ITO 29(3)(1), Mumbai V. SHRI. SANJAY RAMCHANDRA SHAH, Mumbai

ITA 4022/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1460 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: SANJAY R SHAH IN PERSON
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 4022 / / 2019 (%. .2010-11 ) ITA NO. 4022/MUM/2019 (A.Y.2010-11) INCOME TAX OFFICER 29(2)(1), 433, 4 TH FLOOR, KAUTILYA BHAVAN, BKC, BANDRA, MUMBAI 400 051 / VS. : / APPELLANT SHRI SANJAY RAMCHANDRA SHAH, B-1/606, KUKREJA COMPLEX, LBS MARG, BHANDUP(W), MUMBAI 400 078 PAN: AALPS7651J : / RESPONDENT REVENUE BY : SHRI SANJAY J. SETHI ASSESSEE BY : SHRI SANJAY R. SHAH (ASSESSEE IN PERSON) / DATE OF HEARING : 03/12/2020 / DATE OF PRONOUNCEMENT : 03/12/2020 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-40, MUMBAI ( IN SHORT THE CIT (A)) DATED 25/03/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN MANUFACTURING AND TRADING OF SCHOOL BAGS. ON THE BASIS OF 2 ITA NO. 4022/MUM/2019 (A.Y.2010-11) INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, GOV ERNMENT OF MAHARASHTRA, THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 IN THE CASE OF THE ASSESSEE WAS REOPENED. AS PER THE INFORMATION RECEIVED, THE ASS ESSEE HAD OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.1,47,656/- FROM S HREE YAMUNA IMPEX, A DECLARED HAWALA OPERATOR. IN REASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES . AGGRIEVED BY THE ASSESSMENT ORDER DATED 15/02/2016 PASSED UNDER SECT ION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) FOLLOWING THE DECISION REND ERED IN THE CASE OF CIT VS.SIMIT P. SHETH, 356 ITR 451(GUJ). RESTRICTED T HE ADDITION TO 12.5% OF THE BOGUS PURCHASES. AGAINST THE FINDINGS OF CIT(A), T HE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI SANJAY J. SETHI, REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE FINDING OF CIT(A). THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE A SSESSEE HAS FAILED TO PROVE GENUINENESS OF THE PURCHASES. IN RESPONSE TO NOTICE ISSUED UNDER SECTION 133(6) OF THE AC, THE SUPPLIER OF THE GOOD S HAS STATED THAT HE HAS NO BUSINESS RELATION WITH THE ASSESSEE. THE LD.DEPART MENTAL REPRESENTATIVE PRAYED FOR UPHOLDING THE ASSESSMENT ORDER. 4. SHRI SANJAY R. SHAH, THE ASSESSEE APPEARED IN PE RSON AND PRAYED FOR UPHOLDING THE ORDER OF CIT(A). HE STATED THAT HE H AS ACCEPTED THE FINDINGS OF CIT(A) AND HAS PAID TAXES THEREON. HE IS NOT FILIN G ANY FURTHER APPEAL. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSMENT IN THE CASE OF ASSESSEE WAS REOPENED ON THE BASIS OF INFORMATION THAT THE ASSESSEE HAS INDULGED IN OBTAINING ACCOMM ODATION ENTRIES THROUGH HAWALA OPERATOR. THE ASSESSEE ALLEGEDLY OBTAINED B OGUS PURCHASE BILLS 3 ITA NO. 4022/MUM/2019 (A.Y.2010-11) AMOUNTING TO RS.1,47,656/-. THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE SUCH BOGUS PURCHASES. UNDISPUTEDLY, THE ASSESSING OFFICER HAS ACCEPTED THE SALES DECLARED BY THE ASSESSEE. WITHOUT PURCHASES THERE CANNOT BE SALES. THEREFORE, THE ENTIRE ALLEGED BOGUS PURCHASES CANNO T BE ADDED. IT IS ONLY PROFIT ELEMENT EMBEDDED IN ALLEGED BOGUS TRANSACTI ONS THAT HAS TO BE BROUGHT TO TAX. THE CIT(A) RESTRICTED THE ADDITION TO 12.5 % OF SUCH BOGUS PURCHASES. I CONCUR WITH THE ORDER OF CIT(A). THE IMPUGNED ORDE R IS UPHELD AND THE APPEAL BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY T HE 3RD DAY OF DECEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 03/12/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *+ / THE RESPONDENT. 3. ,+ ( )/ THE CIT(A)- 4. ,+ CIT 5. -.*+% , . . . , / DR, ITAT, MUMBAI 6. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI