ITO - 22(2)(1) , MUMBAI V. MAMTA MAHENDA KUMAWAT, MUMBAI

ITA 329/MUM/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9099 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2021
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Reasonable cause; Accommodation entries
• Section: 147; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (VIRTUAL COURT) “SMC” BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA NOs. 328 & 329/MUM/2021 (A.Ys: 2009-10 & 2010-11) Income Tax Officer – 22(2)(1) Room No. 321, 3 rd Floor Piramal Chambers, Lalbaug Mumbai – 400 012 v. Mamta Mahendra Kumawat Shop No. G-2, Square Mall 33 rd Linking Road, Near KFC Bandra (W), Mumbai - 400050 PAN: AGRPK0359B (Appellant) (Respondent) Assessee by : None Department by : Ms. Kranti Yadav Date of Hearing : 08.11.2021 Date of Pronouncement : 08.11.2021 O R D E R PER C.N. PRASAD (JM) 1. These appeals are filed by the revenue against different orders of the Learned Commissioner of Income Tax (Appeals)–33, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 10.08.2020 for the A.Y. 2009-10 and 2010-11, in restricting the disallowance to 25% of purchases as against the 100% of the purchases disallowed as non-genuine/bogus by the Assessing Officer. 2 ITA NO. 328 & 329/MUM/2021 (A.Ys: 2009-10 & 2010-11) Mamta Mahendra Kumawat 2. Briefly stated the facts are that, assessee an individual deriving income from business, filed return of income on 29.09.2009 and 13.10.2010 declaring income of ₹.4,96,630/- and ₹.8,42,860/- for the A.Y.2009-10 and A.Y. 2010-11 respectively, and the returns were processed u/s. 143(1) of the Act. Subsequently, Assessing Officer received information from the Sales Tax Department, Mumbai about the accommodation entries provided by various dealers and assessee was also one of the beneficiary from those dealers. The assessments were reopened u/s. 147 of the Act based on the information received from Sales Tax Department, Mumbai, that the assessee has availed accommodation entries from various dealers who are said to be providing accommodation entries without there being transportation of any goods. In the reassessment proceedings, the assessee was required to prove the genuineness of the purchases made from various parties as mentioned the Assessment Order. In response assessee did not make any compliance to notices and therefore, Assessing Officer treated entire alleged bogus purchases of ₹.58,042/- and ₹.32,193/- for the A.Y.2009-10 and A.Y. 2010-11 respectively as non-genuine. On appeal the Ld.CIT(A) restricted the disallowance to 25% of purchases. Against this order revenue is in appeal. 3 ITA NO. 328 & 329/MUM/2021 (A.Ys: 2009-10 & 2010-11) Mamta Mahendra Kumawat 3. Inspite of issue of notice none appeared on behalf of assessee nor any adjournment was sought. Therefore, I proceed to dispose of these appeals on merits on hearing Ld.DR. 4. Ld. DR vehemently supported the orders of the Assessing Officer. 5. Heard Ld.DR, perused the orders of the authorities below. On a perusal of the order of the Ld.CIT(A), I find that the Ld.CIT(A) considered this aspect of the matter elaborately with reference to the submissions of the assessee and the averments in the Assessment Order and restricted the disallowance to 25% of purchases. While holding so, the Ld.CIT(A) observed as under: - “A.Y: 2009-10 5. I have carefully considered the statement of facts and grounds of appeal of the appellant and the facts mentioned in the assessment order. 5.1 The appeal has been filed on 24.09.2015 whereas the assessment order was served on assessee on 27/03/2015. It has beenexplained that the order was given to the consultant for filing appeal who could not file in time due to surgical operation in Hospital and his staff forgot to file in time. The appellant seems to have reasonable cause for delay in filing appeal and hence the delay is hereby condoned. 5.2. The appellant in the statement of facts has stated that the purchases of Rs. 58,042/- from Big Step International are genuine purchases and payments to them have been made by cheques only. On perusal of assessment order, it is found that the AO has not made any 4 ITA NO. 328 & 329/MUM/2021 (A.Ys: 2009-10 & 2010-11) Mamta Mahendra Kumawat enquiry at his end and has totally relied on information from the Sales Tax Department. However, as per information from the Sales Tax Department, Big Step International has issued bogus bills only. The assessee also could not prove the genuineness of the purchase. Therefore, the view of the AO that this is the case of bogus purchase is accepted. However, making disallowance @ 100 % is not justified and it is held that only profit element embedded in the said purchase should be disallowed. The additional profit is estimated at 25% in this case. In view of above, the addition of Rs.43,531/- being 75% of bogus purchase of Rs. 58,042/- is hereby deleted and the balance addition of Rs. 14,511/- being 25% of bogus purchase of Rs. 58,042/- is hereby confirmed. The ground is partly allowed. 6. In result, appeal of the appellant for A.Y.2009-10 is Partly allowed A.Y. 2010-11 5. I have carefully considered the statement of facts and grounds of appeal of the appellant and the facts mentioned in the assessment order. 5.1 The appeal has been filed on 24/09/2015 whereas the assessment order was served on assessee on 27/03/2015. It has been explained that the order was given to the consultant for filing appeal who could not file in time due to surgical operation in Hospital and his staff forgot to file in time. The appellant seems to have a reasonable cause for delay in filing appeal and hence the delay is hereby condoned. 5.2 The appellant in the statement of facts has stated that the purchases of Rs. 32,193/- from the aforesaid parties are genuine purchases and payments to them have been made by cheques only. On perusal of assessment order, it is found that the AO has not made any enquiry at his end and has totally relied on information from the Sales Tax Department. However, as per information from the Sales Tax Department, the parties under consideration have issued bogus bills only. The assessee also could not prove the genuineness of the purchase. Therefore, the view of the AO that this is the case of bogus purchase is accepted. However, making disallowance @ 100% is not justified and it is held that only profit element embedded in the said purchase should be disallowed. The additional profit is estimated at 25% in this case. In view of above, the addition of Rs. 24,145/- being 75 % of bogus purchase of Rs. 32,193/- is 5 ITA NO. 328 & 329/MUM/2021 (A.Ys: 2009-10 & 2010-11) Mamta Mahendra Kumawat hereby deleted and the balance addition of Rs. 8,048/- being 25% of bogus purchase of Rs. 32,193/- is hereby confirmed. The ground is partly allowed. 10. In result, appeal of the appellant for A.Y.201 0-11 is Partly allowed.” 6. On a careful perusal of the order of the Ld.CIT(A) and the reasons given therein, I do not find any infirmity in the order passed by the Ld.CIT(A) in restricting the addition to 25% of purchases as against 100% of the purchases disallowance made by the Assessing Officer in both these assessment years under consideration. Grounds raised by the revenue are dismissed. 7. In the result, appeals of the Revenue are dismissed. Order pronounced in the virtual court on 08.11.2021. Sd/- (C.N. PRASAD) JUDICIAL MEMBER Mumbai / Dated 08.11.2021 Giridhar, Sr.PS 6 ITA NO. 328 & 329/MUM/2021 (A.Ys: 2009-10 & 2010-11) Mamta Mahendra Kumawat Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum