SHRI. ROHIT MEHTA, MUMBAI V. ITO 17(3)(2), MUMBAI

ITA 173/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0515 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 14-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase; Accommodation entries; Set aside
• Section: 148

Judgement Text

1 ITA NO.173/MUM/2019 SHRI ROHIT MEHTA IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI VIKAS AWASTHY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 173/MUM/2019 ASSESSMENT YEAR: 2008-09 ROHIT D MEHTA 501, ASHIRWAD BUILDING AHMEDABAD STREET MUMBAI-400 009 VS. ITO-17(3)(2) AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN NO. AAAPM9103C APPELLANT RESPONDENT REVENUE BY : SHRI SANJAY J. SETHI , DR ASSESSEE BY : NONE DATE OF HEARING : 10/03/2021 DATE OF PRONOUNCEMENT : 12/03/2021 ORDER PER N.K. PRADHAN, A.M. THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS DIREC TED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-28, MUM BAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143( 3) R.W.S. 147 OF THE INCOME TAX ACT 1961, (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON 15.01.2020 , 03.07.2020, 14.01.2021 & 10.03.2021, NEITHER THE ASSESSEE NOR H IS AUTHORIZED REPRESENTATIVE (AR) APPEARED BEFORE THE TRIBUNAL ON ABOVE DATES. AS THERE IS 2 ITA NO.173/MUM/2019 SHRI ROHIT MEHTA NON-COMPLIANCE BY THE ASSESSEE, WE ARE PROCEEDING TO DISPOSE-OFF THIS APPEAL AFTER EXAMINING THE MATERIALS AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE (DR). 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2008- 09 ON 30.09.2008 DECLARING TOTAL INCOME OF RS.8,77,296/-. THE ASSESS EE IS A BROKER IN IRON & STEEL. ON RECEIPT OF INFORMATION FROM THE DIRECTOR GENERA L OF INCOME TAX (INV.) THAT THE ASSESSEE HAD OBTAINED ACCOMMODATION ENTRIES FRO M TRISHUL TRADERS AMOUNTING TO RS.98,60,943/-, THE ASSESSING OFFICER (AO) ISSUED NOTICE U/S 148 FOR REOPENING THE ASSESSMENT. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE PURCH ASE MADE FROM THE ABOVE PARTY IS GENUINE. IN THIS REGARD, HE FILED LEDGER C OPIES OF THE PURCHASES MADE AND STATED THAT THE PAYMENTS HAVE BEEN MADE THROUGH CHEQUES ONLY. HOWEVER, THE AO WAS NOT CONVINCED WITH THE ABOVE SUBMISSIONS OF THE ASSESSEE, ON THE GROUND THAT EXCEPT CHEQUE PAYMENTS, NO OTHER DOCUME NTS SUCH AS DELIVERY CHALLANS, LORRY RECEIPTS, TRANSPORTATION DETAILS ET C., WERE PRODUCED. CONSIDERING THE FACTS THAT SINCE THE ASSESSEE HAS PROVIDED BANK STATEMENT SHOWING CHEQUE PAYMENTS TO THE SAID PARTY, THE AO CAME TO THE FIN DING THAT THE ASSESSEE MUST HAVE MADE THE PURCHASES FROM OPEN MARKET FROM SOME PARTIES BEST KNOWN TO HIM. FOLLWING THE DECISION OF THE HONBLE GUJARAT H IGH COURT IN CIT VS. SIMIT P.SHETH 355 ITR 290, THE LD.CIT(A) ESTIMATED THE PROFIT @12 .5% ON THE ALLEGED BOGUS PURCHASES OF RS. 98,60,943/-, WHICH COMES TO RS.12,32,618/-. 3. IN APPEAL, THE LD.CIT(A), VIDE ORDER DATED 02.11.2018 CONFIRMED THE ABOVE ESTIMATION MADE BY THE AO. 3 ITA NO.173/MUM/2019 SHRI ROHIT MEHTA 4. BEFORE US, THE LD. DR SUBMITS THAT THE ORDER OF THE LD.CIT(A), WHICH IS REASONABLE MAY BE AFFIRMED. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE, THE ASSES SEE IS A BROKER IN IRON & STEEL. AS MENTIONED EARLIER, THE AO HAS RECORDED IN HIS A SSESSMENT ORDER DETAILED DATED 10.02.2016 THAT THE ASSESSEE HAS PROVIDED THE BANK STATEMENT SHOWING CHEQUE PAYMENTS TO THE SAID PARTY. HOWEVER, THE ASS ESSEE FAILED TO FILE BEFORE THE AO DOCUMENTS SUCH AS DELIVERY CHALLANS, LORRY R ECEIPTS, TRANSPORTATION DETAILS. CONSIDERING THE NATURE OF THE BUSINESS OF THE ASSE SSEE AND FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDER O F THE LD.CIT(A) AND DIRECT THE AO TO RESTRICT THE DISALLOWANCES BY ESTIMATING PROFIT @5% OF THE DISPUTED PURCHASES OF RS.98,60,943/-. 5. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/03/2021 SD/- SD/- (VIKAS AWASTHY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 12/03/2021 THIRUMALESH SR. P.S. COPY OF THE ORDER FORWARDED TO : 4 ITA NO.173/MUM/2019 SHRI ROHIT MEHTA 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT, MUMBAI