ITO 26(2)(3), Mumbai V. MOHD TALIB MAHBOOB GHONIA, Mumbai

ITA 4228/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8999 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 13-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S V NAIR SR
• Assessee Lawyers: VISHESH SRIVASTAV
• Keywords: Bogus purchase
• Section: 143(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.4228/M/2019 ASSESSMENT YEAR: 2010-11 ITO 26(2)(3), 3 RD FLOOR, ROOM NO.317, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 VS. SHRI MOHD TALIB MAHBOOB GHONIA, 1 ROOP DARSHAN NIWAS, OPP. KAJI CHAWL, KAJUPADA, KURLA WEST, MUMBAI 400 070 PAN: ADMPG 1858P (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VISHESH SRIVASTAV, A.R. REVENUE BY : SHRI S.V. NAIR, SR. A.R. DATE OF HEARING : 20.01.2021 DATE OF PRONOUNCEMENT : 22.01.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 31.12.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE PART DELETION OF ADDITION BY LD. CIT(A) TO THE TUNE OF 87.5% OF THE TOTAL BOGUS PURCHASES AS AGAINST 100% ADDITION MADE BY THE AO TOWARDS BOGUS PURCHASES. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 15.10.2010 DECLARING A TOTAL INCOME OF RS.12,49,340/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ITA NO.4228/M/2019 SHRI MOHD TALIB MAHBOOB GHONIA 2 ACT. THEREAFTER, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 DATED 09.03.2015 AFTER THE AO RECEIVED INFORMATION FROM DGIT (INV.) WING, MUMBAI THAT ASSESSEE IS A BENEFICIARY OF HAWALA PURCHASE ENTRIES FROM 9 PARTIES WHICH ARE MENTIONED IN PARA 4 OF THE ASSESSMENT ORDER, AGGREGATE WHEREOF COMES TO RS.95,70,489/-. ACCORDINGLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUIRED TO FURNISH THE NECESSARY EVIDENCES TO PROVE THE GENUINENESS OF THE PURCHASES. THE ASSESSEE DID NOT RESPOND TO THE COMMUNICATION FROM THE AO AND FINALLY THE AO ADDED THE ENTIRE BOGUS PURCHASES OF RS.95,70,489/-IN THE EX- PARTY ASSESSMENT ORDER PASSED UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT VIDE ORDER DATED 27.01.2016. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE SUSTAINING THE ADDITION TO THE EXTENT OF 12.5% OF THE BOGUS PURCHASES ON THE GROUND THAT IT IS ONLY THE PROFIT EMBEDDED IN THE BOGUS PURCHASES WHICH CAN BE BROUGHT TO TAX AND NOT THE ENTIRE PURCHASES. IN PARTLY ALLOWING THE APPEAL OF THE ASSESSEE, THE LD. CIT(A) FOLLOWED THE ORDER OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH (2013) 356 ITR 451 (GUJ) WHEREIN IT HAS BEEN HELD THAT ONLY THE PROFIT ELEMENT CAN BE PLACED AND NOT THE ENTIRE PURCHASES. 5. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT UNDISPUTEDLY THE ASSESSEE IS BENEFICIARY OF HAWALA PURCHASE ENTRIES FROM 9 PARTIES THE DETAILS WHEREOF ARE ITA NO.4228/M/2019 SHRI MOHD TALIB MAHBOOB GHONIA 3 GIVEN IN PARA 4 OF THE ASSESSMENT ORDER FROM WHOM AGGREGATE PURCHASE OF RS.95,70,489/- WERE MADE. THE ASSESSEE DID NOT COOPERATE DURING THE ASSESSMENT PROCEEDINGS DESPITE AO GRANTING SEVERAL OPPORTUNITIES TO THE ASSESSEE AND FINALLY THE ASSESSMENT WAS FRAMED EX-PARTE UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT. THEREAFTER, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE TO THE EXTENT OF 12.5% OF THE BOGUS PURCHASES BY FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE STATED HEREINABOVE. AFTER CONSIDERING THE FACTS ON RECORD AND PERUSING THE ORDER OF LD. CIT(A), WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS PASSED A VERY REASONED ORDER DIRECTING TO ASSESS THE PROFIT ELEMENT ON THE BOGUS PURCHASES AT 12.50%. THEREFORE, WE ARE INCLINED TO UPHOLD THE SAME BY DISMISSING THE APPEAL OF THE REVENUE. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.01.2021. SD/- SD/- ( PAVAN KUMAR GADALE) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 22.01.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.