JAGRUTI G. METHA, MUMBAI v. ITO WD 3(5), KALYAN

ITA 6910/MUM/2016 | 2009-2010
Pronouncement Date: 09-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 691019914 RSA 2016
Assessee PAN ACVPM7552Q
Bench Mumbai
Appeal Number ITA 6910/MUM/2016
Duration Of Justice 11 month(s) 14 day(s)
Appellant JAGRUTI G. METHA, MUMBAI
Respondent ITO WD 3(5), KALYAN
Appeal Type Income Tax Appeal
Pronouncement Date 09-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Partly Allowed
Bench Allotted Not Allotted
Tribunal Order Date 09-11-2017
Assessment Year 2009-2010
Appeal Filed On 25-11-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI R.C.SHARMA AM & SHRI RAM LAL NEGI JM ITA NO. 6910 / MUM/20 16 TO 6912/MUM/2016 ( ASSESSMENT YEAR : 2009 - 10 TO 2011 - 12 ) S MT. JAGRUTI G. MEHTA 104 SIDHI HARMONY PLOT NO.28 AMCHI SH ALA LANE TILAK NAGAR CHEMBUR MUMBAI 400 089 VS. ITO WD 3(5) MUMBAI PAN/GIR NO. ACVPM7552Q APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI BHUPENDRA SHAH REVENUE BY SHRI V. JUSTIN DATE OF HEARING 08 / 11 /201 7 DATE OF PRONO UNCEME NT 09 / 11 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - 1 THANE DATED 19/09/2016 FOR A.YRS.2009 - 10 2010 - 11 AND 2011 - 12 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S . 147 OF THE IT ACT. 2. COMMON GROUNDS TAKEN IN ALL THE YEARS RELATE TO REOPENING OF ASSESSMENT AND ESTIMATION OF PROFIT ON THE ALLEGED BOGUS PURCHASES MADE BY THE ASSESSEE. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT A SSESSEE IS ENGAGED IN TRADING OF HARDWARE AND ENGINEERING GOODS. CERTAIN INFORMATION HAS. BEEN RECEIVED FROM THE DGIT (INV) PUNE ITA NO. 6910/MUM/2016 TO 6912/MUM/2016 SMT. JAGRUTI G. MEHTA 2 VIDE LETTER NO.PN/ DGTT/SALES TAX HAWALA/2012 - 13/2179 DATED 6 - 2 - 2013 TO THE EFFECT THAT THE SALES TAX DEPARTMENT MUMBAI HAS U NEARTHED A RACKET INVOLVING MORE THAN 1935 HAWALA DEALERS INVOLVED IN ISSUING BOGUS INVOICES TO ALLOW A TRADER TO CLAIM TAX CREDITS AND THERE ARE MORE THAN 37 000 BENEFICIARIES WHO CLAIMED SUCH BOGUS PURCHASES AS WELL AS BOGUS TAX CREDITS. IT IS ALSO REVEA LED FROM THE STATEMENTS RECORDED BY THE SALES TAX DEPT U/S.14 OF MAHARASHTRA VALUE ADDED TAX ACT 2002 OF THE HAWALA DEALERS AND THE AFFIDAVITS FILED BY THEM THAT THE HAWALA DEALERS IN FACT DID NOT DO ANY GENUINE BUSINESS AND THEY HAVE ONLY ISSUED BOGU S SALE BILLS TO VARIOUS PARTIES WITHOUT SUPPLYING ANY GOODS. THERE ARE NO CORRESPONDING PURCHASES TO SUCH BOGUS SALE BILLS. THE BOGUS SALE BILLS WERE SUPPLIED ON COMMISSION BASIS. THE PAYMENTS RECEIVED IN THE FORM OF CHEQUES HAVE BEEN CREDITED IN THE BANK .A/C. THEREAFTER CASH IS WITHDRAWN AND RETURNED TO THE BENEFICIARY AFTER DEDUCTING THEIR COMMISSION. THUS THE INVESTIGATION CARRIED OUT BY THE SALES TAX DEPARTMENT REVEALED THAT THE HAWALA OPERATOR POSING AS THE 'SELLER' EXISTS ONLY ON PAPER ISSUES FAKE BILL TO A CONCERN AND GETS A CUT IN RETURN. THE BENEFICIARY IN TURN GETS THE INPUT TAX CREDIT ON THE MATERIAL HE HAD NEVER PURCHASED IN REALITY. AO ADDED 100% OF SUCH BOGUS PURCHASES IN ASSESSEES INCOME. 4. BY THE IMPUGNED ORDER CIT(A) RESTRICTED THE A DDITION TO THE EXTENT OF 12.5% AFTER FOLLOWING THE DECISION OF GUJARAT HIGH COURT IN CASE OF SIMIT P SETH. ITA NO. 6910/MUM/2016 TO 6912/MUM/2016 SMT. JAGRUTI G. MEHTA 3 5. AGAINST THE ABOVE ORDER OF CIT(A) ASSESSEE IS IN FURTHER APPEAL BEFORE US. IT WAS ARGUED BY LEARNED AR THAT ASSESSEE HAD ALREADY PAID VAT ON THE A LLEGED BOGUS PURCHASES THEREFORE THERE IS NO BENEFIT FOR SUCH VAT. WE FOUND THAT WHILE RESTRICTING ADDITION TO THE EXTENT OF 12.5% CIT(A) HAS ALSO TAKEN COGNIZANCE WITH REGARD TO VAT HAVING NOT BEEN PAID BY THE ASSESSEE AND ASSESSEE HAVING BEEN BENEFITT ED BY THE AMOUNT OF VAT WHICH HE WAS REQUIRED TO PAY IN CASE OF GENUINE PURCHASES. WE ALSO FOUND THAT THE GP RATE DECLARED BY THE ASSESSEE IS 13.31% WHICH APPEARS TO BE REASONABLE LOOKING INTO THE NATURE OF TRADE ASSESSEE BEING ENGAGED. CONSIDERING THE TO TALITY OF FACTS AND CIRCUMSTANCES OF THE CASE WE RESTORE THE MATTER BACK TO THE FILE OF AO AND TO VERIFY THE ACTUAL VAT PAID BY ASSESSEE AND DIRECT THE AO TO REDUCE THE AMOUNT BY VAT ACTUALLY PAID BY THE ASSESSEE WHILE COMPUTING ADDITION @12.5% OF THE BOG US PURCHASES. MEANING THEREBY THE TOTAL ADDITIO N TO BE UPHELD SHOULD BE 12.5% MINUS ACTUAL VAT PAID BY THE ASSESSEE. AO TO VERIFY THE ACTUAL PAYMENT OF SUCH VAT AND DECIDE THE ISSUE AFRESH IN TERMS OF OUR ABOVE OBSERVATION. 6. IN THE RESULT APPEALS OF AS SESSEE ARE ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 09 / 11 /2017 S D/ - ( RAM LAL NEGI ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 09 / 11 /201 7 KARUNA SR. PS ITA NO. 6910/MUM/2016 TO 6912/MUM/2016 SMT. JAGRUTI G. MEHTA 4 COPY OF THE ORDER FORWARDED TO : BY ORDER ( ASSTT. REGISTRAR) ITAT MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) MUMBAI. 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. //TRUE COPY//