RAJENDRA TUBES & FITTINGS, MUMBAI V. ITO WD 19(3)(1), MUMBAI

ITA 3431/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9101 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITRA
• Assessee Lawyers: ISHWAR P RATHI
• Keywords: Reopening of assessment; Bogus purchase; Accommodation entries
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 3431 / MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) M/S. RAJENDRA TUBES & FITTINGS 160/162, 3 RD KUMBHARWADA MUMBAI 400 004 VS. ITO WD 19(3)(1) MATRU MANDIR BUILDING TARDEO, MUMBAI 400 007 PAN/GIR NO. AAFFR3990K APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI ISHWAR P. RATHI REVENUE BY SHRI S.K. MITRA DATE OF HEARING 07 / 09 /201 7 DATE OF PRONOUNCEME NT 09 / 10 /201 7 / 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) - 29, MUMBAI DATED 20/03/2017 FOR A.Y.2010 - 11 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. IN THIS APPEAL ASSESSEE IS AGGR IEVED BY THE ACTION OF CIT(A) FOR DELETING THE REOPENING OF ASSESSMENT AS WELL AS CONFIRMING THE ADDITION BY ESTIMATING PROFIT AT 8% OF BOGUS PURCHASES. 3. RIVAL CONTENTIONS H AVE BEEN HEARD AND RECORD PERUSED. THE AO HAD INFORMATION THAT THE ASSESSEE HAD M ADE PURCHASES FROM THE PARTIES TO THE TUNE OF RS.1,89,09,471/ - AND THAT THESE PARTIES WERE INVOLVED IN PROVIDING MERE ACCOMMODATION ENTRIES WITH NO GENUINE TRANSACTIONS. IN ORDER TO VERIFY THE GENUINENESS OF THE PURCHASES CLAIMED BY THE ASSESSEE FROM ITA NO. 3431/MUM/2017 M/S. RAJENDRA TUBES & FITTINGS 2 THESE PARTIES, THE AO ASKED THE ASSESSEE TO FURNISH SUPPORTING DOCUMENTS FOR CORRESPONDING SALES AFFECTED. THE ASSESSEE COULD FURNISH THE ADDRESSES OF THE PARTIES. THE AO THEREFORE ISSUED NOTICE U/S. 133(6) TO THE PARTIES BUT THE NOTICES WERE RETURNED BACK UNSE RVED BY THE POSTAL AUTHORITIES, THE AO FURTHER HELD THAT APART FROM PAYMENTS MADE THROUGH BANKING CHANNELS AND CHART SHOWING DETAILS OF PURCHASES OF THE ALLEGED PARTIES AND CORRESPONDING SALES, THE ASSESSEE COULD NOT FURNISH THE VITAL DOCUMENTS SUCH AS DEL IVERY CHALLANS, TRANSPORT RECEIPTS, OCTROI RECEIPTS ETC. ON THE OTHER HAND, THE SALES TAX DEPARTMENT HAS GIVEN INFORMATION THAT THESE PARTIES ARE INVOLVED IN PROVIDING ONLY ACCOMMODATION ENTRIES FOR PURCHASES. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE PAR TIES FOR VERIFICATION BUT THE ASSESSEE FAILED TO DO SO. THE AO THEREFORE HELD THAT THE PURCHASES MADE FROM THE ABOVE PARTIES ARE BOGUS AND PRO CEEDED TO ESTIMATE THE GP ON THESE PURCHASES @12.5% AND MADE AN ADD ITION OF RS.23,63,684/ - . 4. BY THE IMPUGNED ORD ER, CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF 8% OF ITS PURCHASE. 5. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. CONSIDERING THE GP RATE SHOWN BY THE ASSESSEE DURING THE YEAR AND AS WELL AS DURI NG THE EARLIER TWO YEARS, I DEEM IT PROPER TO RESTRICT ADDITION TO THE EXTENT OF 6% OF THE BOGUS PURCHASES. I DIRECT ACCORDINGLY. ITA NO. 3431/MUM/2017 M/S. RAJENDRA TUBES & FITTINGS 3 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 09 / 10 /2 017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 09 / 10 /201 7 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, ITA T, MUMBAI 6. GUARD FILE. //TRUE COPY//