ITO, 29(3)(4), MUMBAI V. SASHIKANT B GUPTA, MUMBAI

ITA 1129/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4553 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Keywords: Bogus purchase
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1129/M/2019 ASSESSMENT YEAR: 2010-11 ITO 29(3)(4), ROOM NO.308, C-10, PRTYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400050 VS. SHRI SASHIKANT B. GUPTA, 102, AVIOR, NIRMAL GALAXY, LBS ROAD, MULUND (W), MUMBAI 400 080 PAN: AADPG4713D (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI R. BHOOPATI, SR. D.R. DATE OF HEARING : 11.02.2020 DATE OF PRONOUNCEMENT : 18.02.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 04.12.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. DURING THE COURSE OF HEARING, NEITHER ASSESSEE N OR HIS AUTHORIZED REPRESENTATIVE APPEARED TO ATTEND THE HE ARING NOR ANY APPLICATION SEEKING ADJOURNMENT WAS FILED. THER EFORE , WE ARE DISPOSING OFF THE APPEAL AFTER HEARING THE LD. D.R. AND GOING THROUGH THE FACTS OF THE CASE. 3. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) RESTRICTING THE ADDITION TO RS.74,806/- BEING 6% OF ITA NO.1129/M/2019 SHRI SASHIKANT B. GUPTA 2 BOGUS PURCHASES AS AGAINST THE ADDITION OF RS.1,55, 850/- BEING 12.5% OF BOGUS PURCHASES. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED R ETURN OF INCOME ON 15.09.2010 DECLARING AN INCOME OF RS.8,57 ,300/-. THE ASSESSMENT WAS FRAMED IN THIS CASE UNDER SECTIO N1 43(3) OF THE ACT VIDE ORDER DATED 28.03.2013 ACCEPTING THE R ETURNED INCOME. THEREAFTER THE CASE OF THE ASSESSEE WAS RE OPENED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECT ION 148 DATED 03.09.2013 AFTER AO RECEIVED INFORMATION FROM DGIT (INVESTIGATION), MUMBAI AND SALES TAX DEPARTMENT, G OVERNMENT OF MAHARASHTRA THAT ASSESSEE IS BENEFICIARY OF HAWA LA TRADE PURCHASES TO THE TUNE OF RS.12,46,768/-. ACCORDIN GLY, THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THE SAID PURCHASES. THE ASSESSEE FILED COPIES OF PURCHASE B ILLS, VOUCHERS, LEDGER ACCOUNTS, BANK STATEMENT EVIDENCIN G PAYMENTS ETC. HOWEVER, AO WAS NOT SATISFIED WITH THE GENUIN ENESS OF THE PURCHASES AND BROUGHT TO TAX THE SAID PURCHASES @ 12.5% OF THE TOTAL BOGUS PURCHASES THEREBY MAKING AN ADDITIO N OF RS.1,55,850/- TO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 O F THE ACT DATED 29.01.2015 BY FOLLOWING THE DECISION OF HONB LE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BHOLANATH POLY FA B PVT. LTD. ITA NO.63 OF 2012 DATED 23.10.2012 AND CIT VS. SIMI T P. SHETH 356 ITR 451 (GUJARAT HC). 5. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE L D. CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY RE STRICTING THE ADDITION TO 6% INSTEAD OF 12.5% OF THE BOGUS PURCHA SES BY HOLDING THAT ASSESSEE IS TRADING IN IRON AND STEEL AND IT IS ITA NO.1129/M/2019 SHRI SASHIKANT B. GUPTA 3 REASONABLE TO APPLY A RATE OF 6% TO TAX THE PROFIT ELEMENT IN THE BOGUS PURCHASES. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE NOTE THAT IN THIS CASE THE ASSESSEE IS A TRADER IN IRON AND STEEL ON WHICH THE PROFIT RATE IS THERE FROM 2% TO 4%. UNDISPUTEDLY, THE ASSESSEE IS A BENEFICIARY OF HAWA LA PURCHASE ENTRIES TO THE TUNE OF RS.12,46,768/- FROM THREE PA RTIES WHO WERE DECLARED AS HAWALA DEALERS BY THE SALES TAX DE PARTMENT, GOVERNMENT OF MAHARASHTRA. IN THE INSTANT CASE, WE OBSERVE THAT LD. CIT(A) HAS PASSED A VERY REASONED AND SPEA KING ORDER BY DIRECTING THE AO TO APPLY 6% WHICH IS VERY REAS ONABLE KEEPING IN VIEW THE NATURE OF TRADE OF THE ASSESSEE AND THEREFORE WE ARE INCLINED TO UPHOLD THE SAME BY DIS MISSING THE APPEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.02.2020. SD/- SD/- (C.N. PRASAD) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18 .02.2020. * 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 ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.