ACIT-26(2), Mumbai V. PUKHRAJ T PUROHIT, Mumbai

ITA 147/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4441 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER ITA NO.147/MUM/2019(A.Y.2010-11) ITA NO.148/MUM/2019(A.Y.2011-12) ACIT -26(2) ROOM NO.510, 5 TH FLOOR, C-11, PRATYAKSHYA KAR BHAVAN, BKC, BANDRA (E) MUMBAI 400 051 ...... APPELLANT VS. PUKHRAJ T. PUROHIT, 4, NATALINE INDUSTRIAL ESTATE, KURLA ANDHERI ROAD, SAKINAKA, MUMBAI 400 072. PAN: AAFPP 3330H ..... R ESPONDENT APPELLANT BY : SHRI R. BHOOPATI RESPONDENT BY : MS. KINJAL BHUTA DATE OF HEARING : 21/01/2020 DATE OF PRONOUNCEMENT : 20/02/2020 ORDER PER VIKAS AWASTHY, JM: THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-38, MUMBAI ( I N SHORT THE CIT(A) ) FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12, RESPECTIV ELY. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 27/07/2018. SINCE, TH E FACTS AND THE GROUND RAISED 2 ITA NO.147/MUM/2019(A.Y.2010-11) ITA NO.148/MUM/2019(A.Y.2011-12) IN BOTH THESE APPEALS ARE SIMILAR, THESE APPEALS A RE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OF BY THIS COMMON ORD ER. ITA NO.147/MUM/2019 (A.Y.2010-11): 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM T HE RECORDS ARE: THE ASSESSEE IS A TRADER IN IRON AND STEEL ITEMS. ON T HE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THE ASSESSING OFFICER REOPENED THE ASSESSMENT FOR THE R EASONS THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.52, 43,128/- FROM VARIOUS HAWALA DEALERS. THE ASSESSING OFFICER HELD THAT SI NCE THE ASSESSEE HAD FAILED TO PRODUCE THE PARTIES FROM WHOM THE ALLEGED GOODS WERE PURCHASED AND HAS ALSO FAILED TO SHOW TRAIL OF GOODS THE ASSESSEE HA S INDULGED IN OBTAINING BOGUS PURCHASE BILLS. THE ASSESSING OFFICER ESTIMATED GP ON ALLEGED BOGUS PURCHASES @ 25%. THUS, THE ASSESSING OFFICER MADE ADDITION OF RS.13,10,782/- ON ACCOUNT OF NON-GENUINE PURCHASES. AGGRIEVED AGA INST THE ASSESSMENT ORDER DATED 25/02/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A), AFTER EXAMINING THE FACTS OF THE CASE RESTR ICTED THE GP ON ALLEGED BOGUS PURCHASES TO 12.5% OF SUCH BOGUS PURCHASES. THE R EVENUE IS IN APPEAL ASSAILING THE FINDINGS OF CIT(A) IN REDUCING THE G. P RATE ON BOGUS PURCHASES. 3. SHRI R. BHOOPATHI, REPRESENTING THE DEPARTMENT, VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSE E HAS FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE PURCHASES. THE ASSESSING OFFICER IN A FAIR AND REASONABLE MANNER HAS ESTIMATED GP ON BOGU S PURCHASES TO 25%. THE CIT(A) HAS ERRED IN FURTHER REDUCING IT TO 12.5%. THE LD. DEPARTMENTAL 3 ITA NO.147/MUM/2019(A.Y.2010-11) ITA NO.148/MUM/2019(A.Y.2011-12) REPRESENTATIVE PRAYED FOR REVERSING THE FINDINGS OF CIT(A) AND UPHOLDING THE ADDITION AS MADE IN ASSESSMENT ORDER. 4. ON THE OTHER HAND, MS. KINJAL BHUTA, APPEARING O N BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF CIT(A). 5. BOTH SIDES HEARD. ORDERS OF AUTHORITIES BELOW E XAMINED. THE ASSESSEE HAS ALLEGEDLY OBTAINED BOGUS PURCHASE BILLS AGGREGA TING TO RS.52,43,128/- FROM DECLARED HAWALA DEALERS. THE ASSESSING OFFICER EST IMATED GP @ 25% ON THE ALLEGED BOGUS PURCHASES AND THUS, MADE ADDITION OF RS.13,10,782/-. THE CIT(A) AFTER PLACING RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SAMIT P. SHETH, 356 ITR 451(GUJ) ES TIMATED GP @ 12.5% ON BOGUS PURCHASES. WE ARE OF THE CONSIDERED VIEW THA T THE ORDER OF CIT(A) IS REASONABLE AND JUSTIFIED, AND HENCE, WARRANTS NO INTERFERENCE. THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. ITA NO.148/MUM/2019 (A.Y.2011-12): 6. THE FACTS IN THE ASSESSMENT YEAR 2011-12 ARE ID ENTICAL TO THE FACTS IN THE APPEAL BY REVENUE IN ASSESSMENT YEAR 2010-11 EXC EPT FOR THE AMOUNT OF ALLEGED BOGUS PURCHASES. IN THIS ASSESSMENT YEAR, THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.22,58,688/-. THE ASSESSING OFFICER ESTIMATED GP @ 25% AND MADE ADDITION OF RS.5,64,672 /-. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE GP TO 12.5% AND CONFIRMED THE ADDITION OF RS.2,82,336/-. 4 ITA NO.147/MUM/2019(A.Y.2010-11) ITA NO.148/MUM/2019(A.Y.2011-12) 7. THE FINDINGS GIVEN BY US WHILE DECIDING THE APPE AL OF REVENUE IN ASSESSMENT YEAR 2010-11 WOULD MUTATIS MUTANDIS APPLY TO THE PRESENT APPEAL. THE APPEAL OF THE REVENUE IS DISMISSED BEI NG DEVOID OF ANY MERIT. 8. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 20 TH DAY OF FEBRUARY, 2020. SD/- SD/- (N.K.PRADHAN) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 20/02/2020 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