ITO 21(1)(2), Mumbai V. BABAJI D SHINGAN, Mumbai

ITA 2396/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8432 (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: AJAY PRATAP SINGH
• 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 . 2396 / / 2019 (%. .2009-10 ) ITA NO. 2396/MUM/2019 (A.Y.2009-10) INCOME TAX OFFICER 21(1)(2), 104, FIRST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. / VS. : / APPELLANT BABAJI D SHINGAN, 1 ST FLOOR, R-3, ADHAYARU INDUSTRIAL SUNMILL- COMPUND, LOWER PAREL, MUMBAI 400 013. PAN: AAYPS3767L : / 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 THE RECORDS ARE: THE ASSESSEE IS ENGAGED IN REPAIR AND MAINTENANCE OF ELECTRICAL PUM PS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 17/09 /2009 DECLARING TOTAL INCOME OF RS.12,92,814/-. ON THE BASIS OF INFORMATION REC EIVED FROM DGIT(INV.) THE ASSESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT Y EAR 2009-10 WAS REOPENED. AS 2 ITA NO. 2396/MUM/2019 (A.Y.2009-10) PER THE INFORMATION RECEIVED, THE ASSESSEE HAS OBTA INED BOGUS PURCHASE BILLS AMOUNTING TO RS.6,04,919/- DURING THE PERIOD RELEVA NT TO THE ASSESSMENT YEAR UNDER APPEAL FROM VARIOUS HAWALA DEALERS. DURING ASSESSM ENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE GENUINENESS OF THE PURCHASES. THE ASSESSEE FAILED TO PRODUCE DOCUMENTS LIKE OCTROI RECEIPTS, TRANSPORT RECEIPTS, STOCK REGISTER, ETC. TO SHOW TRAIL OF GOODS ALLEGEDLY PURCHASED FRO M HAWALA DEALERS. THE ASSESSEE EVEN FAILED TO PRODUCE THE SUPPLIER OF THE GOODS. 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 12/03/2015 PASSED UNDER SECT ION 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 TURNOVER OF THE ASSESSEE, THE ENTIRE BOGUS PUR CHASES CANNOT BE ADDED. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN THE PURCHASES FROM T HE GREY MARKET THAT HAS TO BE BROUGHT TO TAX. THE CIT(A) ESTIMATED GP @ 25% ON TOTAL BOGUS PURCHASES AND RESTRICTED THE ADDITION TO RS.1,51,230/-. AGAINST THE FINDING OF CIT(A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI AJAY PRATAP SINGH, REPRESENTING THE DEPAR TMENT 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 OFFIC ER MADE ADDITION OF ENTIRE SUCH BOGUS PURCHASES. UNDISPUTEDLY, THE REVENUE HAS NOT QUESTIONED THE WORK CARRIED OUT BY THE ASSESSEE AND TOTAL TURNOVER DECLARED. O NCE THE TOTAL TURNOVER HAS BEEN 3 ITA NO. 2396/MUM/2019 (A.Y.2009-10) ACCEPTED ADDITION OF ENTIRE PURCHASES CANNOT BE MAD E. 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 @ 25% ON SUCH BOGUS PURCHASES. I CONCUR WITH THE FINDING S OF CIT(A) AND UPHOLD THE SAME. THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF 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