BAJRANGLAL BHIKARAM MITTAL, MUMBAI V. ACIT- 17(1), MUMBAI

CO 252/MUM/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1394 (ITAT-MUMBAI)
• Duration Of Justice: 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 18-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Assessee Lawyers: Y P TRIVEDI; USHA DALAL A RS
• Keywords: Bogus purchase; Set aside
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM ITA NO. 6801/MUM/2018 ( ASSESSMENT YEAR: 2011-12) ACIT-17(1), MUMBAI, ROOM NO. 117, AAYAKAR BHAVAN, M.K. MARG, MUMBAI-400020. VS. BAJARANGLAL B MITTAL, 310, GOKUL, 80A, BARODA STREET, IRON MARKET, MUMBAI- 400009. PAN/GIR NO.AFGPM 0969 R (APPELLANT ) .. (RESPONDENT ) C.O. NO. 252/MUM/2019 (ARISING OUT OF ITA NO. 6801/MUM/2018) ( ASSESSMENT YEAR: 2011-12) BAJARANGLAL B MITTAL, 310, GOKUL, 80A, BARODA STREET, IRON MARKET, MUMBAI- 400009. VS. ACIT-17(1), MUMBAI, ROOM NO. 117, AAYAKAR BHAVAN, M.K. MARG, MUMBAI-400020. PAN/GIR NO. AFGPM 0969 R (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI KUMAR PADMAPANI BORA (DR) ASSESSEE BY SHRI Y.P. TRIVEDI & MS. USHA DALAL (ARS) DATE OF HEARING 12/12/2019 DATE OF PRONOUNCEMENT 12/12/2019 / O R D E R PER: R.C. SHARMA, A.M. THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-55, MUMBAI DATED 21/09/2018 FOR THE A.Y. 2011-12 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN S HORT, THE ACT). ITA NO. 6801/MUM/2018 & CO 252/MUM/2019 ACIT VS. BAJRANGLAL B MITTAL 2 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ACTION OF THE LD. CIT(A) FOR RESTRICTING THE ADDITION ON ACCOUNT OF B OGUS PURCHASES TO THE EXTENT OF 8% AGAINST THE ADDITION MADE BY THE A.O. AT 12.5% OF BOGUS PURCHASES. THE ASSESSEE IS AGGRIEVED FOR UPHOLDING THE PART OF THE ADDITION SO UPHELD BY THE LD. CIT(A). 3. AT THE OUTSET, THE LD AR OF THE ASSESSEE PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 2009-10 AND 2010-11 DATED 30/04/2019 WHEREIN UNDER SIMILAR FACTS AND CI RCUMSTANCES, THE ADDITION WAS UPHELD TO THE EXTENT OF 4% AFTER HAVIN G THE FOLLOWING OBSERVATION: 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT UNDISPUTEDLY THE ASSESSEE WAS BENEFICIARY OF HAWALA PURCHASE TRANSACTIONS TO THE TUNE OF RS.2,75,72,165/-. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS F ILED NECESSARY EVIDENCES IN THE FORM OF PURCHASE BILLS O F THE SUPPLIER, SALES BILLS OF THE CUSTOMER TO WHOM T HE GOODS WERE SOLD, STOCK TALLY, RECEIPT/PROOF OF TRANSPORTATION OF MATERIAL, RECEIPT OF WEIGHING BRI DGE ETC. ALONGWITH BANK STATEMENTS EVIDENCING THE PAYMENT TO THE SUPPLIER AND RECEIPT OF PAYMENTS FRO M THE CUSTOMER AGAINST THE SALES. IT IS ALSO UNDISPUT ED THAT ASSESSEE IS A DEALER IN IRON AND STEEL WHEREIN THE MARGIN OF PROFIT IS VERY MEAGER AND APPLICATION OF 12.5% RATE TO ASSESS THE BOGUS PURCHASES APPEARS TO BE UNREALI STIC. THEREFORE THE ORDER OF LD. CIT(A) WHEREBY THE ORDER OF AO HAS ITA NO. 6801/MUM/2018 & CO 252/MUM/2019 ACIT VS. BAJRANGLAL B MITTAL 3 BEEN UPHELD CANNOT BE SUSTAINED. IT IS UNDISPUTED T HAT THE NOTICES UNDER SECTION 133(6) WERE EITHER NOT SERVED OR WHER E SERVED WERE NOT RESPONDED BY THE SUPPLIERS. IN SUCH TYPE O F SCENARIO THE ONLY POSSIBLE PRESUMPTION UNDER THE PRESENT FAC TS AND CIRCUMSTANCES IS THAT THE ASSESSEE MIGHT HAVE PURCHASED THE GOODS FROM THE GREY MARKET THEREBY MAKING SAVINGS IN THE FORM OF NON PAYMENT OF VAT AN D OTHER INCIDENTAL LEVIES. THE LD. A.R. ALSO FILED A CHART SHOWING A COMPARATIVE GP OVER THE YEARS AND WE NOTICE THEREFR OM THAT GP DURING THE YEAR IS 3.11% WHICH IS SHOWING AN INCREA SING/UPWARD TREND OVER THE EARLIER YEARS/PRECEDING PREVIOUS YEA RS. THE CO- ORDINATE BENCHES OF THE TRIBUNAL IN THE SIMILAR CIR CUMSTANCES HAVE TAKEN A VIEW THAT THE GP ADDITION RANGING FROM 4% TO 7% WOULD BE REASONABLE DEPENDING UPON THE FAC TS OF THE CASE. UNDER THE PRESENT FACTS, WE ARE OF THE VIEW T HAT IT WOULD BE REASONABLE IF THE ADDITION IS MADE @ 4% OF THE BOGUS PURCHASES TO ASSESSEE THE VARIOUS SAVINGS MAD E BY THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD . CIT(A) AND DIRECT THE AO TO ASSESS THE PURCHASES @ 4% OF THE B OGUS PURCHASES INSTEAD OF 12.5% BY CIT(A). 4. WE HAD CAREFULLY GONE THROUGH THE ORDER OF THE T RIBUNAL AND FOUND THAT THE FACTS AND CIRCUMSTANCES DURING THE Y EAR UNDER CONSIDERATION ARE PARI MATERIAL AS DISCUSSED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT Y EAR. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, WE MODIFY THE ORDER OF THE LOWER AUTHORITIES AND UPHOLD ADDITION TO THE EXTENT OF 4% OF THE ALLEGED BOGUS PURCHASES. ITA NO. 6801/MUM/2018 & CO 252/MUM/2019 ACIT VS. BAJRANGLAL B MITTAL 4 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D WHEREAS C.O. OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER, 2019. SD/- (VIKAS AWASTHY) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 12/12/2019 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//