M/S.VIRAT PIPES & TUBES, MUMBAI V. ITO 19(3)(5), MUMBAI

ITA 3836/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2009 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 3836 //2019 (. . 2010-11 ) ITA NO.3836/MUM/2019 (A.Y.2010-11) . 3837 //2019 (. . 2011-12 ) ITA NO.3837/MUM/2019 (A.Y.2011-12) M/S VIRAT PIPES & TUBES 59 TH NANUBHAI DESAI ROAD, KHETWADI MAIN ROAD, MUMBAI-400004. PAN: AAEFV8845L ...... ) / APPELLANT VS. ITO -19(3)(5) MATRU MANDIR, TARDEO ROAD, MUMBAI-400007 ..... *,/ RESPONDENT ) -/ APPELLANT BY : NONE *, -/ RESPONDENT BY : MS. SMITA VERMA . / DATE OF HEARING : 04/05/2021 . / DATE OF PRONOUNCEMENT : 07/06/2021 / ORDER PER VIKAS AWASTHY, J.M: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-6, MUMBAI [HER EINAFTER REFERRED TO AS THE CIT(A)]. IN ITA NO. 3836/MUM/2019, THE ASSESS EE HAS ASSAILED THE ORDER 2 . 3836 //2019 (. .2010-11 ) ITA NO.3836/MUM/2019 (A.Y.2010-11) . 3837 //2019 (. .2011-12 ) ITA NO.3837/MUM/2019 (A.Y.2011-12) OF CIT(A) FOR AY 2010-11 AND IN ITA NO. 3837/MUM/20 19, THE ASSESSEE HAS IMPUGNED THE ORDER OF CIT(A) FOR AY 2011-12. BOTH T HE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 01.04.2019. SINCE, THE FACTS AND THE GROUNDS RAISED IN BOTH THE APPEALS ARE IDENTICAL, THESE APPEALS ARE TAKEN UP T OGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. 2. FOR THE SAKE OF CONVENIENCE, FACTS ARE EXTRACTED FROM THE APPEAL OF ASSESSEE IN ITA NO. 3836/MUM/2019 FOR AY 2010-11. THE ASSESSEE IS A TRADER IN FERROUS AND NON-FERROUS METALS. ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA , ASSESSMENT IN THE CASE OF ASSESSEE FOR AY 2010-11 WAS RE-OPENED. DURI NG RE-ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS. 1,10,69,366/- FROM VARIOUS (NINE) DEALERS, DECLARED AS HAWALA OPERATORS. THE AO ISSUED NOTICES UNDER SECTI ON 133(6) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT ] TO THE DEALERS FROM WHOM THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS. THE NOTICES WERE RECEIVED BACK UNSERVED FROM POSTAL AUTHORITIES WITH REMARKS NOT KNOWN OR NO SUCH ADDRESSES OR LEFT. NO DOCUMENTS VIZ. TRANSPORT R ECEIPT, INWARD REGISTER, STOCK REGISTER, ETC. WERE PRODUCED BY THE ASSESSEE TO CONCLUSIVELY PROVE TRAIL OF GOODS. THE AO MADE ADDITION OF RS. 13,83,671/- BY E STIMATING GROSS PROFIT (GP) @ 12.5% ON NON-GENUINE PURCHASES. AGAINST THE ASSES SMENT ORDER DATED 17.02.2016 PASSED UNDER SECTION 143(3) READ WITH SE CTION 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF ASSESSEE AND CONFIRMED THE ADDITION. HENCE, THE PRE SENT APPEAL BY THE ASSESSEE. 3 . 3836 //2019 (. .2010-11 ) ITA NO.3836/MUM/2019 (A.Y.2010-11) . 3837 //2019 (. .2011-12 ) ITA NO.3837/MUM/2019 (A.Y.2011-12) 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT STRO NGLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD. DR SUBMITTED THAT THE ASSESSEE COULD NEITHER PRODUCE D EALERS FROM WHOM PURCHASES WERE MADE NOR ANY CONFIRMATIONS WERE FILE D BY THE ASSESSEE FROM THE DEALERS. NO DOCUMENT WAS PRODUCED BY THE ASSESS EE TO SHOW THAT THE GOODS WERE INDEED RECEIVED BY THE ASSESSEE. THE AO AND THE CIT(A) IN FAIR AND REASONABLE MANNER HAS ESTIMATED GROSS PROFIT (GP) O N BOGUS PURCHASE AT 12.5%. 4. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. THE ASSESSEE IS A TRADER IN FERROUS AND N ON-FERROUS METALS. UNDISPUTEDLY, THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE ALLEGED BOGUS PURCHASES AND THE DEALERS. AT THE SAME TIME, THE AO HAS ACCEPTED THE SALES TURNOVER DECLARED BY THE ASSESSEE. IN SUCH CIRCUMSTANCES, IT IS ONLY THE PROFIT ELEMENT EMBEDD ED IN BOGUS TRANSACTIONS THAT HAS TO BE BROUGHT TO TAX. GENERALLY IN TRADING OF FERROUS AND NON-FERROUS METALS, THE GP RANGES BETWEEN 5% TO 8%. THE ASSESSE E HAS DECLARED GP OF 7.55% IN AY 2010-11. THE ESTIMATION OF GP ON BOGUS PURCHASE AT 12.5% IS ON HIGHER SIDE. TO MEET THE ENDS OF JUSTICE, THE IMPUG NED ORDER IS MODIFIED AND THE GP ON BOGUS PURCHASES IS RESTRICTED TO 7.5% OVE R AND ABOVE THE GP DECLARED BY THE ASSESSEE. 5. THE APPEAL BY ASSESSEE IS PARTLY ALLOWED, IN THE TERMS AFORESAID. 4 . 3836 //2019 (. .2010-11 ) ITA NO.3836/MUM/2019 (A.Y.2010-11) . 3837 //2019 (. .2011-12 ) ITA NO.3837/MUM/2019 (A.Y.2011-12) ITA NO. 3837/MUM/2019 FOR AY 2011-12 6. THE FACTS IN BOTH THE APPEALS ARE IDENTICAL EXCE PT FOR THE AMOUNT OF BOGUS PURCHASES, THEREFORE, THE FINDINGS GIVEN IN A PPEAL OF ASSESSEE IN ITA NO.3836/MUM/2019 FOR AY 2010-11 WOULD MUTATES MUTAN DIS APPLY TO THE PRESENT APPEAL. ACCORDINGLY, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR PARITY OF REASONS. 7. TO SUM UP, BOTH THE APPEALS BY ASSESSEE ARE PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY , THE 07 TH DAY OF JUNE, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3/ DATED: 07/06/2021 SK, PS * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *, / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI