KESHAV STEEL INDIA, Mumbai V. ITO 19(2)(2), Mumbai

ITA 4073/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3780 (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; Accommodation entries
• Section: 143(3); 133(6); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 4071 / / 2019 (%. .2011-12 ) ITA NO. 4071/MUM/2019 (A.Y.2011-12) . 4072 / / 2019 (%. .2010-11 ) ITA NO. 4072/MUM/2019 (A.Y.2010-11) . 4073 / / 2019 (%. .2009-10 ) ITA NO. 4073/MUM/2019 (A.Y.2009-10) M/S.KESHAV STEEL INDIA, PROP.KISHANLAL M. JAYALWAL, 115/117, DR.M.G.MAHIMTURA MARG, 3 RD KUMBHARWADA LANE, MUMBAI 400 004 PAN: AAEPJ 9769R / VS. : / APPELLANT ITO- 19(2))(2), 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 THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-5, MUMBAI ( IN SHORT THE CIT(A)) FOR ASSESSMENT YEARS 2009-10 AND 2010-11, BOTH ORDERS DATED 26/04/2019, AND ORDER OF CIT(A) FOR ASSESSMENT YEAR 2011-12 DATED 3 0/04/2019. 2 ITA NO. 4071/MUM/2019 (A.Y.2011-12) ITA NO. 4072/MUM/2019 (A.Y.2010-11) ITA NO. 4073/MUM/2019 (A.Y.2009-10) 2. SINCE, GROUNDS RAISED IN ALL THESE THREE APPEAL S AND FACTS GERMANE TO THE ADDITION ARE IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. HOWEVER, FOR THE SAKE OF CONVENIENCE FACTS ARE NARRATED FROM THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2009-10. ITA NO. 4073/MUM/2019 A.Y.2009-10. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON-FERROUS M ETALS. INFORMATION WAS RECEIVED BY DIGT(INVN), MUMBAI FROM SALES TAX DEP ARTMENT, GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE HAS INDULGED IN OBTA INING ACCOMMODATION ENTRIES TO THE TUNE OF RS.78,39,811/- FROM VARIOUS (13) HAWALA DEALERS. ON THE BASIS OF SAID INFORMATION, THE ASSESSMENT IN THE CA SE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 WAS REOPENED. IN REOPENED ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH DOCUMENTS TO PROVE GENUINENESS OF THE PURCHASES AND ALSO PRODUCE THE S UPPLIERS. THE NOTICES WERE ISSUED TO THE SUPPLIERS UNDER SECTION 133(6) O F THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), ON THE ADDRESSES PROVIDED BY THE ASSESSEE. HOWEVER, THE NOTICES WERE RECEIVED BACK UNSERVED FROM POSTAL AU THORITIES WITH REMARKS NOT FOUND. TO PROVE GENUINENESS OF THE PURCHASES ASSESSEE PRODUCED PURCHASE INVOICES ISSUED BY HAWALA DEALERS, BANK ST ATEMENTS EVIDENCING PAYMENTS, ETC. HOWEVER, THE ASSESSEE FAILED TO PRO DUCE NECESSARY DOCUMENTS TO PROVE TRAIL OF GOODS VIZ. OCTROI RECEIPT, INWARD REGISTER, STOCK REGISTER, ETC. NO CONFIRMATIONS FROM THE HAWALA DEALERS WERE FIL ED EITHER. THE ASSESSING OFFICER RELYING ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT 3 ITA NO. 4071/MUM/2019 (A.Y.2011-12) ITA NO. 4072/MUM/2019 (A.Y.2010-11) ITA NO. 4073/MUM/2019 (A.Y.2009-10) VS. SIMIT P. SHETH 356 ITR 451 DISALLOWED NON-GENUI NE PURCHASES BY ESTIMATING PROFIT @ 12.5% ON TOTAL SUCH PURCHASES AND MADE ADD ITION OF RS.9,79,976/-. