ITO 6 (3)(1), MUMBAI V. M/S IFHS STEELS PVT LTD, MUMBAI

ITA 302/MUM/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2084 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 133(6)

Judgement Text

, ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 302 / / 2020 (%. .2010-11 ) ITA NO. 302/MUM/2020 (A.Y.2010-11) INCOME TAX OFFICER 6(3)(1), ROOM NO.503, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 / VS. : / APPELLANT M/S. IFHS STEELS PVT. LTD. R.NO.4, 1 ST FLOOR, 193, NAGDEVI STREET, MUMBAI 400 003. PAN: AAACI4775M : / RESPONDENT APPELLANT BY : SHRI SANJAY J. SETHI RESPONDENT BY : NONE / DATE OF HEARING : 21/06/2021 / DATE OF PRONOUNCEMENT : 21/06/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI [IN SHORT THE CIT( A) ] DATED 30/09/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE IS A TRADER IN FASTENERS. THE ASSE SSING OFFICER MADE ADDITION ON ACCOUNT OF ASSESSEES ALLEGED INVOLVEMENT IN OBTAI NING BOGUS ACCOMMODATION ENTRIES TO THE TUNE OF RS.31,87,604/- FROM SUSPICIOUS DEALER S, DECLARED AS HAWALA OPERATORS BY 2 ITA NO. 302/MUM/2020 (A.Y.2010-11) THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA . DURING ASSESSMENT PROCEEDINGS THE ASSESSEE FAILED TO SUBSTANTIATE G ENUINENESS OF THE DEALERS AND THE PURCHASES MADE FROM THEM. THE ASSESSING OFFICER MA DE ADDITION OF ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 27/01/2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 19 61 ( IN SHORT THE ACT), THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE CIT(A). TH E CIT(A) AFTER EXAMINING FACTS OF THE CASE AND PLACING RELIANCE ON DECISION OF THE TRI BUNAL IN THE CASE SANJAY H. SHAH IN ITA NO.5063/MUM/2017 DECIDED ON 16/02/2018 RESTRICTED T HE ADDITION TO 5%. NOW, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ASSAILING RELIEF GRANTED BY THE FIRST APPELLATE AUTHORITY. 3. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMEN T VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR RESTORING 100% DISA LLOWANCE OF BOGUS PURCHASES. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS IN PROVING AUTHENTICITY OF DEALERS. THE NOT ICES ISSUED UNDER SECTION 133(6) OF THE ACT TO THE DEALERS WERE RETURNED BACK UNSERVED BY T HE POSTAL AUTHORITIES WITH REMARKS LEFT/NOT KNOWN. THE ASSESSEE FAILED TO FURNISH DOCUMENTS TO PROVE THE L OF GOODS. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF N.K. PROTEINS VS. DCIT IN SLP NO.(C) 769 OF 2017 DECIDED ON 16/01/2017 AND PRAYED FOR REVERSING THE FINDINGS OF CIT(A). 4. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSE SSEE FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF PURCHASES AND THE DEALERS FROM WHOM SUCH PURCHASES WERE MADE. AT THE SAME TIME IT IS OBSERVED THAT THE SAL ES TURNOVER DECLARED BY ASSESSEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. WITHOU T PURCHASES, THERE CANNOT BE SALES. THEREFORE, ENTIRE ALLEGED BOGUS PURCHASES CANNOT B E DISALLOWED. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS THAT CAN BE BROUGHT TO TAX [ REF. PCIT VS. PARAMSHAKHTI DISTRIBUTORS PVT. LTD. IN INCOME TAX A PPEAL NO.413 OF 2017 DECIDED ON 3 ITA NO. 302/MUM/2020 (A.Y.2010-11) 15/07/2019 BY HON'BLE BOMBAY HIGH COURT . ]. THE ORDER OF CIT(A) IS FAIR AND REASONABLE, HENCE, WARRANTS NO INTERFERENCE. THE IMPUGNED ORDE R IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 21ST DAY OF JUNE, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 21/06/2021 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