KITTENS SHOES AND ALLIED PRODUCTS PVT. LTD., MUMBAI v. ITO 1(2)(2), MUMBAI

ITA 7091/MUM/2018 | 2010-2011
Pronouncement Date: 12-03-2021 | Result: Partly Allowed

Appeal Details

RSA Number 709119914 RSA 2018
Assessee PAN AABCK6248A
Bench Mumbai
Appeal Number ITA 7091/MUM/2018
Duration Of Justice 2 year(s) 3 month(s) 5 day(s)
Appellant KITTENS SHOES AND ALLIED PRODUCTS PVT. LTD., MUMBAI
Respondent ITO 1(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 12-03-2021
Last Hearing Date 18-03-2020
First Hearing Date 15-12-2020
Assessment Year 2010-2011
Appeal Filed On 07-12-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI !' #$ % BEFORE SHRI. SHAMIM YAHYA ACCOUNTANT MEMBER & SHRI VIKAS AWASTHY JUDICIAL MEMBER . 7091/ / 2018 ($). . 2010-11 ) ITA NO.7091/MUM/2019(A.Y.2010-11) KITTENS SHOES AND ALLIED PRODUCTS PVT. LTD. 9 DHANSHREE BUILDING P.G.SOLANKI PATH LAMINGTON ROAD MUMBAI 400 007. PAN: AABCK6248A ...... '+ /APPELLANT ) VS. INCOME TAX OFFICER 1(2) (2) AAYKAR BHAVAN M.K.ROAD MUMBAI 400 020. ..... $-/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI GURBINDER SINGH ).$- '/ DATE OF HEARING : 15/12/2020 /01 .$- '/ DATE OF PRONOUNCEMENT : 12/03/2021 / ORDER PER VIKAS AWASTHY J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2 MUMBAI ( IN SHORT THE CIT( A)) DATED 31/07/2018 FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN RETAIL TRADING OF KIDS WEAR AND ACCESSOR IES. ON THE BASIS OF INFORMATION RECEIVED BY THE DGIT(INVN) FROM THE SALES TAX DEP ARTMENT GOVERNMENT OF 2 . 7091/ / 2018 ($). . 2010-11 ) ITA NO.7091/MUM/2019(A.Y.2010-11) MAHARASHTRA THE ASSESSMENT IN THE CASE OF ASSESSEE WAS REOPENED. AS PER THE INFORMATION RECEIVED THE ASSESSEE HAS OBTAINED BOG US PURCHASE BILLS AGGREGATING TO RS.2 11 58 438/- FROM FOLLOWING HAWALA OPERATORS: S.NO. NAME OF PARTY AMOUNT.(RS.) 1. SAKHTI TRADING CO. 1 86 49 4 63/- 2. M/S.MARUTI IMPEX 25 08 97 5/- TOTAL 2 11 58 438/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSEE FAILED TO SUBSTANTIATE TRAIL OF GOODS AND THE GENUINENESS OF SUPPLIERS. SINCE THE SALES DECLARED BY THE ASSESSEE WERE ACCEPTED BY THE ASSESSING OFFICER THE ASSESSI NG OFFICER CONCLUDED THAT THE ASSESSEE MIGHT HAVE MADE PURCHASES FROM GREY MARKET AND HAS OBTAINED MATCHING BOGUS BILLS FROM THE BOGUS ENTRY PROVIDERS. THE AS SESSING OFFICER FURTHER OBSERVED THAT IN ASSESSMENT YEAR 2008-09 THE ADDITIONS WERE MADE IN ASSESSEES CASE ON ACCOUNT OF TRANSACTIONS WITH HAWALA OPERATORS. THE ADDITION OF 25% WAS ACCEPTED BY THE ASSESSEE. THE ASSESSING OFFICER FOLLOWING THE SAME CRITERIA MADE ADDITION BY ESTIMATING PROFIT @ 25% ON BOGUS PURCHASES. AGGRIE VED BY THE ASSESSMENT ORDER DATED 29/03/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT) THE ASSESSEE FILED APPE AL BEFORE THE CIT(A) INTER-ALIA ASSAILING THE ADDITION ON ACCOUNT OF BOGUS PURCHASE S AND IN NOT ALLOWING DEDUCTION OF BROUGHT FORWARD BUSINESS LOSSES OF RS.48 91 792/ . THE FIRST APPELLATE AUTHORITY AFTER EXAMINING THE FACTS OF CASE AND CONSIDERIN G THE SUBMISSIONS OF THE ASSESSEE GRANTED PART RELIEF TO THE ASSESSEE BY RESTRICTED T HE G.P ON BOGUS PURCHASES TO 12.5%. NOW THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL IMPUGNING THE ADDITIONS CONFIRMED BY THE CIT(A). 3. SHRI GURBINDER SINGH REPRESENTING THE DEPARTM ENT VEHEMENTLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE AP PEAL BY ASSESSEE. THE 3 . 7091/ / 2018 ($). . 2010-11 ) ITA NO.7091/MUM/2019(A.Y.2010-11) LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE A SSESSEE HAS FAILED TO DISCHARGE HIS ONUS IN PROVING THE GENUINENESS OF PURCHASES AN D THE DEALERS. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD.DEPART MENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE IN APPEAL HAS RAISED SEVEN GROUNDS. THE GROUNDS NO.1 TO 4 OF THE APPEAL ARE IN RESPECT OF BOGUS PURCHASES. THE CONTENTION OF THE ASSESSEE BEFORE T HE FIRST APPELLATE AUTHORITY IS THAT THE ASSESSEE HAS BEEN ABLE TO PROVE GENUINENESS O F PURCHASES BY FURNISHING VARIOUS DOCUMENTS. THE ASSESSEE HAS FURTHER CONTENDED THAT WHILE DETERMINING THE PURCHASES THE AUTHORITIES BELOW HAS FAILED TO CONSI DER PURCHASE RETURNS AND THE STOCK IN HAND AVAILABLE AT THE YEAR END. THE AVAIL ABILITY OF STOCK IN HAND WOULD NULLIFY THE IMPACT OF PURCHASES ON PROFIT. THE ASSESSEE HA S FURTHER CONTENDED THAT IN THE P&L ACCOUNT ONLY NET PURCHASES ARE REFLECTED. TAKI NG IN TO CONSIDERATION ENTIRETY OF FACTS WE DEEM IT APPROPRIATE TO RESTORE GROUNDS NO .1 TO 4 OF THE APPEAL TO THE FILE OF ASSESSING OFFICER FOR FRESH CONSIDERATION AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANCE WITH LAW. C ONSEQUENTLY GROUNDS NO. 1TO 4 OF THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. 5. IN GROUND NO.5 OF THE APPEAL THE ASSESSEE HAS CO NTESTED THAT THE ASSESSING OFFICER HAS ERRED IN NOT ALLOWING DEDUCTION AGAINST BROUGHT FORWARD BUSINESS LOSSES AND UNABSORBED DEPRECIATION. WE FIND THAT THE ASSE SSEE IN GROUNDS OF APPEAL BEFORE THE FIRST APPELLATE AUTHORITY HAS RAISED SPECIFIC ISSUES AS GROUND NO.5 HOWEVER THE SAME HAS NOT BEEN ADJUDICATED BY THE CIT(A). WE FU RTHER OBSERVE THAT IN GROUNDS OF APPEAL BEFORE THE CIT(A) THE ASSESSEE HAS MENTION ED THAT RECTIFICATION APPLICATION HAS BEEN FILED BEFORE THE ASSESSING OFFICER TO ALLO W DEDUCTION OF BROUGHT FORWARD BUSINESS LOSS. THE FATE OF SAID APPLICATION IS NOT KNOWN. WE DIRECT THE ASSESSING OFFICER TO DISPOSE OF THE SAID RECTIFICATION APPLI CATION FILED BY THE ASSESSEE WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF RECEIPT OF TH IS ORDER IF THE SAME IS STILL 4 . 7091/ / 2018 ($). . 2010-11 ) ITA NO.7091/MUM/2019(A.Y.2010-11) PENDING FOR DISPOSAL. CONSEQUENTLY GROUND NO.5 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 6. THE GROUND NO.6 AND 7 OF THE APPEAL ARE GENERAL IN NATURE HENCE REQUIRE NO ADJUDICATION. 7. IN THE RESULT APPEAL BY THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY T HE 12 TH DAY OF MARCH 2021. SD/- SD/- (SHAMIM YAHYA) (VIKAS AWAS THY) / ACCOUNTANT MEMBER #$ / JUDICIAL MEMBER / MUMBAI 2)/ DATED 12/03/2021 VM SR. PS (O/S) $-3!4!1- COPY OF THE ORDER FORWARDED TO : 1. '+ / THE APPELLANT 2. $- / THE RESPONDENT. 3. 5- ( )/ THE CIT(A)- 4. 5- CIT 5. !67 $-$) . . . / DR ITAT MUMBAI 6. 789:; / GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT MUMBAI