ITO, - 28(1)(4), MUMBAI V. JIGAR JASVANTRAI SHAH, MUMBAI

ITA 2985/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1942 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Assessee Lawyers: L L TOLANI
• Keywords: Bogus purchase; Tax effect; Reassessment proceedings
• Section: 133(6); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2985 / /201 9 ((. .2010-11 ) ITA NO. 2985/MUM/2019 (A.Y.2010-11) ITO-28(1)(4), ROOM NO.330, 3 RD FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 / VS. : / APPELLANT JIGAR JASVANTRAI SHAH, 202, 2 ND FLOOR, SECTOR -28, KESAR VILLA BLDG.,PLOT NO.166, VASHI, NAVI MUMBAI 400703 PAN:ABAPS7494K : / RESPONDENT REVENUE BY : MS. SMITA VERMA ASSESSEE BY : SHRI L. L. TOLANI / DATE OF HEARING : 02/11/2020 / DATE OF PRONOUNCEMENT : 23/11/2020 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-26, MUMBAI ( I N SHORT THE CIT(A)) DATED 13/02/2019 FOR THE ASSESSMENT YEAR 2010-11. 2 ITA NO. 2985/MUM/2019 (A.Y.2010-11) 2. SHRI L.L. TOLANI, APPEARING ON BEHALF THE ASSES SEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING MACH INERY PARTS FOR CONCRETE EQUIPMENTS. IN REASSESSMENT PROCEEDINGS THE ASSESS ING OFFICER MADE ADDITION OF RS.5,04,697/- ON THE GROUND THAT THE ASSESSEE HA D OBTAINED BOGUS PURCHASE BILLS FROM DECLARED HAWALA DEALERS. THE LD.AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER MADE ADDI TION OF THE ENTIRE ALLEGED BOGUS PURCHASES, WHEREAS THE SALES MADE BY THE AS SESSEE WERE ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSEE CARRIED THE IS SUE IN APPEAL BEFORE THE CIT(A). THE CIT(A) RESTRICTED THE ADDITION TO 12 .5% OF THE BOGUS PURCHASES. THE SAME HAS BEEN ACCEPTED BY THE ASSESSEE. THE A PPEAL OF REVENUE IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN THE LIGHT OF CBDT CIRCULAR NO. NO. 17/2019, DATED 08-08-2019. 3. MS. SMITA VERMA, REPRESENTING THE DEPARTMENT SUBMITTED THAT THOUGH T HE APPEAL OF REVENUE IS BELOW THE MONETARY LI MIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019 BUT THE CASE OF AS SESSEE FALLS UNDER EXCEPTION MENTIONED IN PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS FROM ENTRY PROVIDERS. THE ASSESSEE HAS FAILED TO SUBSTANTIATE GENUINENESS OF THE PURCHASE TRANSACTIONS. THE NOTICES ISSUED TO THE PARTIES UN DER SECTION 133(6) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON THE AD DRESSES FURNISHED BY THE ASSESSEE WERE RETURNED UNSERVED. THE ASSESSEE COUL D NOT PRODUCE THE PARTIES BEFORE THE ASSESSING OFFICER TO PROVE GENUINENESS OF THE TRANSACTIONS. HENCE, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE B OGUS PURCHASES. 4. BOTH SIDES HEARD, ORDERS OF THE AUTHORITIES BEL OW EXAMINED. THE ONLY ISSUE IN APPEAL BY THE REVENUE IS AGAINST RESTRIC TING THE ADDITION TO 12.5% OF 3 ITA NO. 2985/MUM/2019 (A.Y.2010-11) THE ALLEGED BOGUS PURCHASES AS AGAINST 100% ADDITIO N MADE BY THE ASSESSING OFFICER. UNDISPUTEDLY, THE ASSESSING OFFICER HAS N OT QUESTIONED THE SALES MADE BY THE ASSESSEE. WITHOUT PURCHASES THERE CANN OT BE SALES, HENCE, THE ENTIRE BOGUS PURCHASES CANNOT BE ADDED. IT IS ONL Y THE PROFIT ELEMENT EMBEDDED IN BOGUS TRANSACTION THAT HAS TO BE BROUG HT TO TAX. THE CIT(A) HAS ESTIMATED G.P @ 12.5% ON BOGUS PURCHASES. THE SAM E HAS BEEN ACCEPTED BY THE ASSESSEE. THE FINDINGS OF THE CIT(A) ARE REAS ONABLE AND JUSTIFIED, HENCE, NO INTERFERENCE IS WARRANTED. THE IMPUGNED ORDERS IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON MONDAY THE 23RD DAY O F NOVEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, +(/ DATED: 23/11/2020 VM , SR. PS(O/S) ,-./0- COPY OF THE ORDER FORWARDED TO : 1. 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