.Ltd, Mumbai

Appeal of the revenue is dismissed

Bench: Shri C.N. Prasad () & Shri Ashwani Taneja ()

…onal evidence(s) was admitted in violation to Rule 46A of the I.T. Rules. " On the facts and in the circumstances of the case and in law, 3. the Ld. CIT(A) erred in applying the ratio of Hon'ble Gujarat High Court decision in the case of CIT vs Simit P. Seth, 356 ITR 451(Guj) and thereby Ld.CIT(A) erred in not appreciating the fact that the assessee failed to substantiate its case with evidence. "On the facts and in the circumstances of the case and in law, 4. the Ld. CIT(A) erred in not appreciating the fact that the assessee failed to substantiate its case with evidence that the said purchase entries with 8 par…

Asst CIT 19(3), Mumbai vs. Vishal Diamonds, Mumbai

In the result, all three appeals filed by Revenue are dismissed

Bench: Shri Shailendra Kumar Yadav

…Officer. But admittedly, suppliers parties were not available at the address furnished. Assessee did not maintain any stock register as evident from tax audit report. On these facts, applying the decision of Hon’ble Gujarat High Court in the case Simit Sheth (356 ITR 451), CIT(A) directed to Assessing Officer to disallow 12.5% of the purchases made in respective years and he also directed the Assessing Officer to compute the income accordingly. Under facts and circumstances, the direction of CIT(A) is appropriate. Accordingly, same is upheld. 3. As a result, appeal filed by Revenue for A.Y. 2008-09 is dismissed.…

Asst CIT 19(3), Mumbai vs. Vishal Diamonds, Mumbai

In the result, all three appeals filed by Revenue are dismissed

Bench: Shri Shailendra Kumar Yadav

…Officer. But admittedly, suppliers parties were not available at the address furnished. Assessee did not maintain any stock register as evident from tax audit report. On these facts, applying the decision of Hon’ble Gujarat High Court in the case Simit Sheth (356 ITR 451), CIT(A) directed to Assessing Officer to disallow 12.5% of the purchases made in respective years and he also directed the Assessing Officer to compute the income accordingly. Under facts and circumstances, the direction of CIT(A) is appropriate. Accordingly, same is upheld. 3. As a result, appeal filed by Revenue for A.Y. 2008-09 is dismissed.…