Income Tax Appellate Tribunal - Mumbai
Ito, 19(2)(14), Mumbai vs Mr. Narpatkumar Dudhmalji Chandan, ... on 15 September, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 3099/Mum/2019 ( नधा रण वष / Assessment Years : 2011-12 ITO 19(2)(14) बनाम/ Mr. Narpatkumar 2 n d floor, Rm No. 217, Vs. Dudhmalji Chandan, Matru Mandir, Tardeo 55B, Khetwadi Main Road, Road, Mumbai - 400 CP Tank, Mumbai - 007 400004 थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAAPC6295M (अपीलाथ /Appellant) .. ( यथ / Respondent) अपीलाथ ओर से / Appellant by : Shri Akhtar H. Ansari, DR यथ क ओर से/Respondent by : Shri Rajesh Chamria, AR ु वाई क तार ख / सन Date of Hearing 15/09/2020 घोषणा क तार ख /Date of Pronounce ment 15/09 /2020 आदे श / O R D E R PER SHAMIM YAHYA- AM:
This is an appeal by the revenue wherein the revenue is aggrieved that the Ld. CIT(A) has reduced the addition for bogus purchase of Rs. 6,83,280/- done @ 100% by A.O by sustaining only 12.5% order dated 28.02.2019 for A.Y 2011-12.ITA No.3099/Mum/2019.
Mr. Narpatkumar Dudhmalji, Mumbai.-2-
2. The assessee in this case is engaged into trading of ferrous and non-ferrous metals. The assessment was reopened upon information from sales tax department that assessee has made purchases from bogus dealers. The A.O made 100% addition of the bogus purchase. Upon assessee's appeal Ld. CIT(A) has noted that the sales has not been doubted. Accordingly placing reliance upon several case laws and upon the facts of the case he sustained 12.5% disallowance out of the bogus purchases.
3. Against above order revenue is in appeal before the ITAT.
4. I have heard the rival submissions and perused the record. I find that in this case the sales have not been doubted it is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from Hon'ble jurisdictional high court decision in the case of Nikunj Exip Enterprises (in writ petition No. 2860, order dated 18.06.2014). In this case the Hon'ble High Court has ITA No.3099/Mum/2019. Mr. Narpatkumar Dudhmalji, Mumbai.-3-
upheld hundred percent allowance for the purchases said to be bogus when sales are not doubted. However, the facts of the present case indicate that assessee has made purchases from the grey market. Making purchase through the grey market gives the assessee savings on account of non- payment of tax and others at the expense of the exchequer. In such situation in our considered opinion on the facts and circumstances of the case the 12.5% disallowance out of the bogus purchase done by the Ld. CIT(A) meets the end of justice. Accordingly I uphold the order of Ld. CIT(A). The Ld. Counsel of the assessee fairly agreed to the above.
5. The decision of NV proteins relied by the revenue was dismissal of SLP by the Hon'ble Supreme Court and has already been explained and distinguished by Hon'ble Bombay High Court in the case of Pr. CIT Vs. Md. Haji Adam & Co. in ITA No 1004 of 2016, dated 11.12.2019.
6. In the result this appeal filed by the revenue stands dismissed.
7. Before parting I may add that if the assessee has filed a cross objection and the same has remained unheard, ITA No.3099/Mum/2019. Mr. Narpatkumar Dudhmalji, Mumbai.
-4-either party may apply for recall of this order so that the appeals can be heard together.
This Order pronounced in virtual Court on 15/09/2020 Sd/-
( SHAMIM YAHYA ) ACCOUNTANT MEMBER Mumbai, Dated 15/09/2020 KRK, PS आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं'धत आयकर आयु)त / The CIT(A)
4. आयकर आय) ु त(अपील) / Concerned CIT
5. ,वभागीय /त/न'ध, आयकर अपील य अ'धकरण, अहमदाबाद / DR, ITAT, Mumbai
6. गाड4 फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या,पत /त //True Copy//
1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Mumbai