GANPAT METAL, MUMBAI V. ITO, WARD-19(1)(3), MUMBAI

ITA 1000/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4539 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Bogus purchase
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1000/MUM/2019(A.Y.2010-11) GANPAT METAL INDUSTRIESL SHOP NO.3, NARAYAN NIWAS, 2 ND KHETWADI LANE, NEAR ALANKAR CINEMA, MUMBAI 400 004. PAN:AAGFG1194B ...... A PPELLANT VS. INCOME TAX OFFICER , WARD 19(1)(3), 2 ND FLOOR, ROOM NO.220, MATRU MANDIR, TARDEO ROAD, MUMBAI 400 007 ..... RESPONDENT APPELLANT BY : SHRI ADITYA RAMACHANDRAN RESPONDENT BY : SHRI AMIT PRATAP S INGH DATE OF HEARING : 10/02/2020 DATE OF PRONOUNCEMENT : 10/02/2020 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 7, MUMBAI ( IN SHORT THE CIT(A) ) DATED 18/12/2018 FOR ASSESSMENT YEAR 2010-11. 2 ITA NO.1000/MUM/2019(A.Y.2010-11) 2. SHRI ADITYA RAMACHANDRAN, APPEARING ON BEHALF O F THE ASSESSEE SUBMITTED THAT THE SOLITARY GROUND IN THIS APPEAL I S AGAINST THE ADDITION MADE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. THE LD.AUTH ORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IN REASSESSMENT PROCEED INGS, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAD INDULGED IN OBTA INING BOGUS PURCHASE BILLS AGGREGATING TO RS.59,69,054/- FROM VARIOUS HAWALA P ARTIES. THE ASSESSING OFFICER ESTIMATED GP @ 12.5% ON THE ALLEGED BOGUS P URCHASES AND MADE ADDITION OF RS.7,46,132/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 07/03/2016 PASSED UNDER SECTION 144 R.W.S. 147 OF T HE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), THE ASSESSEE FILED APPEAL BEFO RE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED ADDITION. 3. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE CONTENDED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN F ERROUS AND NON-FERROUS METALS. THE GP @ 12.5% ESTIMATED BY THE AUTHORITIE S BELOW IS VERY MUCH ON THE HIGHER SIDE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF TRIBUNAL IN THE CASE O F MUKESH SAMARTHMAL JAIN VS. ITO, IN ITA NO.7476/MUM/2018 DECIDED ON 31/01/202 0, WHEREIN GP @ 4% ON ALLEGED BOGUS PURCHASES WAS DETERMINED. 4. ON THE OTHER HAND, SHRI AMIT PRATAP SINGH, REPRE SENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE APPEAL OF ASSESSEE. 5. WE HAVE HEARD RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE ADDITION HAS BEEN MADE ON ACCOUNT OF BOGUS PURCHASES. IT IS A WELL SETTLED LEGAL POSITION NOW, THAT WHERE THE AS SESSEE HAS INDULGED IN BOGUS PURCHASES AND SALES HAVE NOT BEEN DISPUTED BY THE REVENUE, IT IS ONLY 3 ITA NO.1000/MUM/2019(A.Y.2010-11) PROFIT ELEMENT EMBEDDED IN THE BOGUS PURCHASES TH AT SHOULD BE BROUGHT TO TAX. THE ASSESSING OFFICER ESTIMATED GP @12.5% ON THE ALLEGED BOGUS PURCHASES. THE SAME HAS BEEN CONFIRMED BY THE CIT( A). TAKING INTO CONSIDERATION THE NATURE OF ASSESSEES BUSINESS A ND SURROUNDING CIRCUMSTANCES, WE ARE OF CONSIDERED VIEW THAT END S OF JUSTICE WOULD BE SERVED IF GP ON BOGUS PURCHASES IS RESTRICTED TO 8% OVER AND ABOVE GP DECLARED BY THE ASSESSEE. THUS, THE APPEAL OF AS SESSEE IS PARTLY ALLOWED IN THE TERMS AFORESAID. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER THE HEARI NG ON MONDAY , THE 10 TH DAY OF FEBRUARY, 2020. SD/- SD/- (R.C.SHARMA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 10/02/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI