BHAWANI SINGH RATHORE, MUMBAI V. ACIT - CIRCLE-24(1), MUMBAI

ITA 3117/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5448 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Reopening of assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , JM & SHRI M.BALAGANESH, AM ITA NO. 3117 /MUM/201 8 ( ASSESSMENT YEAR : 2010 - 11 ) SHRI BHAWANI SINGH RATHORE 1009/B WING, ADITYA VARDHAN CHANDIWALI ANDHERI (EAST), MU MBAI 400 059 VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 24(1), 6 TH FLOOR, PIRAMAL CHAMBERS MUMBAI 400 012 PAN/GIR NO. ADYPR3619R (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI BHUPENDRA SHAH REVENUE BY MS. N. HEMALATHA DATE OF HEARING 2 0 / 08 /2019 DATE OF PRONOUNCEMENT 23 / 08 /2019 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 3117/MUM/2018 FOR A.Y. 2010 - 11 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 36, MUMBAI IN APPEAL NO. CIT(A ) - 36/IT - 502/ACIT - 24(1)/2015 - 16 DATED 19/02/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 04/02/2016 BY THE LD. ASST. COMMISSIONER OF INCOME TAX CIR CLE 24(1) (HEREINAFTER REFERRED TO AS LD. AO). 2. THE GROUND NO.1 RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF REOPENING OF ASSESSMENT WAS STATED TO BE NOT PRESSED BY THE LD. AR AT ITA NO. 3117/MUM/2018 SHRI BHAWANI SINGH RATHORE 2 THE TIME OF HEARING. THE SAME IS RECKONED AS A STATEMENT MADE FROM THE BAR AND ACCORDINGLY, THE GROUND NO.1 IS DISMISSED AS NOT PRESSED. 2.1. THE GROUND NO.2 IS WITH REGARD TO THE ACTION OF THE LD. CIT(A) SUSTAINING THE ADDITION MADE IN THE SUM OF RS.17,78,174/ - ON ACCOUNT OF UNVERIFIABLE PURCHASES MADE BY THE ASSESSEE FROM 15 PARTIES. 3. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT ASSESSEE HAD EXPLAINED THAT HE HAD MADE PURCHASES FROM 15 PARTIES LISTED IN PAGE 2 & 3 OF THE ASSESSMENT ORDER TO THE TUNE OF RS.1,42,01,390/ - . THE LD. AO ALLEGED THAT THESE PARTIES ARE REF LECTED IN THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT WHEREIN THESE PARTIES WERE REFLECTED AS HAWALA DEALERS ENGAGED IN PROVIDING ACCOMMODATION BILLS. IT IS NOT IN DISPUTE THAT GOODS WERE INDEED DELIVERED TO THE ASSESSEE BY WAY OF PURCHASES MADE BY THE ASSESSEE IN THE GREY MARKET AND THESE 15 PARTIES BECAME UNVERIFIABLE AT THE END OF THE LD AO. IT IS NOT IN DISPUTE THAT ASSESSEE HAD INDEED MADE CORRESPONDING SALES IN RESPECT OF THESE PURCHASES MADE FROM THE GREY MARKET. IN THIS SCENARIO, WHAT IS TO BE TAXED IS ONLY THE PROFIT EARNED BY THE ASSESSEE OUT OF SUCH TRANSACTIONS. THE LD. AO HAD ESTIMATED 12.5% ON THE GROSS VALUE OF PURCHASES AS PROFIT EARNED BY THE ASSESSEE IN THESE TRANSACTIONS AND MADE THE ADDITION IN THE SUM OF RS.17,75,174/ - , WHICH HAS BEEN UPHELD BY THE LD. CIT(A). WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF BUILDING MATERIALS AND ALSO ENGAGED IN CONTRACT BUSINESS BY RUNNING TWO CONCERNS NAMELY M/S. BHAWANI ENTERPRISES AND M/S. JAGDAMBA CONSTRUCTION. WE FIND T HAT THE ASSESSEE HAS DISCLOSED GROSS PROFIT OF 7.90% AND 6.38% IN M/S. BHAWANI ENTERPRISES AND M/S. JAGDAMBA CONSTRUCTION RESPECTIVELY FOR THE YEAR ENDED 31/03/2010 AS PER THE TAX AUDIT REPORT. CONSIDERING THE TOTALITY OF THESE PECULIAR FACTS AND CIRCUMSTA NCES, WE DEEM IT FIT AND APPROPRIATE , THAT ADOPTION OF PROFIT AT 5% ON THE DISPUTED PURCHASES WOULD MEET THE ITA NO. 3117/MUM/2018 SHRI BHAWANI SINGH RATHORE 3 ENDS OF JUSTICE. THE LD. AO IS DIRECTED ACCORDINGLY. ACCORDINGLY, THE GROUND NO.2 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 4. IN THE RESULT, APPE AL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 / 08 /201 9 SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23 / 08 / 2019 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//