RAVIKUMAR J SHAH, MUMBAI V. ITO 19(3)(1), MUMBAI

ITA 1043/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4523 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Set aside
• Section: 143(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1043/M/2020 ASSESSMENT YEAR: 2009-10 SHRI RAVIKUMAR J. SHAH, ROOM NO.30, 3 RD FLOOR, 78/80, GULAL WADI, KIKA STREET, CP TANK, MUMBAI-400 004 PAN: BCPPS5087K VS. ITO 19(3)(1), MATRU MANDIR, TARDEO ROAD, MUMBAI - 400007 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : MS. POOJA CHHAWACHHARIA, A.R. REVENUE BY : SHRI BHARAT ANDHALE, D.R. DATE OF HEARING : 08.09.2021 DATE OF PRONOUNCEMENT : 17.09.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 12.09.2019 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.94,04,277/ - AS MADE BY THE AO EQUAL TO 100% OF THE BOGUS PURCHASES. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED T HE RETURN OF INCOME ON 14.07.2009 DECLARING TOTAL INCOME OF RS.3 ,52,591/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THE CASE ITA NO.1043/M/2020 SHRI RAVIKUMAR J. SHAH 2 OF THE ASSESSEE WAS THEREAFTER REOPENED BY THE AO A FTER RECEIPT OF INFORMATION FROM DGIT (INV.), MUMBAI THAT ASSESS EE IS BENEFICIARY OF HAWALA PURCHASE ENTRIES TO THE EXTEN T OF RS.94,04,277/- AND ACCORDINGLY THE NOTICE UNDER SEC TION 148 OF THE ACT WAS ISSUED ON 28.02.2014. THE AO CALLED FO R VARIOUS DETAILS AND INFORMATION FROM THE ASSESSEE FROM TIME TO TIME DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH W ERE NOT RESPONDED BY THE ASSESSEE. FINALLY, THE AO FRAMED THE ASSESSMENT EX-PARTE BY TREATING THE PURCHASES AS NO N GENUINE THEREBY MAKING AN ADDITION OF RS.94,04,277/-, BEING 100% OF THE PURCHASES, TO THE INCOME OF THE ASSESSEE BY FRA MING ASSESSMENT UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT DATED 05.03.2015. IN THE APPELLATE PROCEEDINGS, TH E LD. CIT(A) CONFIRMED THE ORDER OF AO. 5. AFTER HEARING THE LD. D.R. AND COUNSEL OF THE AS SESSEE AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT LD . CIT(A) HAS CONFIRMED THE ORDER OF AO BY REJECTING THE EVIDENCE S FILED BY THE ASSESSEE IN THE FORM OF BILLS, VOUCHERS, BANK STATE MENTS, CORRESPONDING SALES AND STOCK REGISTER SHOWING THE MOVEMENT OF STOCK. THE LD. CIT(A) INSTEAD HARPED ON THE FINDIN G OF THE AO THAT ASSESSEE HAS NOT RESPONDED TO VARIOUS NOTICES ISSUED BY THE AO AND THUS DISMISSED THE APPEAL. THE LD AR ARGUED BEFORE US THAT THE ASSESSEE COULD NOT APPEAR BEFORE THE AO BE CAUSE THE NOTICES WERE NOT SERVED UPON THE ASSESSEE. WE FIND MERIT IN THE ARGUMENTS OF THE LD AR THAT IN VIEW OF THE NATURE O F TRADE OF TRADING IN FERROUS AND NON FERROUS METALS AND GP R ATE DURING THE YEAR OF 3.76%, A REASONABLE VIEW MAY BE TAKEN. HAVING CONSIDERED ALL THE FACTS AND ARGUMENTS OF BOTH THE PARTIES AND PRECEDENTS OF THE COORDINATE BENCHES IN THE SIMILAR CASES , WE ITA NO.1043/M/2020 SHRI RAVIKUMAR J. SHAH 3 ARE OF THE CONSIDERED VIEW THAT THE IT WOULD REASON ABLE IF A PROFIT RATE OF 4% IS APPLIED ON THE BOGUS PURCHASES. ACCOR DINGLY WE SET ASIDE THE ORDER OF LD CIT(A) AND DIRECT THE AO TO A PPLY A RATE OF 4%. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.09.2021. SD/- SD/- ( SAKTIJIT DEY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 27.09.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.