Income Tax Appellate Tribunal - Pune
M/S. V.K. Chemicals,, Jalna vs Income-Tax Officer, Ward -1,, Jalna on 24 June, 2019
आयकर अपीऱीय अधिकरण पण
ु े न्यायपीठ एक-सदस्य मामऱा पण
ु े में
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "SMC", PUNE
सुश्री सुषमा चावऱा, न्याययक सदस्य के समक्ष
BEFORE MS. SUSHMA CHOWLA, JM
आयकर अपीऱ सं. / ITA No.990/PUN/2018
यििाारण वषा / Assessment: 2011-12
M/s. V.K. Chemicals,
Ist Floor, Shri Sai Complex,
Jalna - 431 203
PAN : AADFN6145N .... अऩीऱाथी/Appellant
Vs.
The Income Tax Officer,
Ward-1, Jalna .... प्रत्यथी / Respondent
अऩीऱाथी की ओर से / Appellant by : Shri Vishnu D. Bhutada
प्रत्यथी की ओर से / Respondent by : Shri M.K. Verma
सन
ु वाई की तारीख / घोषणा की तारीख /
Date of Hearing : 21.06.2019 Date of Pronouncement: 24.06.2019
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
The appeal filed by the assessee is against the order of Commissioner of Income Tax (Appeals) - 1, Aurangabad dated 19.03.2018 relating to assessment year 2011-12 against order passed u/s 143(3) r.w.s. 147 of the Income Tax Act 1961 (in short 'the Act').
2 ITA No. 990/PUN/2018
M/s. V.K. Chemicals
2. The assessee has raised the following grounds of appeal :
"1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in :
a) Affirming the disallowance of "genuine purchases" by holding the same as „bogus purchase‟ amounting to Rs.6,67,350/- by relying on the assessment order which was based on website information of "Sales Tax Department" and without examining said vendor (who supplied goods to the appellant) by the Ld. A.O. also during assessment proceedings.
b) Ignoring the aspect that against the purchase, appellant has supplied same gods to "The Chief Officer, Nagar Parishad, Hingoli" (which is a public entity) by disregarding the quantity reconciliation of the appellant which tallies with the books of accounts.
c) Confirming the disallowance, by ignoring the fact that said disallowance (of Rs.6,67,350/-) results in multiple taxation of same transaction which is beyond the scope of charging provisions of Income Tax Act and hence, the disallowance was totally unwarranted which needs to be deleted.
2. The appellant, therefore, prays that the appeal may be admitted and order may be passed rendering justice to the appellant.
3. Any other grounds that may be let in at the time of hearing."
3. The only issue raised in the present appeal is against the addition made on account of alleged bogus purchases, amounting to Rs.6,67,350/-, based on the information received from the website of Sales Tax Department.
4. The case of the assessee before the authorities below and even before me was that the purchases made by the assessee were genuine purchases as the said goods have been inturn sold to The Chief Officer, Nagar Parishad, Hingoli which was a public entity.
5. The learned Authorized Representative for the assessee stressed that no addition is warranted on this account. It was put to the learned Authorized Representative for the assessee as to whether any quantitative stock register 3 ITA No. 990/PUN/2018 M/s. V.K. Chemicals was maintained but he denied to the same. In the alternate, learned Authorized Representative for the assessee accepted that the issue stands covered by the decision of Pune Bench of Tribunal in M/s. Chhabi Electricals Pvt. Ltd. and others Vs. DCIT in ITA No.795/PUN/2014, relating to assessment year 2010-11, decided on 28-04-2017.
6. After hearing both the sides and on the perusal of record, the issue stands covered by the ratio laid down by the Tribunal in M/s. Chhabi Electricals Pvt. Ltd. and others Vs. DCIT (supra), in the case of purchases made by the assessee from the parties who had defaulted in making the payment of VAT, the information was collected by the Sales Tax Department. The Tribunal in series of decisions have decided the issue with lead order in M/s. Chhabi Electricals Pvt. Ltd. and others Vs. DCIT (supra). The Tribunal in the said decision had held that the addition is to be restricted to 10% of Gross Profit over and over the Gross Profit declared by the assessee in its books of account, on the alleged bogus purchases. Accordingly, the Assessing Officer is directed to restrict the addition to 10% of Gross Profit over and above the Gross Profit declared by the assessee on the aforesaid purchases of Rs.6,67,350/-. The grounds of appeal raised by the assessee are thus partly allowed.
7. In the result, the appeal of the assessee is partly allowed.
Order pronounced on this 24th day of June, 2019.
Sd/-
(SUSHMA CHOWLA) न्याययक सदस्य / JUDICIAL MEMBER ऩण ु े / Pune; ददनाांक Dated : 24 June, 2019 th Satish/GCVSR 4 ITA No. 990/PUN/2018 M/s. V.K. Chemicals आदे श की प्रयिलऱपप अग्रेपषि/Copy of the Order is forwarded to :
1. अऩीऱाथी / The Appellant;
2. प्रत्यथी / The Respondent;
3. आयकर आयुक्त(अपील) / The CIT(A)-1, Aurangabad;
4. प्रधान आयकर आयुक्त / The Pr.CIT-1, Aurangabad;
5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩुणे, एक-
6. सदस्य मामऱा / DR 'SMC', ITAT, Pune;
गार्ड पाईऱ / Guard file.
आदे शािस ु ार/ BY ORDER, सत्यावऩत प्रतत //TRUE COPY// Senior Private Secretary, आयकर अऩीऱीय अधधकरण, ऩण ु े / ITAT, Pune