M/S ESCORT FORGING & STEEL INDUSTRIES, MUMBAI V. ITO 27 (1)94), MUMBAI

ITA 353/MUM/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0315 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 353 //20 20 (. . 2011-12 ) ITA NO.353/MUM/2020 (A.Y.2011-12) M/S ESCORT FORGING & STEEL INDUSTRIES 37/2, MAITRI PARK, SION TROMBAY ROAD, CHEMBUR, MUMBAI-400071. PAN: AABFE7047C ...... ' / APPELLANT VS. ITO, 27(1)(4), 3 RD FLOOR, TOWER NO.6, VASHI STATION COMPLEX, VASHI-400703. ..... (*/ RESPONDENT ' +/ APPELLANT BY : NONE (* +/ RESPONDENT BY : SH. SANJAY J. SETHI , / DATE OF HEARING : 23/06/2021 , / DATE OF PRONOUNCEMENT : 01/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-24, MUMBAI [HEREINAFTER REFERR ED TO AS THE CIT(A)] DATED 24.05.2018 FOR THE ASSESSMENT YEAR (AY) 2011- 12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF IRON & STEEL. THE ASSESSME NT FOR AY 2011-12 IN THE 2 . 353 //20 20 (. .2011-12 ) ITA NO.353/MUM/2020 (A.Y.2011-12) CASE OF ASSESSEE WAS RE-OPENED ON THE GROUND THAT T HE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS. 71,18,607/- F ROM FOLLOWING DEALERS: SR. NO. NAME OF THE PARTY AMOUNT 1 SAIRAM TRADING CORPORATION 22,48,973/- 2 SHREE NAVDURGA STEEL TRADERS 48,69,634/- TOTAL 71,18,607/- DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICE R ISSUED NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 [H EREINAFTER REFERRED TO AS THE ACT] TO THE DEALERS. THE SAME WERE RETURNED B ACK UNSERVED BY THE POSTAL AUTHORITIES WITH REMARKS LEFT. THE ASSESSEE COULD NEITHER PRODUCE THE DEALERS NOR ANY CONFIRMATIONS FROM THEM. HENCE, THE ASSESSEE COULD NOT PROVE AUTHENTICITY OF THE DEALERS FROM WHOM ALLEGED DISPU TED PURCHASES WERE MADE. FURTHER, THE ASSESSEE COULD NOT PROVE TRAIL OF GOOD S. THE AO HELD THE PURCHASES MADE FROM SUSPICIOUS DEALERS AS BOGUS AND MADE ADDI TION OF RS. 8,89,826/- BY ESTIMATING MARGIN ON BOGUS PURCHASE AT 12.5%. AGAIN ST THE ADDITION MADE, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) UPHELD THE ASSESSMENT ORDER AND DISMISSED THE APPEAL OF ASSESSEE. NOW THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE (DR) HEARD, ORDERS OF THE AUTHORITIES BELOW EXAMINED. UNDISPUTE DLY, THE ASSESSEE COULD NOT DISCHARGE ITS ONUS IN PROVING GENUINENESS OF TH E DEALERS AND THE PURCHASES MADE FROM THEM. THE ASSESSEE HAS RAISED OBJECTION T HAT THE AO AND CIT(A) HAS FAILED TO FOLLOW THE RATIO LAID DOWN BY HONBLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF PCIT V/S M/S. MOHD. HAJI ADAM & CO. IN INCO ME TAX APPEAL NO. 1004 OF 3 . 353 //20 20 (. .2011-12 ) ITA NO.353/MUM/2020 (A.Y.2011-12) 2016 DECIDED ON 11.02.2019 WHILE ESTIMATING ADDITIO N ON BOGUS PURCHASES. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, I DEEM IT APPROPRIATE TO RESTORE THIS ISSUE BACK TO THE FILE OF AO TO RE-COMPUTE DISALLOW ANCE IN RESPECT OF BOGUS PURCHASES FOLLOWING THE DECISION RENDERED BY HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT V/S M/S. MOHD. HAJI ADAM & CO. (SUPRA). 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 01 ST DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 1/ DATED: 01/07/2021 SK, PS ( 2 ( 2 ( 2 ( 2 COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. (* / THE RESPONDENT. 3. 3 ( )/ THE CIT(A)- 4. 3 CIT 5. ( , . . . , / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI