SHRI. SURESH KUMAR H BHANSALI, Mumbai V. ITO 19(3)(4), Mumbai

ITA 257/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6908 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 18-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHI
• Keywords: Bogus purchase; Accommodation entries
• Section: 234B; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI , BEFORE VIKAS AWASTHY, JUDICIAL MEMBER . 257 / / 20 19 ( . . 2009 - 10 ) ITA NO. 257 /MUM/20 19 (A.Y. 2009 - 10 ) SURESH KUMAR H. BHANSALI 62/64, 2 ND KUMBHARWADA, SANT SENA MAHARAJ, MUMBAI 400 004. PAN : AAGPB8743H ...... / APPELLANT VS. INCOME TAX OFFICER, WARD 19(3)(4), MATRU MANDI R, TARDEO, MUMBAI 400 007. ..... / RESPONDENT A SSESSEE BY : SHRI S.L. JAIN REVENUE BY : SHRI SANJAY SETHI / DATE OF HEARING : 30/12/2020 / DATE OF PRONOUNCEMENT : 25 /03/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS) - 30, MUMBAI *IN SHORT THE CIT(A)+ DATED 30/11/2018 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. SHRI S.L. JAIN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NO - FERROUS METALS. THE ASSESSMENT IN THE CASE OF 2 ITA NO. 257/MUM/2019 (A.Y. 2009 - 10) ASSESSEE FOR ASSESSMENT YEAR 2009 - 10 WAS REOPENED ON THE BASIS OF INFORMATION RECEIV ED BY THE DGIT INV. MUMBAI FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. AS PER THE INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED ACCOMMODATION ENTRIES TO THE TUNE OF RS.47,83,212/ - FROM VARIOUS HAWALA OPERATORS. THE ASSESSING OFFICER MADE AD DITION OF THE ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 05/03/2015 PASSED UNDER SECTION 144 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) IN EX - PARTE P ROCEEDING CONFIRMED THE ADDITION IN TOTO. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PLACED RELIANCE ON VARIOUS DECISIONS OF THE TRIBUNAL TO CONTEND THAT ADDITION TO THE EXTENT OF 2% ON BOGUS PURCHASES BE SUSTAINED. 3. PER CONTRA, SHRI SANJAY SETHI , REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL BY THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS BEEN NON - COOPERATIVE DURING ASSESSMENT PROCEEDINGS AND EVEN IN T HE PROCEEDINGS BEFORE CIT(A). REPEATED NOTICES WERE SERVED ON THE ASSESSEE BUT THE ASSESSEE DELIBERATELY FAILED TO APPEAR. THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITY TO SUBSTANTIATE GENUINENESS OF PURCHASES AND THE SUPPLIER, BUT, THE ASSESSEE CHOOSE NOT TO APPEAR BEFORE THE ASSESSING OFFICER AND THE CIT(A), HENCE, ENTIRE BOGUS PURCHASES WERE ADDED IN THE HANDS OF ASSESSEE. 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. ON MERITS OF THE ADDITION, I FIND THAT THE TURNOVER DECLARED BY THE ASSESSEE H AS BEEN ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSEE IS A TRADER IN FERROUS AND NON - FERROUS METALS. WITHOUT PURCHASES THERE CANNOT BE SALES. ONCE THE SALES HAVE BEEN ACCEPTED, ENTIRE PURCHASES CANNOT BE DISALLOWED. THE PROFIT ELEMENT EMBEDDED IN SUC H PURCHASES IS TO BE TAXED. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE MADE PURCHASES FROM GREY MARKET AND THEREAFTER, OBTAINED BOGUS PURCHASE BILLS FROM HAWALA OPERATORS. GENERALLY, THE GP IN TRADING OF FERROUS AND NON - FERROUS METALS RANGE BETWEEN 5% TO 3 ITA NO. 257/MUM/2019 (A.Y. 2009 - 10) 8%. TAKING INTO CONSIDERATION ENTIRE FACTS OF THE CASE, ADDITION IS RESTRICTED TO 8% OF BOGUS PURCHASE. THE GROUND NO.1 OF THE APPEAL IS PARTLY ALLOWED, ACCORDINGLY. 5. IT WOULD BE RELEVANT TO OBSERVE HERE, THAT THE ASSESSEE NEVER PARTICIPATED IN A SSESSMENT PROCEEDINGS, THEREFORE, THE ASSESSING OFFICER WAS CONSTRAINED TO PASS THE ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT. EVEN IN FIRST APPELLATE PROCEEDINGS, THE ASSESSEE FAILED TO APPEAR DESPITE REPEATED SERVICE OF NOTICES. NO WRITTEN SUBMISSIO NS WERE FILED BY THE ASSESSEE, EITHER. THE CONDUCT OF THE ASSESSEE REFLECTS THAT THE ASSESSEE IS A RECALCITRANT, AND HAS SCANTY RESPECT FOR THE LAW OF LAND. 6. IN GROUND NO.2 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED LEVY OF PENALTY UNDER SECTION 271(1) (C) OF THE ACT. THE CHALLENGE TO PENALTY PROCEEDINGS AT THIS STAGE IS PREMATURE, THE GROUND IS DISMISSED ACCORDINGLY. 7. IN GROUND NO.3 OF THE APPEAL, THE ASSESSEE HAS ASSAILED CHARGING OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT. THE CHARGI NG OF INTEREST UNDER AFORESAID SECTIONS IS MANDATORY AND CONSEQUENTIAL, THEREFORE, GROUND NO.3 OF THE APPEAL IS DISMISSED. 8. THE GROUND NO.4 OF APPEAL IS GENERAL, HENCE, REQUIRES NO ADJUDICATION. 9. IN THE RESULT, APPEAL BY THE ASSESSEE IS PARTLY ALLOWED IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 25 TH DAY OF MARCH , 2021. S D / - (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI , / DATED 25 /0 3 /2021 VM , SR. PS (O/S) 4 ITA NO. 257/MUM/2019 (A.Y. 2009 - 10) 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