ITO 29(3)(5), Mumbai V. M/S VIHAR ENGINEERING , Mumbai

ITA 2333/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8431 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Bogus purchase
• Section: 69C; 143(3); 133(6); 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2333 / / 2019 (%. .2010-11 ) ITA NO. 2333/MUM/2019 (A.Y.2010-11) ITO-29(3)(5), ROOM NO.211, C-10, 2 ND FLOOR, B.K.C, BANDRA (E), MUMBAI 400 051 / VS. : / APPELLANT M/S. VIHAR ENGINEERING, B-13, VARDHAMAN ESTATE, LBS MARG, VIKHROLI (W) MUMBAI 400 083 PAN:AAAFV5112G : / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI AJAY PRATAP SINGH / DATE OF HEARING : 13/10/2020 / DATE OF PRONOUNCEMENT : 08 /01/2021 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-40, MUMBAI ( IN SHORT THE CIT (A)) DATED 31/01/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF PROCESSORS, OLD MACHINERY AND SPARES. ON THE BASIS OF INFORMATION RECEIVED BY THE DGIT(INV.), MU MBAI FROM SALES TAX DEPARTMENT 2 ITA NO. 2333/MUM/2019 (A.Y.2010-11) GOVERNMENT OF MAHARASHTRA, THE ASSESSMENT IN THE CA SE OF ASSESSEE FOR ASSESSMENT YEAR 2010-11 WAS REOPENED. AS PER INFORMATION RECE IVED, THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.6,56,370/- FRO M M/S. MANGLIK METAL (INDIA) DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR U NDER APPEAL. THE ASSESSING OFFICER AFTER EXAMINING THE DOCUMENTS FURNISHED BY THE ASSESSEE TO SUBSTANTIATE GENUINENESS OF THE PURCHASES, MADE ADDITION OF RS.8 2,046/- BY ESTIMATING GP @12.5% ON BOGUS PURCHASE. APART FROM ABOVE, THE AS SESSING OFFICER MADE ADDITION OF RS.3,00,000/- UNDER SECTION 69C OF THE INCOME TA X ACT, 1961 ( IN SHORT THE ACT) ON ACCOUNT OF SUNDRY CREDITORS, DISALLOWANCE OF UNE XPLAINED EXPENDITURE RS.50,000/- AND DISALLOWANCE OF DEDUCTION UNDER SECTION 80G RS.5,000/-. AGGRIEVED BY THE ASSESSMENT ORDER DATED 21/03/2016 PASSED UNDER SECT ION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) CH ALLENGING ADDITIONS/DISALLOWANCES MADE BY ASSESSING OFFICER. THE CIT(A) WHILE ADJUDI CATING THE ISSUE OF BOGUS PURCHASES REDUCED THE DISALLOWANCE BY ESTIMATING GP @6% TOTAL BOGUS PURCHASES. THE REVENUE IN APPEAL HAS ASSAILED THE FINDINGS OF CIT(A) IN RESTRICTING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO 6%. 3. SHRI AJAY PRATAP SINGH, REPRESENTING THE DEPARTM ENT VEHEMENTLY DEFENDED THE ADDITION @12.5% ON BOGUS PURCHASES AND PRAYED F OR REVERSING THE FINDINGS OF CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT THE ASSESSING OFFICER WAS QUITE REASONABLE AND JUSTIFIED IN ESTIMATING GP @12.5% ON BOGUS PURCHASES. 4. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAS ALLEG EDLY OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.6,56,370/- FROM M/S. MANGLIK METAL (INDIA) DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL. THE AS SESSEE HAS FAILED TO PROVE GENUINENESS OF THE PURCHASES BEFORE THE ASSESSING O FFICER. THE ASSESSEE COULD NEITHER FURNISH TRAIL OF GOODS NOR THE ASSESSEE COU LD PRODUCE THE SUPPLIERS OF GOODS. EVEN THE NOTICES ISSUED BY ASSESSING OFFICER UNDER SECTION 133(6) OF THE ACT TO THE 3 ITA NO. 2333/MUM/2019 (A.Y.2010-11) SUPPLIERS WAS RECEIVED BACK UNSERVED WITH POSTAL RE MARKS NOT KNOWN. HENCE, THE PURCHASE BILLS PRODUCED BY THE ASSESSEE ISSUED BY M /S. MANGLIK METAL(INDIA) REMAIN UNVERIFIED. THE ASSESSING OFFICER ESTIMATED THE PR OFIT EMBEDDED IN THE SAID HAWALA PURCHASES AT 12.5% OF SUCH PURCHASES. THE CIT(A) R EDUCED THE ADDITION TO 6%. THE CIT(A) WHILE REDUCING THE ADDITION TO 6% HAS PLACED RELIANCE ON THE DECISION OF TRIBUNAL IN THE CASE OF MADHUKANT B. GANDHI IN ITA NO.1950/MUM/2009 DECIDED ON 23/02/2010 AND VARIOUS OTHER DECISIONS OF THE TRIBU NAL. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, I AM OF THE CONSIDERED VIEW THAT ESTIMATION OF GP AT 12.5% BY THE ASSESSING OFFICER IS ON THE HIGHER SIDE. I CONCUR WITH THE FINDINGS OF CIT(A) AND UPHOLD THE ADDITION @6% ON THE BOGUS PURCHASES. 5. NO APPEAL/CROSS OBJECTIONS FILED BY THE ASSESSEE AG AINST THE ORDER OF CIT(A) HAS BEEN BROUGHT TO THE NOTICE OF BENCH. IN CASE ANY APPEAL/CROSS OBJECTIONS BY THE ASSESSEE AGAINST IMPUGNED ORDER OF CIT(A) IS NO TICED,, THEN THIS ORDER MAY BE RECALLED AND THE CROSS APPEALS MAY BE LISTED TOGETH ER FOR DISPOSAL BY A COMMON ORDER . 6. IN THE RESULT, THE IMPUGNED ORDER IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, T HE 8 TH DAY OF JANUARY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 08/01/2021 VM , SR. PS(O/S) 4 ITA NO. 2333/MUM/2019 (A.Y.2010-11) COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *+ / THE RESPONDENT. 3. ,+ ( )/ THE CIT(A)- 4. ,+ CIT 5. -.*+% , . . . , / DR, ITAT, MUMBAI 6. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI