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ACIT-25 (2) , Mumbai Versus Shri Pratap Uttam Purohit and Vice-versa

2017 (1) TMI 448 - ITAT MUMBAI

Non genuine purchases u/s.69C - amount offered to income - double taxation of the same income - Held that:- We have considered rival contentions and found that for the impugned assessment year total purchases from alleged MVAT parties were to the tune of ₹ 2,33,36,015/-. Pursuant to survey action on 27/02/2011, while recording the statement the assessee himself has offered these purchases as his income for A.Y. 2012-13, as he was unable to explain the same at the time of survey. The author .....

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ive material on record. Since the assessee bonafidely offered the income of ₹ 20Crs in AY 2012-13 and also paid the due tax along with interest thereon, taxing the same in the impugned year will amount to double taxation of the same income. Accordingly, we do not find any infirmity in the order of CIT(A) for deleting the said addition. - Addition of 15% of profit element on such purchases - Held that:- From the record, we found that with regard to these purchases, what is to be seen is .....

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lear that during the year consideration, assessee has declared much better gross profit rate of 17.46% as compared to the earlier years, therefore, making further addition of 15% on such purchase appear to be very unreasonable. Keeping in view the gross profit rate so declared by the assessee during the year under consideration, we upheld the addition of 2% on such purchases in place of 15% as upheld by CIT(A). - ITA No.5193/Mum/2014 - Dated:- 4-11-2016 - SHRI R.C.SHARMA, AM AND SHRI AMARJIT SIN .....

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cause for delay in filing the appeal. Accordingly, in the substantial interest of justice we condone the delay of 188 days in filing the appeal by the assessee and the appeal is heard on merits. 2. Rival contentions have been heard and record perused. Facts in brief are that the assessee is an individual and proprietor of M/s Dev Engineers engaged in Civil Construction work. During the year the AO was in receipt of information from the sales Tax Department that the following 10 parties from whom .....

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of the purchase, the AO did not accept the contention of assessee on the ground that : (i) The contention that the payment are made by account payee cheque is not a fail safe method of substantiating the assessee s claim as is already accepted by the persons whose statement, deposition or affidavit that cash is returned after deducting commission/brokerage once cheque is realized. (ii) The assessee could not produce delivery challan, lorry receipt, the mode of transport of goods, evidence of pay .....

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, the CIT(A) upheld the addition of 15% of profit element on such purchases which works out to be ₹ 13,86,035/-, The precise observation of CIT(A) is as under:- 5.1 I have gone through the submissions of the appellant. While the grounds of appeal are two separate grounds dealing with addition of ₹ 92,40,232/- and addition of ₹ 2,33,36,015/-, during the course of appeal the appellant has filed common statement since the addition in both grounds is on account of non genuine purch .....

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be detailed in adjudication' on ground 2 in the case of the appellant the Survey was carried out on 27-02-2011 and the appellant has himself accepted that with respect to 71 parties ( the 10 parties on which the addition in ground No.l is being adjudicated are not apart of these 71 parties) only accommodation entries were being taken and he has accepted the modus operandi being followed by him by way of generation of inflationary bills. It is a separate matter that the appellant has also st .....

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lso remains a fact that the appellant has himself during the course of Survey accepted that he follows the modus operandi of generating cash by using system of bogus bills. During the course of assessment and during the appeal the appellant has given detailed manner of working, however, he has not specifically been able to discharge the entire onus rebutting his own statement made during the course of survey regarding his modus operandi. In light of these findings of the Sales Tax Department and .....

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parties actually resulted in entire cash being siphoned out of the business of the appellant. The decision is taken relying on the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Simit P. Sheth (2013) 356 ITR 451(Guj). Therefore taking the ratio from the case of Smit P. Sheth it is decided that 15% of the profit element of ₹ 92,40,232/- i.e. ₹ 13,86,035/- is to be upheld as addition on this and the appellant gets a relief of ₹ 78,S4,197/-. 5.2. On the sec .....

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e of Survey. Therefore, in light of that the contention of the appellant is accepted that the same income cannot be brought to tax twice and appellant gets relief to the extent of ₹ 2,33,36,015/. 5. Against the above order of CIT(A), assessee and revenue are in appeals before us. 6. We have considered rival contentions and found that for the impugned assessment year total purchases from alleged MVAT parties were to the tune of ₹ 2,33,36,015/-. Pursuant to survey action on 27/02/2011, .....

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of ₹ 2,33,36,015/- was offered as income by the assessee in the assessment year 2012-2013. This finding of CIT(A) has not been controverted by learned DR by bringing any positive material on record. Since the assessee bonafidely offered the income of ₹ 20Crs in AY 2012-13 and also paid the due tax along with interest thereon, taxing the same in the impugned year will amount to double taxation of the same income. Accordingly, we do not find any infirmity in the order of CIT(A) for de .....

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