9911796707
TMI Blog2018 (10) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... metax Appellate Tribunal comprising of Hon'ble Shri Mahavir Singh, JM and Hon'ble Shri G. Manjunatha, AM, by their consolidated order dated 08.06.2018. 2. The applicant submits that there are certain mistakes apparent from the record in the order passed dated 08.06.2018. The same are as under i) In para 6, page 11 of the ITAT order, it is observed that - "..... The learned counsel for the assessee also filed complete stock register and stated tha! the AO has not doubted the sales executed by the assessee on account of purchase disclose from hawala parties...... " There is an error in the above observation because the purchases made of Rs. 4,59,25,643/- in AY 2010-11; Rs. 6,96,36,974/- in AY 2011-12 & Rs. 2,64,43,393/- in AY 2012-13 relates to purchases of gift items, etc. which are distributed to dealers etc. Thus, there is NO SALE of such goods and are NOT included in stock register - as observed in the ITAT order. These are vital facts of the present case and therefore the observation made in ITAT order requires modification/rectification. ii) In para 8, page 15 of the ITAT order, it is observed that - "....... We have noticed from the assessment order and (he or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..... " The above offer was thereafter contested on merits in the course of assessment proceedings and also during CIT(A) appellate proceedings. However, the ITAT order docs not contain this factual aspect of the matter. Hence, there is error and requires modification/rectification. v) In first para, page 2 of ITAT order, it is mentioned that "these three appeals by the assessee are arising out of the orders of Commissioner of Income Tax (Appeals)- 44, Commissioner of Income Tax (A)~48 Mumbai ..... " The applicant submits that the three appeals are arising out of the orders of-CIT (A) - 12 for AY 2010-11, CIT (A) - 48 for AY 2011-12 & CIT (A) - 52 for AY 2012-13. Hence, this is factual error and requires modification / rectification. vi) On the first page of ITAT order, the Respondents for each of the three asstt. years are required to be mentioned as under in place of "The Dy.Commissioner of Income-tax, Circle-6(2)" mentioned as common for all three asstt. years. A.Y.2010-11 : Dy.CIT Circle-6(2), Aaykar Bhavan, M.K.Road, Mumbai-400 020. Y.2011-12 : ACIT, Central Circle-13, Pratishtha Bhavan, M.K.Road, Mumbai-400 020. "A.Y.2012-13 : Dy.CIT, Central Circle-2(3), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under:- "1. These three appeals by the assessee are arising out of the orders of Commissioner of Income-tax (Appeals)-44, Mumbai in appeal No.CIT(A)-12-IT-204/DCIT 6(3)(1)/2015-16, CIT(A)-48, Mumbai, No.CIT(A)-48- IT.594/ACCC-13/2014-15 and CIT(A)- 52/IT/DC-CC-2(3)/300/2016-17 dated 28.01.2016, 20.11.2015, 08.03.2017." 7. The Ld.AR referring to miscellaneous application, submitted that in para 6, page 11 of the ITAT order it was observed that the Ld.Counsel for the assessee has filed complete stock register and stated that the AO has not doubted the sales executed by the assessee on account of purchases disclosed from hawala parties. But, while narrating facts of the case, the ITAT has ignored the arguments made by the Ld.Counsel that the assessee is involved in the business of manufacturing pharmaceutical products. In the process, it has purchased gift items, etc. which are distributed to dealers directly from its godown at Bhiwandi, Mumbai where more than 90% of the sales promotional items are purchased and delivered. These sales promotional items are distributed to its distributors / medical representatives / PSOs through the C & F agents across the country. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the issue. Therefore, there is no merit in the contents of miscellaneous applications filed by the assessee and hence, miscellaneous applications filed by the assesse may be rejected. 9. We have heard both the parties, perused the material available on record and gone through the order passed by the ITAT on 08-06-2018. The assessee has narrated the mistakes apparent in the order dated 08- 06-2018 insofar as factual aspects of the matter, but never disputed the final conclusion arrived at by the ITAT in directing the AO to estimate 30% net profit on alleged bogus purchases. We find that while narrating the facts, the ITAT has stated that the assessee has purchased goods from grey market and to cover up such purchases, obtained bogus purchase bills from hawala operators. We further notice that the ITAT further stated that the assessee has furnished complete details of stock registers and also the AO and the Ld.CIT(A) never disputed sales declared by the assessee. The payments have been made by account payee cheques for alleged bogus purchases. Once the sales are not doubted, then general presumption is that assessee might have purchased goods from market and obtained purchase bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sales promotional items including booklets containing product details, etc., are distributed through the C&F agents across the country. The assessee is purchasing these sales promotional items regularly since from beginning. The department never disputed the sales promotional expenses claimed by the assessee for the earlier years. During the year under consideration, only on the basis of information received from DGIT(Inv) which is supported by the findings of Sales-tax department, the AO has disputed the sales promotion expenses ignoring all evidences filed by the assessee including complete details of purchases and distribution of such sales promotional items. It is not the case of the department that payment made for these purchases came back to the assessee from the suppliers withdrawing equal cash from their bank accounts against payment received from the assessee. The assessee has also not taken any credit for the sales-tax paid by it on the said purchases. As such, the salestax department is also not put to any loss due to non payment, if any of sales-tax collected by those suppliers from the assessee on the above purchases. The so-called declarations made by the suppliers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s capital goods vide ground No.4, the ITAT has inadvertently omitted to give its findings. Therefore, we are of the considered view that there is error in so far as non consideration of ground no. 4 and accordingly, we decide the issue as under. 12. We have heard both the sides and considered materials on record. We find that the ITAT, Mumbai Bench in the case of New Consolidated Construction Co Ltd vs DCIT (supra) has considered similar issue and held that findings given in respect of purchases of raw materials shall apply to purchases of capital goods in case of alleged bogus purchases and accordingly direct the AO to estimate 12.5% profit on alleged bogus purchases of capital goods and balance amount shall be treated as capital asset and depreciation shall be allowed at the prescribed rates. Facts of the present case are identical to the facts which have been already considered by the ITAT in the case of New Consolidated Construction Co Ltd, except to the extent of rate of net profit. In the present case we have directed the AO to estimate net profit of 30% on alleged bogus purchases. Therefore, considering the facts and circumstances of this case and consistent with the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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