RAMESHKUMAR TAGRAJJI JAIN, MUMBAI V. ITO, WARD - 19(3)(1), MUMBAI

ITA 2949/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4917 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 18 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: 07-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 195; 119

Judgement Text

1 , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE VIKAS AWASTHY, JUDICIAL MEMBER . 2949/ / 2019 (%. . 2009-10 ) ITA NO.2949/MUM/2019 (A.Y.2009-10) RAMESHKUMAR TAGRAJJI JAIN 96/100, MARUTI MANDIR MARG 5 TH KUMBHARWADA LANE MUMBAI 400 004 PAN: AAGPJ9261Q ...... '/ APPELLANT % VS. INCOME TAX OFFICER, WARD -19(3)(1), MUMBAI 400 020. ..... ()/ RESPONDENT ASSESSEE BY : SHRI PRAKASH SHAH REVENUE BY : SHRI SUSHIL KUMAR MISHRA %*) / 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)-7, MUMBAI [IN SHORT THE CIT(A)] DATED 2 7/09/2018 FOR THE ASSESSMENT YEAR 2009-10. 2. THIS APPEAL IS TIME BARRED BY 119 DAYS. THE ASSE SSEE HAS FILED AN AFFIDAVIT GIVING REASONS FOR DELAY IN FILING OF THE APPEAL. AFTER EX AMINING THE CONTENTS OF AFFIDAVIT, I AM ITA NO.2949/MUM/2019 (A.Y.2009-10) 2 SATISFIED THAT THE DELAY IN FILING OF APPEAL IS NOT WILFUL OR DELIBERATE, BUT HAS RESULTED FOR THE BONA FIDE REASONS CITED IN AFFIDAVIT. THE HONBLE SUPREME CO URT OF INDIA IN THE CASE OF RAM NATH SAHU ORS. VS. GOBERDHAN SAO & ORS. REPO RTED AS 2002(3) SCC 195 HAS HELD THAT ACCEPTANCE OF EXPLANATION FURNISHED SHOULD BE THE RULE AND REFUSAL AN EXCEPTION MORE SO WHEN NO NEGLIGENCE OR INACTION OR WANT OF B ONAFIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. THUS, IN THE LIGHT OF FACTS AND T HE LAW LAID DOWN BY HONBLE APEX COURT DELAY OF 119 DAYS IN FILING OF THE APPEAL IS CONDON ED AND THE APPEAL IS ADMITTED FOR DISPOSAL ON MERITS. 3. SHRI PRAKASH SHAH APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NO-FE RROUS METALS. THE ASSESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 WAS RE OPENED ON THE BASIS OF INFORMATION RECEIVED BY THE DGIT (INV.) MUMBAI FROM THE SALES T AX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. AS PER THE INFORMATION RECEIVED, THE A SSESSEE HAD OBTAINED BOGUS PURCHASE BILLS TO THE TUNE OF RS.84,23,315/- FROM V ARIOUS (SEVENTEEN) HAWALA DEALERS. IN ORDER TO PROVE GENUINENESS OF PURCHASES DURING ASSE SSMENT PROCEEDINGS, THE ASSESSEE FURNISHED COPIES OF BILLS, QUANTITATIVE DETAILS OF THE STOCK AND SALES, BANK STATEMENTS EVIDENCING PAYMENTS MADE TO THE DEALERS LEDGER OF A LLEGED HAWALA DEALERS, ETC. THE ASSESSING OFFICER AFTER EXAMINING EVIDENCES FURNISH ED BY THE ASSESSEE MADE ADDITION ON ACCOUNT OF BOGUS PURCHASES BY ESTIMATING GP AT 12.5 % OF THE ALLEGED HAWALA PURCHASES. AGGRIEVED BY SAID ADDITION, THE ASSESSEE FILED APPE AL BEFORE THE CIT(A) AGAINST THE ASSESSMENT ORDER DATED 18/3/2015 PASSED UNDER SECTI ON 143(3) R.W.S. 147 OF THE INCOME TAX ACT,1961 (IN SHORT THE ACT). THE CIT(A ) WITHOUT APPRECIATING FACTS OF THE CASE AND DOCUMENTS ON RECORD CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT TH E CIT(A) HAS FAILED TO CONSIDER GP OF 2.93% DECLARED BY THE ASSESSEE. ESTIMATION OF GP BY THE ASSESSING OFFICER AND THE CIT(A) IS VERY MUCH ON THE HIGHER SIDE. ITA NO.2949/MUM/2019 (A.Y.2009-10) 3 4. PER CONTRA, SHRI SUSHIL KUMAR MISHRA, REPRESENTI NG THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSI NG APPEAL BY THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEE FAILED TO DISCHARGE HIS OWNS IN PROVING GENUINENESS OF PURCHASES AND THE DEALERS . THE ASSESSING OFFICER AFTER CONSIDERING THE FACTS OF CASE AND THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P SHETH 356 ITR 451 RESTRICTE D THE ADDITION TO 12.5%. THE ESTIMATION OF GP BY THE ASSESSING OFFICER AND THE CIT(A) AT12. 5% IS FAIR AND REASONABLE. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSEE IS A TRADER IN FERROUS AND NON-FERROUS METALS. UNDISPUTEDLY, TH E ASSESSEE HAS FAILED TO SUBSTANTIATE GENUINENESS OF THE PURCHASES, AS WELL AS THE DEALER S. AT THE SAME TIME TURNOVER DECLARED BY ASSESSEE HAS BEEN ACCEPTED BY THE ASSES SING OFFICER. WHERE THE SALES HAVE BEEN ACCEPTED, IT IS THE PROFIT ELEMENT EMBEDDED IN BOGUS PURCHASES THAT HAS TO BE TAXED. I AM OF CONSIDERED VIEW, THAT ESTIMATION OF GP AT 12.5% BY THE ASSESSING OFFICER AND THE CIT(A) IS ON HIGHER SIDE. GENERALLY, THE GP IN TRADING OF FERROUS AND NON-FERROUS METALS RANGE BETWEEN 5% TO 8%. THE ASSESSEE HAS DEC LARED GP OF 2.93%. TAKING INTO CONSIDERATION ENTIRE FACTS OF THE CASE, ADDITION ON ACCOUNT OF BOGUS PURCHASES IS RESTRICTED TO 6.5% OF SUCH PURCHASE. THE IMPUGNED O RDER IS MODIFIED AND THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. 6. IN THE RESULT, APPEAL BY THE ASSESSEE IS PARTLY ALLOWED IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY TH E 25 TH DAY OF MARCH, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, /%/ DATED 25/03/2021 VM , SR. PS (O/S) ITA NO.2949/MUM/2019 (A.Y.2009-10) 4 ()01 -) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 2) ( )/ THE CIT(A)- 4. 2) CIT 5. 34()% , . . . , / DR, ITAT, MUMBAI 6. 45678 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT, MUMBAI