LALITKUMAR M JAIN, MUMBAI V. ITO 32(2)(1), MUMBAI

ITA 3342/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0857 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 3342 / MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) SHRI LALITKUMAR M. JAIN PROP. LALIT STEEL INDUSTRIES 111/112, SHIV DARSHAN SHIMOLI ROAD BORIVALI (WEST) MUMBAI 400 092 VS. ITO - 32(2)(1) MUMBAI PAN/GIR NO. AABPJ1308E APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI DEVENDRA JAIN REVENUE BY SHRI RAM TIWARI DATE OF HEARING 27/09/2017 DATE OF PRONOUNCEME NT 22 / 01 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 44, MUMBAI DATED 15/02/2017 FOR THE A.Y.2009 - 10 IN THE MATTER OF ORDER PASSED U/S. 143(3) R.W.S. 147 OF THE I.T. ACT. 2. RIVAL CONTENTIONS HAVE BE EN HEARD AND RECORD PERUSED. 3. FACTS IN BRIEF ARE THAT AO RECEIVED INFORMATION FROM SALES TAX DEPARTMENT THAT ASSESSEE HAD TAKEN BILLS FROM BOGUS SUPPLIERS. AFTER MAKING INDEPENDENT ENQUIRY, AO REACHED TO THE CONCLUSION THAT NO GOODS WERE SUPPLIED BY THES E SUPPLIERS. THE NOTICE ISSUED U/S.133(6) WERE ALSO NOT COMPLIED WITH NOR THE SUPPLIERS WERE PRODUCED BEFORE THE AO. ITA NO. 3342/MUM/2017 SHRI LALITKUMAR M JAIN 2 ACCORDINGLY, AO ESTIMATED PROFIT OF 12.5% ON SUCH BOGUS PURCHASES AND ADDED THE SAME IN ASSESSEES INCOME. 4. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE ME. 5. IT WAS ARGUED BY LEARNED AR THAT ASSESSEE HAS FURNISHED QUANTITATIVE DETAILS OF THE GOODS SO PURCHASED BEFORE THE LOWER AUTHORITIES AND THAT AO HAS NOT REJECTED BOOK S OF ACCOUNTS AND THAT IT WAS ONLY PART OF THE PURCHASE THAT WERE DISPUTING BY THE AO. HE FURTHER CONTENDED TH AT ASSESSEE HAS ALREADY SHOWN GP OF 10.5% THEREFORE, MAKING FURTHER ADDITION OF 12.5% WILL BE EXCESSIVE AND UNREASONABLE LOOKING INTO THE NATURE O F TRADE ASSESSEE WAS ENGAGED. 6. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL UNDER THE NAME AND STYLE OF M/S. LALIT STEEL INDUSTRIES. AO FOUND THAT ASSESSEE HAS TAKEN BILLS FROM 17 PARTIES AMOUNTING TO RS.80,26,220/ - . ACCORDINGLY ASSESSING OFFICER HELD THAT THE ABOVE PURCHASES ARE BOGUS AND ADDED RS.10,03,278/ - BEING THE ESTIMATED PROFIT AT 12.5% OF PURCHASES FROM ALLEGED HAWALA PARTIES. DURING THE COURSE OF ASSESSMENT, AO HAS GIVEN FULL OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE GENUINENESS OF PURCHASES BUT NEITHER THERE WAS ANY RESPONSE OF NOTICE ISSUED BY AO U/S.133(6) NOR THE SUPPLIERS WERE PRODUCED. ACCOR DINGLY, AO ESTIMATED PROFIT OF 12.5% BY ASSUMING THAT ASSESSEE HAS MADE PURCHASES BUT FROM THE GREY MARKET. HOWEVER, IT WAS CONTENTION OF LEARNED AR THAT ASSESSEE HAS ITA NO. 3342/MUM/2017 SHRI LALITKUMAR M JAIN 3 ALREADY SHOWN GP OF 10.5%, HOWEVER, NOWHERE ANY DOCUMENTARY EVIDENCE WAS PLACED ON RECORD BY LEARNED AR TO SUPPORT ITS CONTENTION THAT GP SHOWN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS 12.5%. IN THE INTEREST OF JUSTICE, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO TO VERIFY THE CORRECTNESS OF ASSESSEES CONTENTION WITH REGAR D TO GP OF 10.5% HAVING BEEN SHOWN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. IF THE AO FOUND THAT ASSESSEE HAS ALREADY SHOWN GP OF 10.5% THEN AO SHOULD RESTRICT THE ADDITION TO THE EXTENT OF 10%. HOWEVER, IF THE GP DISCLOSED BY ASSESSEE IS FOUND TO BE LESS THAN 10.5% THEN, WE CONFIRM THE ADDITION OF 12.5% AS MADE BY THE LOWER AUTHORITIES. 7. IN THE RESULT, APPEAL IS ALLOWED IN PART FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 22 / 01 /201 8 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 22 / 01 /201 8 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//