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 21/01/20 16 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) ASSAILING THE ADDITION . THE CIT(A) REJECTED THE CONTENTIONS OF THE ASSESSEE AND APPLIED THE RATIO OF CIT VS. SIMIT P. SHETH(SUPRA) ON THE FACTS OF THE ASSESSEEES CASE TO UPHOLD THE ADDITION MADE BY ASSESSING OFFI CER. HENCE, THE PRESENT APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL. 5. SHRI SANJAY J SETHI, REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE AP PEAL 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 T HE SUPPLIERS UNDER SECTION 133(6) OF THE ACT WAS RECEIVED BACK UNSERVED. THUS , THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE PURCHASES FROM SUSPIC IOUS DEALERS. 6. THE SUBMISSIONS MADE BY LD.DEPARTMENTAL REPRESE NTATIVE HEARD AND ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS FROM DEALERS DECLARED AS HA WALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER THE ASSESSEE FAILED TO AMPLIFY GE NUINENESS OF THE PURCHASES. NO DOCUMENTS TO PROVE TRAIL OF GOODS WERE FURNISHED BY THE ASSESSEE NOR CONFIRMATIONS FROM DEALERS FROM WHOM ALLEGED BOGUS PURCHASE BILLS WERE OBTAINED WERE FILED BY THE ASSESSEE. PAYMENTS MADE THROUGH BANKING CHANNEL 4 ITA NO. 4071/MUM/2019 (A.Y.2011-12) ITA NO. 4072/MUM/2019 (A.Y.2010-11) ITA NO. 4073/MUM/2019 (A.Y.2009-10) IS NOT CONCLUSIVE PROOF OF GENUINENESS OF THE TRANS ACTION. IN SHORT, THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE PUR CHASES. 7. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, I F IND THAT ESTIMATION OF G.P ON BOGUS PURCHASES AT 12.5% IS ON HIGHER SIDE. IN TRADING OF FERROUS AND NON- FERROUS METALS THE G.P IS GENERALLY BETWEEN 5% TO 8 %. THE ASSESSEE HAS SUO- MOTU DECLARED G.P OF 5.57% IN THE IMPUGNED ASSESSME NT YEAR. THE ENDS OF JUSTICE WOULD MEET IF THE ADDITION IS RESTRICTED TO 5.5% OVER AND ABOVE THE G.P DECLARED BY THE ASSESSEE ON BOGUS PURCHASES. 8. IN THE RESULT, APPEAL BY THE ASSESSEE IS PARTLY ALLOWED, IN THE TERMS AFORESAID. ITA NO.4072 & 4071/MUM/2019 , A.Y 2010-11 & 2011-12 : 9. THE FACTS IN THESE TWO ASSESSMENT YEARS ARE IDEN TICAL TO THE FACTS IN ASSESSMENT YEAR 2009-10, EXCEPT FOR THE QUANTUM OF BOGUS PURCHASES. EVEN SOME OF THE NAMES OF ACCOMMODATION ENTRY PROVIDERS IN THESE ASSESSMENT YEARS ARE COMMON. THE NATURE OF TRANSACTIONS CARRI ED OUT AND THE EVIDENCES PROVIDED BY THE ASSESSEE IN THESE ASSESSMENT YEARS IS IDENTICAL TO THE ONE AS IN ASSESSMENT YEAR 2009-10. IN OTHER WORDS, THE MO DUS OPERANDI OF TRANSACTIONS AND EVIDENCE BROUGHT BY THE ASSESSEE T O SUPPORT ITS CLAIM IN ALL THE THREE IMPUGNED ASSESSMENT YEARS IS SAME. THE A SSESSEE HAS DECLARED G.P @ 10.01% AND 5.69% IN ASSESSMENT YEARS 2010-11 AND 2011-12, RESPECTIVELY. THE FINDINGS GIVEN FOR RESTRICTING THE ADDITION TO 5.5% IN ASSESSMENT YEAR 2009-10 WOULD BE MUTATIS MUTANDIS APPLY TO THE IMPUGNED ASSESSMENT YEARS 5 ITA NO. 4071/MUM/2019 (A.Y.2011-12) ITA NO. 4072/MUM/2019 (A.Y.2010-11) ITA NO. 4073/MUM/2019 (A.Y.2009-10) AS WELL. IN THE RESULT, BOTH THESE APPEALS BY ASSE SSEE ARE PARTLY ALLOWED FOR PARITY OF REASONS. 10. TO SUM UP, ALL THE APPEALS BY ASSESSEE ARE PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 22 ND DAY OF FEBRUARY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 22/02/2021 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