Pr. Commissioner Of Income Tax -20, ... vs Nisrin Deesawala Prop. Shabbir Traders
2024 Latest Caselaw 13825 Bom

Bombay High Court

Pr. Commissioner Of Income Tax -20, ... vs Nisrin Deesawala Prop. Shabbir Traders on 3 May, 2024

Author: Neela Gokhale

Bench: K. R. Shriram, Neela Gokhale

          Digitally
  2024:BHC-OS:7350-DB
          signed by
          SHAMBHAVI
SHAMBHAVI NILESH
NILESH    SHIVGAN                                              1/3                          73-itxa-1463-2018.doc
SHIVGAN   Date:
          2024.05.07
          10:47:05
          +0530


                                    IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                         ORDINARY ORIGINAL CIVIL JURISDICTION

                                           INCOME TAX APPEAL NO.1463 OF 2018

                         Principal Commissioner of Income Tax-20,
                         Mumbai                                                         ...Appellant
                               Versus
                         Nisrin Deesawala Prop. Shabbir Traders                         ...Respondent


                         Ms. Mamta Omle, for Appellant.
                         None for Respondent.


                                                      CORAM:         K. R. SHRIRAM &
                                                                     DR. NEELA GOKHALE, JJ.

                                                      DATED:         3RD MAY 2024
                         PC:-

1. Ms. Mamta Omle states that the following substantial questions

of law are proposed:

a) Whether on the facts and the circumstances of the case and in law, the Hon'ble ITAT has erred in granting relief of Rs.3,06,42,150/- by restricting the addition from @2.06% to alleged purchases ?

b)Whether on the facts and the circumstances of the case and in law, the Hon'ble ITAT has failed to appreciate the fact that the assessing officer disallowed 12.5% of the total bogus purchases relying on various case laws ?

c) Whether on the facts and the circumstances of the case and in law, the Hon'ble ITAT has failed to appreciate the fact that the onus is on the assessee to explain and substantiate the genuineness and true nature of the purchases transaction ?

d) Whether on the facts and the circumstances of the case and in law, the Hon'ble ITAT has failed to appreciate that the parties have admitted on oath before the Sales Tax Authorities that they have not sold any material to anybody ?

e) Whether on the facts and the circumstances of the case and in law, the Hon'ble ITAT failed to appreciate that in such cases the onus is on the assessee to show that there were Shivgan

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bogus purchases as well as bogus sales without details of £-

such sales & purchases, without which it cannot be assumed that such was the case only profit earned on such exercise was taxable ?

f) Whether on the facts and the circumstances of the case and in law, the Hon-ble ITAT erred in concluding that assessee had made cash purchases from other parties which were not recorded in the books without mentioning how this and with what evidence before him such finding was arrived at. If such evidence of cash purchases was given the same should have been remanded to the A.O. for his examination and comments?

g) Whether on the facts and in the circumstances of the case, and in view of the Hon-ble Supreme Court's judgment dated 16.01.2017 in the case of N.K.Proteins Ltd Vs DCIT [2017] 84 taxmann.com 195 (SC), it was incumbent on the ITAT to restrict the addition made on account of Bogus Purchases', it having once come to a categorical finding that such total No. amount of addition made represented alleged purchases from bogus suppliers?

2. In Paragraphs 5 and 6, the Income Tax Appellate

Tribunal ("ITAT") has considered the case on merits and

disposed it on factual matrix of the matter. Paragraphs 5 and 6

of the impugned order reads as under:

5. We have heard the contentions and perused the relevant material on record. We are of the considered opinion that there could be no sale without purchases. The sales turnover achieved by the assessee has not been disputed by the revenue and the payments were through banking channels. The assessee provided quantitative reconciliation of the material along with delivery challans / transport receipts during proceedings. On the other hand, the assessee could not of the party for confirmation of the transaction. However, lack proper investigation on the part of Ld. AO. The.Ld.AO, prima facie, without making any independent inquiries or without any confirmations etc. from the alleged bogus suppliers, rejected the same straightway and made the additions merely by placing reliance on the website information, which, in our opinion, was not justified. It is settled law that additions could not be made merely on the basis of suspicion, conjectures or surmises. The Ld. AO failed to bring on record any cogent material to establish the fact that the purchases were not genuine and no inquiries or efforts, whatsoever of any nature, were made by Ld. AO to

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substantiate his stand. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit Assessment Years-2010-11 & 2011-12 earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against bogus purchases, which Ld.CIT(A) has rightly done.

6. In view of the above, the stand of Ld.CIT(A), being fair & logical' one. is confirmed which result into dismissal of revenue's appeal.

3. We concur with the findings of the Tribunal. Therefore, no

substantial question of law arises.

4. Appeal dismissed.

(DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)

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