RAJASTHAN METAL SYNDICATE, MUMBAI V. INCOME TAX OFFICER 30(3)(1), MUMBAI

ITA 1042/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5349 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Assessee Lawyers: N K BHUTA
• Keywords: Bogus purchase
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HON'BLE ACCOUNTANT MEMBER ITA NO. 1042 /MUM/201 9 (A.Y: 201 0 - 11) M/S. RAJASTHAN METAL SYNDICATE SHOP NO . 12, GOVIND BHAVAN S.V . ROAD, OPP. CHJINCHOLI MALAD(W), MUMBAI PAN: AAAFR1088F V. INCOME TAX OFFICER 30(3) (1) PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI - 400 051 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N.K. BHUTA DEPARTMENT BY : SHRI R. BHOOPATHI DATE OF HEARING : 10 .02.2020 DATE OF PRONOUNCEMENT : 29 .09.2020 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 41, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 31.12.2018 FOR THE ASSESSMENT YEAR 2010 - 11. 2 ITA NO. 1042/MUM/2019 (A.Y: 2010 - 11) M/S. RAJASTHAN METAL SYNDICATE 2. THE ONLY ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT THE LD.CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPECT OF BOGUS PURCHASES TO THE EXTENT OF 12 .5%. 3. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TRIBUNAL IN ITA.NO. 2004/MUM/2018 DATED 15.11.2018 FOR THE A.Y. 2011 - 12 ESTIMATED THE PROFIT ELEMENT FROM ALLEGED PURCHASES AT 8% . LD. COUNSEL FOR THE ASSESSEE REQUESTED THAT SAME PERCENTAGE MAY BE APPLIED FOR THIS YEAR ALSO. 4. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE TRIBUNAL FOR THE IMMEDIATELY SUCCEEDING ASSESSMENT YEAR I.E. A.Y. 2011 - 12 , ESTIMATED THE PROFIT ELEMENT ON BOGUS PURCHASES AT 8% OBSERVING AS UNDER: - 5. I HAVE CONSIDERED THE ISSUE AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. I FIND FROM THE FACTS OF THE CASE AND ARGUMENT OF BOTH THE SIDES T HAT THE CIT(A) HAS CONFIRMED THE PROFIT RATE AT THE RATE OF 12.5%, WHICH ACCORDING TO ME IS ON HIGHER SIDE GOING BY THE NATURE OF BUSINESS OF THE ASSESSEE I.E. FERROUS AND NON - FERROUS METAL. I AM IN FULL AGREEMENT WITH THE CONTENTIONS RAISED BY THE ASSESSE E BEFORE CIT(A) AND ACCORDING TO ME A PROFIT RATE OF 12.5% IS ON HIGHER SIDE AS ASSESSEE HAS ALSO PAID THE VAT ELEMENT ON THESE BOGUS PURCHASES, A FURTHER DEDUCTION IN ESTIMATION OF PROFIT TO THE EXTENT OF 4.5% CAN BE ALLOWED. HENCE, I DIRECT THE AO TO REC OMPUTE THE INCOME AFTER APPLYING PROFIT RATE AT THE RATE OF 8% AND COMPUTE THE INCOME ACCORDINGLY. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 3 ITA NO. 1042/MUM/2019 (A.Y: 2010 - 11) M/S. RAJASTHAN METAL SYNDICATE 6. FOLLOWING THE SAID ORDER, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISAL LOWANCE TO 8% OF THE PURCHASES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. BEFORE PARTING, WE NOTICED THAT THIS APPEAL WAS HEARD ON 10 .02.2020 AND THE PRONOUNCEMENT IS DELAYED DUE TO LOCKDOWN IN VIEW OF COVID - 19 PANDEMIC. THE PRONOUNCEMENT IS AS PER RULE 34(5) OF INCOME T AX APPELLATE TRIBUNAL RULES, 1963 AND HON'BLE BOMBAY HIGH COURT DECISION VIDE ORDERS DATED 15.04.2020 AND 15.06.2020 EXTENDING THE TIME BOUND PERIODS SPECIFIED BY HON'BLE HIGH COURT BY REMOVING THE PERIOD UNDER LOCKDOWN. THIS ASPECT WAS ALSO DEALT WITH IN DETAIL BY THE MUMBAI BENCH OF THE TRIBUNAL IN CASE OF DCIT V. JSW STEEL VIDE ORDER DATED 14.05.2020 IN ITA.NO. 6264/MUM/2018. ORDER PRONOUNCED ON 29 . 2020 AS PER RULE 34(4) OF ITAT RULES BY PLACING THE PRONOUNCEMENT LIST IN THE NOTICE BOARD. SD/ - SD/ - ( RAJESH KUMAR ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 29 / 0 9 / 2020 GIRIDHAR , S R. PS 4 ITA NO. 1042/MUM/2019 (A.Y: 2010 - 11) M/S. RAJASTHAN METAL SYNDICATE COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM