ITO 27(1)(5), Mumbai V. M/S JITENDRA D SHAH HUF, Mumbai

ITA 4457/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4943 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 01-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 4457 / /201 9 ((. . 2011-12 ) ITA NO.4457/MUM/2019 (A.Y.2011-12) ITO-27(1)(5), ROOM NO.410, 4 TH FLOOR, TOWER NO.6, RLY. STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 ...... * / APPELLANT ( VS. M/S. JITENDRA D. SHAH HUF, 8/20 KARSAN PATEL BUILDING, SANGHANI ESTATE, GHATKOPAR (W), MUMBAI 400 086 PAN: AAAHJ 1791F ..... +,/ RESPONDENT *-/ APPELLANT BY : SHRI SANJAY J. SETHI +,-/ RESPONDENT BY : NONE (., / DATE OF HEARING : 04/01/2021 /01 ., / DATE OF PRONOUNCEMENT : 01/04/2021 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -26, MUMBAI (IN SHORT THE CIT (A))DATED 05/04/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMEN T SUBMITTED THAT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.43,89,518/- F ROM TWO DEALERS DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVER NMENT OF MAHARASHTRA. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO PROV E GENUINENESS OF PURCHASES AND 2 . 4457 / /201 9 ((. .2011-12 ) ITA NO.4457/MUM/2019 (A.Y.2011-12) THE DEALERS. THE ASSESSING OFFICER MADE ADDITION BY ESTIMATING PROFIT EMBEDDED IN BOGUS PURCHASES AS 12.5%. THE ASSESSEE FILED APPEA L AGAINST ASSESSMENT ORDER DATED 27/07/2016 PASSED UNDER SECTION 143 (3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE CIT(A) RESTRICTED THE ADDITIO N TO 8% OF BOGUS PURCHASES. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ESTIMATI ON OF PROFIT BY ASSESSING OFFICER WAS FAIR AND JUSTIFIED. THE LD. DEPARTMENT AL REPRESENTATIVE PRAYED FOR REVERSING THE FINDINGS OF CIT(A) AND RESTORING THE ADDITION MADE IN ASSESSMENT ORDER. 3. THE SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESE NTATIVE HEARD AND ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE IS A T RADER OF IRON AND STEEL. DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE ALLEGEDLY OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.43,89,518/-. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF PUR CHASES AND AUTHENTICITY OF THE DEALERS. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE PCIT VS PRAMASHAKTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL 413 OF 2 017 DECIDED ON 15/7/2019 HAS HELD THAT ONLY THE PROFIT ELEMENT EMBEDDED IN BOGUS PURCHASES CAN BE TAXED. THE G.P. ESTIMATED BY ASSESSING OFFICER ON BOGUS PURCHA SES IS ON HIGHER SIDE. GENERALLY, THE PROFIT MARGIN IN TRADING OF FERROUS AND NON-FER ROUS METALS RANGE FROM 5% TO 8%. I FIND NO ERROR IN ESTIMATION OF PROFIT AT 8% BY TH E CIT(A). THE IMPUGNED ORDER IS UPHELD AND THE APPEAL BY REVENUE IS DISMISSED, SANS -MERIT. 4. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, TH E 01ST DAY OF APRIL, 2021. SD./- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3(/ DATED: 01/04/2021 VM , SR. PS (O/S) 3 . 4457 / /201 9 ((. .2011-12 ) ITA NO.4457/MUM/2019 (A.Y.2011-12) COPY OF THE ORDER FORWARDED TO : 1. * / THE APPELLANT , 2. +, / THE RESPONDENT. 3. 4, ( )/ THE CIT(A)- 4. 4, CIT 5. 56+,( , . . . , / DR, ITAT, MUMBAI 6. 6789 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI