Income Tax Appellate Tribunal - Mumbai
Asst Cit Cir 1, Kalyan vs Mohan Panditrao Gokulkar, Kalyan on 28 July, 2017
ITA No.7238 &7037/M/2014 Mohan Panditrao Gokulkar Assessment Year-2010-11 आयकर अपीलीय अिधकरण "बी" ायपीठ मुं बई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, MUMBAI जोिग र िसंह , ाियक सद एवं ी मनोज कुमार अ वाल, लेखा सद के सम ।
BEFORE SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./I.T.A. No.7238 &7037/Mum/2014 (िनधा रण वष / Assessment Years: 2010-11) Assistant Commissioner of Mohan Panditrao Gokulkar Income Tax Circle-1 C/o 104 B-Wing 1st Floor, Mohan Plaza Shree Swami Samarth Complex बनाम/ Wayale Nagar Behind Senapati Hospital Vs. Kaneri Khadakpada Kalyan Dhamankar Naka Bhiwandi - 421 302 थायी ले खा सं . /जीआइआर सं ./PAN/GIR No. AAZPG-8856-B (अ पीलाथ# /Appellant) : ($%थ# / Respondent) Assessee by : Bhupendra Shah, Ld. AR Revenue by : Suman Kumar, Ld. DR सुनवाई की तारीख / : 24/07/2017 Date of Hearing घोषणा की तारीख / : 28/07/2017 Date of Pronouncement 2 ITA No.7238 &7037/M/2014 Mohan Panditrao Gokulkar Assessment Year-2010-11 आदे श / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)
1. These are cross appeals for Assessment Year [AY] 2010-11 against the order of Ld. Commissioner of Income Tax (Appeals)-1 [CIT(A)], Mumbai dated 05/08/2014. The only issue involved in the appeal is quantum addition against certain bogus purchases.
2. Briefly stated, the assessee being resident individual engaged as Electrical Contractor, was assessed u/s 143(3) for impugned AY on 18/03/2013 where the income was assessed at Rs.90,91,790/- after sole addition of Rs.79,01,610/- towards non-genuine purchases as against returned income of Rs.11,90,180/- e-filed by the assessee on 15/10/2010.
2.1 During the assessment proceedings, the assessee was found to be made purchase from 7 parties aggregating Rs.79,01,610/- which were listed as non-genuine parties as per information received from the Sales Tax Department. The statement recorded by the Sales Tax Department was confronted to the assessee who, although submitted the purchase bills received from the said parties, expressed inability to produce any confirmation from the said parties to prove the purchases. The assessee contended that the payments were through banking channel. However, not convinced the Ld. AO treated the same as non-genuine purchases and added the same to the income of the assessee. 2.2 Aggrieved, the assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 05/08/2014 who 3 ITA No.7238 &7037/M/2014 Mohan Panditrao Gokulkar Assessment Year-2010-11 appreciated the rate of GP/NP rate earned by the assessee and further noted that the sales figure of Rs.3.86 crores achieved by the assessee has been accepted by the revenue and there could be no sale without any purchase. However, the Ld. CIT(A) also noted that the assessee could not fully discharge the onus of substantiating the purchases and therefore, restricted the impugned additions to 25% of non-genuine purchases which came to Rs.19,75,402/-. Aggrieved, both assessee and revenue is in appeal before us.
3. The Ld. Representative for Assessee [AR] made a short submission to contend that the assessee suffered similar addition in immediately preceding AY and this Tribunal has restricted the addition to 12.5% with benefit of Net Profit rate already declared by the assessee. It was also pointed out that the accounts were subjected to Tax Audit and the same has been accepted by the revenue and the assessee was in possession of purchases bills and payments were through banking channels and therefore, full disallowance was not justified. 3.1 Per contra, Ld. Departmental Representative [DR] contended that the assessee failed to discharge the onus of proving the purchases and therefore, full addition was justified particularly when the assessee could not produce even a single confirmation.
4. We have heard the rival contentions and perused the relevant material on record. We are convinced with the arguments of the revenue that the assessee has failed to discharge the primary onus of proving the purchases as it could not produce evidences to show actual delivery of material and also could not produce confirmatory letters from the alleged bogus suppliers and thus failed to substantiate the purchases. However, 4 ITA No.7238 &7037/M/2014 Mohan Panditrao Gokulkar Assessment Year-2010-11 at the same time, the assessee is in possession of purchase invoices, payments are through banking channels, accounts are subjected to Audit which has been accepted by the revenue and whole addition would result into unacceptable Net Profit Rate. Therefore, even if all the purchases are found to be bogus, the sales turnover has not been disputed by the revenue. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize profit earned by assessee against purchase of material in the grey market and undue benefit of VAT against bogus purchases. Therefore, we restrict the said disallowance to 12.50% with benefit of Net Profit of 3.47% already declared by the assessee. Resultantly, the net addition sustained by us would be 9.03% of purchases in dispute i.e. Rs. 79,01,610/- which comes to Rs.7,13,515/-. We direct so.
5. Resultantly, the revenue's appeal stands dismissed whereas the assessee's appeal stands partly allowed.
Order pronounced in the open court on 28th July, 2017.
Sd/- Sd/-
(Joginder Singh) (Manoj Kumar Aggarwal)
ाियक सद / Judicial Member लेखा सद / Accountant Member
मुंबई Mumbai; िदनांक Dated : 28.07.2017 Sr.PS:- Thirumalesh 5 ITA No.7238 &7037/M/2014 Mohan Panditrao Gokulkar Assessment Year-2010-11 आदे श की ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ# / The Appellant
2. $%थ# / The Respondent
3. आयकर आयु+(अपील) / The CIT(A)
4. आयकर आयु+ / CIT - concerned
5. िवभागीय $ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai
6. गाड/ फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुं बई / ITAT, Mumbai