Acit 32 1 Mumbai v. Himanshu K Modi Mumbai

In The Income Tax Appellate Tribunal H Bench Mumbai Before Shri Shamim Yahya A M And Shri Pawan Singh Jm I T A No 5364 Mum 2015 Assessment Year 2011 12 Asst Cit 32 1 Pratyakshar Kar Bhavan Room No 202 C 11 2 Nd Floor Bandra Kurla Complex Bandra E Mumbai 400 051 Vs Shri Himanshu K Modi Prop Of Vitrag Construction Co C 4 1006 Yogi Darpan Society Eksar Road Borivali West Mumbai 400 091 Pan Gir No Aacpm 8724 B Appellant Respondent Appellant By Shri M C Omi Ningshan Respondent By Shri Kamlesh N Doshi Date Of Hea Ring 18 09 2017 Date Of Pronouncement 11 12 2017 O R D E R Per Shamim Yahya A M T His Is An Appeal By The Revenue Directed Against The Order Of The Ld Commissioner Of Income Tax Appeals 44 Mumbai Dated 02 09 2015 And Pertains To The Assessment Year 2011 12 2 The Issue Raised Is That The Ld Commissioner Of Income Tax Appeals Erred In Sustaining Disallowance Of Only 8 Of Bogus Purchase Amounting To Rs 8 40 390 2 Ita No 5364 Mum 2015 A Y 2011 12 Asst Cit Vs Shri Himanshu K Modi Instead Of 100 Disallowance Made By The Assess Ing Officer Amounting To Rs 1 05 04 893 3 I N This Case The Assessing Officer Noted That Some Of The Purchases Made By The Assessee Were From Parties Whose Names Appeared In The List Of Suspicious Dealers Who Indulge In Issuing Only Bills Without Deli Vering Any Goods As Per The Averments Of The Sales Tax Department As Well As Enquiries Conducted By The Income Tax Department He Identified Eleven Such Parties From Whom The Assessee Had Made Purchases Amounting To Rs 1 05 04 893 He Noted That The Noti Ces U S 133 6 Could Not Be Served On These Parties Thereafter The Assessing Officer Inter Alia Observed That There Is No Evidence Of Movement Of Delivery Of Goods The Assessing Officer Concluded That The Purchases Of The Assessee Per Se Are Not Treate D As Bogus Yet The Assessee Has Not Purchased The Goods From These Alleged Suppliers The Goods Have Somehow Entered In The Assessees Regular Business The Assessee Has Been Unable To Give Any Convincing Or Cogent Explanation As To How These Goods Came I N His Possession He Therefore Treated The Purchases As Unexplained And Made The Disallowance U S 69 C Of The I T Act 4 Against The Above Order The Assessee Appealed Before The Ld Commissioner Of Income Tax Appeals The Ld Commissioner Of Inco Me Tax Appeals Noted That Sales Have Not Been Doubted He Referred To Honble Gujarat High Court Decision In The Case Of Smith P Seth And Restricted The Disallowance To 8 3 Ita No 5364 Mum 2015 A Y 2011 12 Asst Cit Vs Shri Himanshu K Modi 5 Against The Above Order Of The Ld Commissioner Of Income Tax Appeals The Revenue Is In Appeal Before The Itat 6 We Have Heard Both The Counsel And Perused The Records We Find That Credible And Cogent Information Was Received In This Case By The Assessing Officer That Certain Accommodation Entry Provider Bogus Suppliers We Re Being Used By Certain Parties To Obtained Bogus Bills Assessee Was Found To Have Taken Accommodation Entry Bogus Purchase Bills During The Concerned Assessment Year From Different Parties In Such Factual Scenario The Assessing Officer Has Made The Ne Cessary Enquiry The Issue Of Notice To All The Parties Have Returned Unserved Assessee Has Not Been Able To Provide Any Confirmation From Any Of The Party Assessee Has Also Not Been Able To Produce Any Of The Parties Necessary Evidence Relating To Tran Sportation Of The Goods Was Also Not On Record In This Factual Scenario It Is Amply Clear That Assessee Has Obtained Bogus Purchase Bills Mere Preparation Of Documents For Purchases Cannot Controvert Overwhelming Evidence That The Provider Of These Bill S Are Bogus And Non Existent 7 The S Ales T Ax Department In Its Enquiry Have Found The Parties To Be Providing Bogus Accommodation Entries The Assessing Officer Also Issued Notices To These Parties At The Addresses Provided By The Assessee All These N Otices Have Returned Unserved Assessee Has Not Been Able To Produce Any Of The Parties Neither The Assessee Has Been Able To Produce Any Confirmation From These Parties In Such Circumstance There Is No Doubt That These Parties Are Non Existent We Find It Further 4 Ita No 5364 Mum 2015 A Y 2011 12 Asst Cit Vs Shri Himanshu K Modi Strange That Assessee Wants The Revenue To Produce Assessees Own Vendors Whom The Assessee Could Not Produce The P Urchase Bills From These Non Existent The Bogus Parties Cannot Be Taken As Cogent Evidence Of Purchases In Light Of The Overwh Elming Evidence The Revenue Authorities Cannot Put Upon Blinkers And Accept These Purchases As Genuine This Proposition Is Duly Supported By Honble Apex Court Decision In The Case Of Sumati Dayal 214 Itr 801 And Durga Prasad M Ore 82 Itr 540 However We Find Sales Have Not Been Doubted In This Case It Is Settled Law From Honble Jurisdictional High Court In The Case Of Nikunj Eximp E Nterprises That When Sales Are Not Doubted 100 Disallowance For Purchases Cannot Be Done However We Find That The Prese Nt Case Is Different From The Above Case As In That Case Before The Honble High Court The Sales Were Made To Government Department Which Is Not The Case Here We Find That On The Facts And Circumstances Of The Case A Disallowance Of 12 5 Of The Bogus P Urchases Would Serve The Interest Of Justice Accordingly We Modify The Order Of Ld Commissioner Of Income Tax Appeals A Nd Direct That Disallowance In This Case Should Be Limited To 12 5 Of The Bogus Purchases 8 The L Earned Counsel Of The Assessee Fairly Agreed To The Above Proposition 9 In The Result This Appeal Filed By The Revenue Stands Partly Allowed Order Pronounced In The Open Court On 11 12 2017 Sd Sd Pawan Singh S Hamim Yahya J Udicial Member A Ccountant Member Mumbai Dated 11 12 2017 5 Ita No 5364 Mum 2015 A Y 2011 12 Asst Cit Vs Shri Himanshu K Modi Roshani Sr Ps Copy Of The Order Forwarded To 1 The Appellant 2 The Respond Ent 3 The Cit A 4 Cit Concerned 5 Dr Itat Mumbai 6 Guard F Ile By Order Dy Asstt Registrar Itat Mumbai