OMPRAKASH HUKMARAM VISHNOI, MUMBAI V. ITO, 19(2)(4), MUMBAI

ITA 1135/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4416 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 28-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Assessee Lawyers: OMPRAKASH H VISHNOI OWNER
• Keywords: Bogus purchase; Rejection of books of accounts
• Section: 143(1); 145(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.1135/M/2019 ASSESSMENT YEAR: 2011-12 SHRI OMPRAKASH HUKMARAM VISHNOI, R.NO.29, 4 TH FLOOR, 47/51, KIKA STREET, GULALWADI, MUMBAI 400 004 PAN: AEFPV5930D VS. ITO 19(2)(4), MAATRU MANDIR, TARDEO, MUMBAI - 400007 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI OMPRAKASH H. VISHNOI, OWNER REVENUE BY : SHRI R. BHOOPATI, SR. D.R. DATE OF HEARING : 10.02.2020 DATE OF PRONOUNCEMENT : 18.02.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 02.07.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. THE ISSUE RAISED IN GROUND NO.1 IS AGAINST THE CONFIRMATION OF ADDITION BY LD. CIT(A) OF RS.3,94,387/- BEING 12 .5% OF ALLEGED BOGUS PURCHASES. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED R ETURN OF INCOME ON 29.09.2011 DECLARING AN INCOME OF RS.4,51 ,928/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THEREAFTER THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ITA NO.1135/M/2019 SHRI OMPRAKASH HUKMARAM VISHNOI 2 ACT BY ISSUING NOTICE UNDER SECTION 148 DATED 22.03 .2016 AFTER AO RECEIVED INFORMATION FROM DGIT (INVESTIGATION) W ING, MUMBAI THAT ASSESSEE IS BENEFICIARY OF HAWALA PURCH ASES ENTRIES TO THE TUNE OF RS.31,55,095/- FROM KANAK STEEL IND USTRIES. PERTINENT TO NOTE THAT ASSESSEE IS A DEALER IN FERR OUS AND NON FERROUS METAL ITEMS. ACCORDINGLY, THE AO DIRECTED THE ASSESSEE TO PROVE THE GENUINENESS OF THE SAID PURCHASES. TH E ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, FILED COPIES OF BILLS, VOUCHERS, LEDGER ACCOUNTS, BANK STATEMENT EV IDENCING PAYMENTS THROUGH BANKING CHANNELS AND TALLY OF SALE AND PURCHASE MADE DURING THE YEAR. THE AO, HOWEVER, WA S NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND REJECTED THE BOOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE ACT A ND APPLIED A GP OF 12.5% ON THE SAID BOGUS PURCHASES BY FOLLOWIN G THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH 356 ITR 451 (GUJARAT HC). 4. IN THE APPELLATE PROCEEDINGS, LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING THE AO TO APPLY A RATE WHICH IS CALCULATED BY REDUCING THE GP DECLARED BY THE AS SESSEE DURING THE YEAR FROM 12.5% APPLIED BY THE AO. 5. IN THIS CASE, SINCE THE ASSESSEE IS A PETTY TRAD ER DEALING IN FERROUS AND NON FERROUS METAL ITEMS, THE RATE APPLI ED BY THE LD. CIT(A) IS EXCESSIVE AND UNREASONABLE AND IF SUSTAIN ED WOULD LEAD TO HYPOTHETICAL RESULT. SINCE THE GP IN THE FERROUS AND NON FERROUS IS VERY LOW AND KEEPING IN VIEW OF THE COND ITION OF ASSESSEE BEING A PETTY SCRAP DEALER THE ORDER OF LD . CIT(A) IS REVERSED AND AO IS DIRECTED TO APPLY GP OF 2%. ITA NO.1135/M/2019 SHRI OMPRAKASH HUKMARAM VISHNOI 3 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 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.