ITO - 4(2)(4), MUMBAI V. M/S MAYA JEWELS PRIVATE LIMITED, MUMBAI

ITA 2994/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1938 (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: 2009-2010
• Appeal Filed On: 07-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase; Tax effect; Reassessment proceedings
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2994 / / 2019 (%. .2009-10 ) ITA NO. 2994/MUM/2019 (A.Y.2009-10) ITO-4(2)(4), ROOM NO.647, 6 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 / VS. : / APPELLANT M/S. MAYA JEWELS PVT. LTD., 1, AGR, 76/78, PATEL BUILDING, S K MEMON STREET, ZAVERI BAZAR, KALBADEVI ROAD, MUMBAI 400 002 PAN:AAFCM5335G : / RESPONDENT REVENUE BY : MS. SMITA VERMA ASSESSEE BY : NONE / 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)-2, MUMBAI ( IN SHORT THE CIT(A)) DATED 25/02/2019 FOR THE ASSESSMENT YEAR 2009-10. 2 ITA NO. 2994/MUM/2019 (A.Y.2009-10) 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM T HE RECORDS ARE : THE ASSESSEE IS ENGAGED IN MANUFACTURING AND TRADING OF GOLD, SILVER, DIAMOND AND IMITATION JEWELLERY. THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 WAS REOPENED IN THE CASE OF THE ASSESSEE ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTR A THAT THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS AMOUNTIN G TO RS.27,92,647/- FROM DECLARED HAWALA OPERATORS. IN REASSESSMENT PROCEED INGS THE ASSESSING OFFICER ISSUED NOTICES UNDER SECTION 133(6) OF THE INCOME T AX ACT, 1961 ( IN SHORT THE ACT) TO THE PARTIES FROM WHOM THE ASSESSEE HAD MAD E ALLEGED BOGUS PURCHASES. HOWEVER, THE NOTICES WERE RECEIVED BACK UNSERVED WITH POSTAL REMARKS, NOT KNOWN / LEFT/ REFUSED. ALTHOUGH THE ASSESSEE PRODUCED DETAILS VIZ. BILLS, BANK STATEMENT, CONFIRMATION OF ACCOUNT S, STOCK REGISTER, MODE OF PAYMENT AND MODE OF DELIVERY OF GOODS, ETC., THE A SSESSING OFFICER HELD THAT THE ASSESSEE HAD OBTAINED FICTITIOUS INVOCES FROM S USPICIOUS DEALERS AND MADE ADDITION OF 20% OF ALLEGED BOGUS PURCHASES . AGGRIEVED BY THE ASSESSMENT ORDER DATED 13/03/2015 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE DOCUMENTS ON RECORD AND CONSIDERING THE SUBMISSIONS OF ASSESSEE RESTRICTED THE ADDITION T O 6% OF THE ALLEGED NON- GENUINE PURCHASES. AGAINST THE FINDINGS OF CIT(A ), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. MS. SMITA VERMA , REPRESENTING THE DEPARTMENT SUBMITTED THAT ALTHOU GH THE TAX EFFECT INVOLVED IN THIS APPEAL IS BELOW THE MONETARY LIMIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-201 9 BUT THE CASE OF ASSESSEE FALLS IN EXCEPTION PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018, FURTHER AMENDED BY CIRCULAR DATED 20-08.2018. THE LD. DEPARTMENTAL REPRESENTATIVE 3 ITA NO. 2994/MUM/2019 (A.Y.2009-10) FURTHER SUBMITTED THAT THE ASSESSEE HAS FAILED TO PRODUCE THE PARTIES FROM WHOM THE BOGUS PURCHASES WERE MADE. EVEN THE NO TICES SENT TO THE ALLEGED SUPPLIER OF GOODS UNDER SECTION 133(6) OF THE ACT ON THE ADDRESS FURNISHED BY THE ASSESSEE WERE RETURNED BACK UNSERVED. THE ASSES SEE FAILED TO PROVE GENUINENESS OF THE PURCHASES. THE ASSESSING OFFICE R IN A FAIR MANNER MADE ADDITION @20% OF THE BOGUS PURCHASES TO COVER UP TH E LEAKAGE OF REVENUE. THE LD. DEPARTMENTAL REPRESENTATIVE PRAYED FOR REVE RSING THE FINDINGS OF CIT(A) AND UPHOLDING THE ASSESSMENT ORDER. 4. THE SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESE NTATIVE HEARD AND ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE IS A TRADER AND MANUFACTURER OF GOLD, SILVER, DIAMOND AND IMITATION JEWELLERY. ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT , GOVERNMENT OF MAHARASHTRA BY THE INVESTIGATION WING OF INCOME TAX DEPARTMENT REASSESSMENT PROCEEDINGS WERE INITIATED IN THE CASE OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. DURING THE COURSE OF RE ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED COPIES OF BILLS, BANK STATEME NTS, CONFIRMATIONS OF PAYMENT, STOCK REGISTER, ETC. TO PROVE GENUINENESS OF PURCHASE OF GOODS. HOWEVER, THE ASSESSING OFFICER MADE ADDITION OF RS. 5,58,530/- I.E. 20% OF THE TOTAL ALLEGED BOGUS PURCHASES ON THE GROUND THAT T HE ASSESSEE HAD FAILED TO PRODUCE THE PARTIES FROM WHOM ALLEGED BOGUS BILLS WERE PROCURED. IN FIRST APPEAL, THE CIT(A) RESTRICTED THE ADDITION TO 6% OF THE ALLEGED BOGUS PURCHASES. THE ASSESSEE HAS DECLARED G.P @ 6.17% DURING THE PE RIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. I AM OF THE CONSIDER ED VIEW THAT THE ADDITION MADE BY ASSESSING OFFICER WAS ON HIGHER SIDE. THE CIT(A) HAS RIGHTLY RESTRICTED IT TO THE G.P DECLARED BY THE ASSESSEE. I FIND NO REASON TO INTERFERE WITH THE 4 ITA NO. 2994/MUM/2019 (A.Y.2009-10) FINDINGS OF CIT(A). ACCORDINGLY, THE SAME ARE UPHE LD AND THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 5. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON MONDAY THE 23RD DAY OF NO VEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 23/11/2020 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