M/S RISHABH STEEL CENTRE , Mumbai V. ITO 19(3)(1), Mumbai

ITA 4070/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3775 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• 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 . 4070 / / 2019 (%. .2009-10 ) ITA NO. 4070/MUM/2019 (A.Y.2009-10) M/S. RISHABH STEEL CENTRE, 99, 2 ND PATHAN STREET, 5 TH KUMBHARWADA, MUMBAI 400 004 PAN: AADPJ7654R / VS. : / APPELLANT ITO- 19(3)(1), MATRU MANDIR TARDEO ROAD, MUMBAI 400 007 : / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SANJAY J SETHI / DATE OF HEARING : 03/12/2020 / DATE OF PRONOUNCEMENT : 22/02/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-5, MUMBAI ( IN SHORT THE CIT( A)) DATED 07/05/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON-FERROUS METAL S. INFORMATION WAS RECEIVED BY DIGT(INVN), MUMBAI FROM SALES TAX DEPARTMENT, GOV ERNMENT OF MAHARASHTRA THAT THE ASSESSEE HAS INDULGED IN OBTAINING ACCOMMODATIO N ENTRIES TO THE TUNE OF 2 ITA NO. 4070/MUM/2019 (A.Y.2009-10) RS.71,87,246/- FROM VARIOUS (14) HAWALA DEALERS. T HE ASSESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 WAS REOPENED O N THE BASIS OF AFORESAID INFORMATION. IN REOPENED ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH DOCUMENTS TO PROVE GENUINENESS OF THE PURCHASES AND ALSO PRODUCE THE SUPPLIERS. THE NOTICES WERE ISSUED TO THE SUPPLIERS UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), ON THE ADDRESSES PROVIDED BY THE ASSESSEE. HOWEVER, THE NOTICES WERE RECEIVED BACK UNSERVED BY THE POSTAL AUTHORITIES WITH REMARK NOT KNOWN OR LEFT. TO PROVE GENUINENESS OF THE PURCHASES ASSESSEE PRODUCED BILLS ISSUED BY HAWALA DEALERS, B ANK STATEMENTS, COPY OF SALES TAX VAT CHALLANS AND LEDGER ACCOUNTS OF SUPPLIERS. HO WEVER, THE ASSESSEE FAILED TO PRODUCE NECESSARY DOCUMENTS TO PROVE TRAIL OF GOODS VIZ. OCTROI RECEIPT, INWARD REGISTER, STOCK REGISTER, ETC. NO CONFIRMATIONS FR OM THE HAWALA DEALERS WERE FILED EITHER. THE ASSESSING OFFICER RELYING ON THE DECI SION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH, 356 ITR 451 DISALLOWED NON-GENUINE PURCHASES BY ESTIMATING PROFIT @ 12.5% ON TOTAL SUCH PURCHAS ES AND MADE ADDITION OF RS.8,98,406/-. 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 02/03/20 15 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED A PPEAL BEFORE THE CIT(A) ASSAILING THE ADDITION. THE CIT(A) REJECTED THE CONTENTIONS OF ASSESSEE AND FOLLOWED THE ORDER OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR ASSESS MENT YEAR 2011-12 AND CONFIRMED THE ASSESSMENT ORDER. HENCE, THE PRESENT APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL. 4. SHRI SANJAY J SETHI, REPRESENTING THE DEPARTMEN T VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ASSES SEE HAS NEITHER FILED CONFIRMATION FROM THE SUPPLIERS OF GOODS NOR HAS FU RNISHED DOCUMENTS TO SUPPORT TRAIL OF GOODS. EVEN THE NOTICES SENT TO THE SUPPL IERS UNDER SECTION 133(6) OF THE ACT 3 ITA NO. 4070/MUM/2019 (A.Y.2009-10) WERE RECEIVED BACK UNSERVED. THUS, THE ASSESSEE HA S FAILED TO PROVE THE GENUINENESS OF THE PURCHASES FROM SUSPICIOUS DEALE RS. 5. THE SUBMISSIONS MADE BY LD.DEPARTMENTAL REPRESEN TATIVE HEARD AND ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAS IN DULGED IN OBTAINING BOGUS PURCHASE BILLS FROM DEALERS DECLARED AS HAWALA O PERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. IN THE PROC EEDINGS BEFORE THE ASSESSING OFFICER, THE ASSESSEE FAILED TO AMPLIFY GENUINENESS OF THE PURCHASES. NO DOCUMENTS TO PROVE TRAIL OF GOODS WERE FURNISHED BY THE ASSES SEE NOR CONFIRMATIONS FROM DEALERS FROM WHOM ALLEGED BOGUS PURCHASE BILLS WERE OBTAINED WERE FILED BY THE ASSESSEE. IN SHORT, THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE PURCHASES. 6. I FIND THAT IN IDENTICAL SET OF FACTS IN ASSESSE ES OWN CASE IN ITA NO.6409 & 6410/MUM/2018 FOR ASSESSMENT YEAR 2011-12 AND 2010- 11, RESPECTIVELY DECIDED ON 29/01/2020 ADDITION ON ACCOUNT OF BOGUS PURCHASES WERE CONFIRMED BY THE TRIBUNAL. HOWEVER, THE TRIBUNAL RESTRICTED THE ADD ITION ON ACCOUNT OF BOGUS PURCHASES BY ADOPTING G.P RATE OF 5%. FOLLOWING THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010-11 AND 2011-12, THE ADDITION ON ACCOUNT OF BOGUS PURCHASES IN THE IMPUGNED ASSESSMENT YEAR IS RESTRICTED TO 5%. CONSEQUENTLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN THE AFORESAID TERMS. 7. IN THE RESULT, APPEAL BY ASSESSEE IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 22ND DAY OF FEBRUARY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 22/02/2021 VM , SR. PS(O/S) 4 ITA NO. 4070/MUM/2019 (A.Y.2009-10) 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