ITO-21(1)(5), Mumbai V. SHRI. JUZER KALIM FAIZY, Mumbai

ITA 2395/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7909 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CULLA WEST MUMBAI PANAABPFP
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2395 / / 2019 (%. .2009-10 ) ITA NO. 2395/MUM/2019 (A.Y.2009-10) INCOME TAX OFFICER 21(1)(5), ROOM NO.120, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. / VS. : / APPELLANT SHRI JUZER KALIM FAIZY, 2/14, GROUND FLOOR, ST. PAIS STREET, BYCULLA (WEST), MUMBAI 400 011. PAN:AABPF8374P : / 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)-48, MUMBAI ( IN SHORT THE CIT (A)) DATED 31/01/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM TH E RECORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF IRON & STEEL BARS AND IRON PI PES, ETC. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR O N 30/10/2009 DECLARING TOTAL INCOME OF RS.5,18,759/-. ON THE BASIS OF INFORMATI ON RECEIVED FROM DGIT(INV.), 2 ITA NO. 2395/MUM/2019 (A.Y.2009-10) MUMBAI THE ASSESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 WAS REOPENED. AS PER THE INFORMATION RECEIVED, THE ASS ESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.7,48,191/- DURING T HE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL FROM VARIOUS HAWALA DE ALERS. DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESS EE TO PROVE GENUINENESS OF THE PURCHASES. THE ASSESSEE FAILED TO PRODUCE DOCUME NTS LIKE OCTROI RECEIPTS, TRANSPORT RECEIPTS, STOCK REGISTER, ETC. TO PROVE TRAIL OF GO ODS PURCHASED THE ASSESSEE EVEN FAILED TO PRODUCE THE SUPPLIERS OF THE GOODS. EVEN THE NOTICE SENT BY THE ASSESSING OFFICER UNDER SECTION 133(6) OF THE INCOME TAX ACT , 1961 ( IN SHORT THE ACT), TO THE SUPPLIERS ON THE ADDRESS PROVIDED BY THE ASSESSEE R EMAIN UNRESPONDED. THUS, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE BOGU S PURCHASES. AGGRIEVED BY ASSESSMENT ORDER DATED 19/02/2015 PASSED UNDER SEC TION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE FACTS AND THE SUBMISSIONS OF THE ASSESSEE CONCLUDED THAT SINCE THE REVENUE HAS ACCEPTED THE SALES MADE BY THE ASSESSEE, THE ENTIRE BOGUS PU RCHASES CANNOT BE ADDED. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN THE PURCHASES F ROM THE GREY MARKET THAT HAS TO BE BROUGHT TO TAX. THE CIT(A) ESTIMATED GP @ 15% ON TOTAL BOGUS PURCHASES. AGAINST THE FINDING OF CIT(A) THE REVENUE IS IN APP EAL BEFORE THE TRIBUNAL. 3. SHRI AJAY PRATAP SINGH, REPRESENTING THE DEPARTM ENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE F INDING OF CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASS ESSEE HAS FAILED TO PROVE GENUINENESS OF THE PURCHASES AND THE SUPPLIERS. 4. THE SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESE NTATIVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAS INDULG ED IN OBTAINING BOGUS PURCHASE BILLS FROM THE DECLARED HAWALA DEALERS. SINCE, THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE PURCHASES, THE ASSESSING OFFI CER MADE ADDITION OF ENTIRE SUCH BOGUS PURCHASES. UNDISPUTEDLY, THE REVENUE HAS NOT QUESTIONED THE SALES DECLARED BY THE ASSESSEE. WITHOUT PURCHASES THERE CANNOT BE SALES. ONCE THE TOTAL TURNOVER 3 ITA NO. 2395/MUM/2019 (A.Y.2009-10) HAS BEEN ACCEPTED ADDITION OF ENTIRE PURCHASES CANN OT BE MADE. IT IS ONLY THE PROFIT EMBEDDED IN THE BOGUS PURCHASES THAT HAS TO BE BROU GHT TO TAX. (RE: PCIT VS. PARAMSHAKHTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPE AL NO.413 OF 2017 DECIDED ON 15/07/2019 BY HON'BLE BOMBAY HIGH COURT ) . THE CIT(A) HAS ESTIMATED GP @ 15% ON SUCH BOGUS PURCHASES. I CONCUR WITH THE FINDIN GS OF CIT(A) AND UPHOLD THE SAME. THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID O F MERIT. 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, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 8 TH DAY OF JANUARY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 08/01/2021 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. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI