Raghavendra P. Joshi v. ITO 3(2), Thane
[Citation -2019-LL-0830-37]

Citation 2019-LL-0830-37
Appellant Name Raghavendra P. Joshi
Respondent Name ITO 3(2), Thane
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 30/08/2019
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags documentary evidence • bogus purchase • disallowance of purchases • reopening of assessment • actual purchase
Bot Summary: Chaitanya Anjaria /Date of Hearing : 10.06.2019 /Date of Pronouncement : 30.08.2019 ORDER PER SHAHMIM YAHYA, Accountant Member: This is an appeal by the assessee wherein the assessee is aggrieved that the learned CIT A has erred in sustaining 100 disallowance on account of bogus purchases amounting to Rs. 7,27,940/-. Brief facts of the case are that assessee is engaged in business of engineering jobs works. Upon assessees appeal Ld. CIT(A) confirmed the same. Up on careful consideration I find that assessee has provided the documentary evidence for the purchase. In the present case the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In the result assessee's appeal is partly allowed.


THE INCOME TAX APPELLATE TRIBUNAL SMC Bench, Mumbai Before Shri Shamim Yahya (AM) I.T.A. No.4227/Mum/2018 (Assessment Year: 2009 -10) Raghavendra P. Joshi / ITO 3(2) (Prop. M/s. Jupiter Room No. 04, 3 Wing, Engineering Works) Gala v. Ashar IT Park, 6 t h Floor, No.5, Pramila Industrial Wagle Indl. Estate, Estate, Plot No. 268, Thane 400604 Upvan, Thane 400606 PAN: AAFFS6604P (Appellant) .. (Respondent) Assessee by: None Revenue by: Shri. Chaitanya Anjaria /Date of Hearing : 10.06.2019 /Date of Pronouncement : 30.08.2019 ORDER PER SHAHMIM YAHYA, Accountant Member: This is appeal by assessee wherein assessee is aggrieved that learned CIT has erred in sustaining 100% disallowance on account of bogus purchases amounting to Rs. 7,27,940/-. 2. Brief facts of case are that assessee is engaged in business of engineering jobs works. information was received from sales tax Department that assessee has engaged in bogus purchases. assessment was accordingly reopened. 3. assessing officer in this case has made 100% addition on account of bogus purchases amounting to Rs. 7,27,940/-. Upon assessees appeal Ld. CIT(A) confirmed same. Raghavendra P. Joshi I.T.A. No.4227/Mum/2018 4. Against above order assessee is in appeal before ITAT. I have heard Ld. DR and perused records. None appeared on behalf of assessee despite notice. 5. Up on careful consideration I find that assessee has provided documentary evidence for purchase. Adverse inferences have been drawn due to inability of assessee to produce suppliers. I find that in this case sales have not been doubted. No defect has been pointed in any other working of assessee. It is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. rationale being no sales is possible without actual purchases and consumption. This proposition is supported from honorable jurisdictional High Court decision in case of Nikunj Eximp enterprises (in writ petition no 2860, order dt 18.6.2014). In this case honorable High Court has upheld hundred percent allowance for purchases said to be bogus when sales are not doubted. However in that case all supplies were to government agency. In present case facts of case indicate that assessee has made purchase from grey market. Making purchases through grey market gives assessee savings on account of non-payment of tax and others at expense of exchequer. In such situation in my considered opinion on facts and circumstances of case 12.5 % disallowance out of bogus purchases meets end of justice. Accordingly, I direct that disallowance is this case be restricted to 12.5% of bogus purchases. 7. In result assessee's appeal is partly allowed. Order has been pronounced in Court on 30.8.2019. Sd/- (SHAMIM YAHYA) ACCOUNTANT MEMBER Mumbai, dated: 30.08.2019 2 Raghavendra P. Joshi I.T.A. No.4227/Mum/2018 Nishant Verma Sr. Private Secretary copy to 1. appellant 2. Respondent 3. CIT(A) Concerned, Mumbai 4. CIT- Concerned, Mumbai 5. DR Bench, 6. Master File // Tue copy// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 3 Raghavendra P. Joshi v. ITO 3(2), Thane
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