ITO 27(1)(5), Mumbai V. SHRI. JATIN VASANT MADANI, Mumbai

ITA 4458/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4949 (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: 2009-2010
• Appeal Filed On: 01-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase; Unexplained expenditure
• Section: 69C; 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 4458 / /201 9 ((. . 2009-10. ) ITA NO.4458/MUM/2019 (A.Y.2009-10) ITO-27(1)(5), ROOM NO.410, 4 TH FLOOR, RLY STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 ...... * / APPELLANT ( VS. SHRI JATIN VASANT MADANI, PROPRIETOR HINDUSTAN ALLOYS & TUBE INDUSTRIES, C-302, NILKANTH NAGAR,L.B.S. MARG, GHATKOPAR (W), MUMBAI 400 086 PAN: AGKPM 3623P ..... +,/ 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 30/04/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ASSESSEE HAD INDULGED IN OBTAINING BOGUS PURCHASE B ILLS AGGREGATING TO 2 . 4458 / /201 9 ((. .2009-10. ) ITA NO.4458/MUM/2019 (A.Y.2009-10) RS.29,89,160/- FROM HAWALA DEALERS. DURING ASSESSM ENT PROCEEDINGS NOTICE UNDER SECTION. 133(6) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) WERE ISSUED TO THE DEALERS, THE SAME WERE RETURNED BACK UNSERVED EXCEPT NOTICE ISSUED TO ONE PARTY. HOWEVER, NO CONFIRMATIONS WERE FURNISHED BY THE SAID PARTY. THE ASSESSEE FAILED TO PROVE GENUINENESS OF PURCHASES AND THE DEALERS. THE ASSESSING OFFICER MADE ADDITION OF THE PEAK HAW ALA PURCHASES I.E. RS.18,47,147/- AS UNEXPLAINED EXPENDITURE UNDER SE CTION 69C OF THE ACT. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE ADDITION TO 12.5% MINUS GP DECLARED. THE LD.DEPARTMENTAL REPRESENTATIVE SU BMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF BOGUS P URCHASES WAS FAIR AND SHOULD HAVE BEEN SUSTAINED BY THE CIT(A). THE LD. D EPARTMENTAL REPRESENTATIVE PRAYED FOR REVERSING THE FINDINGS OF CIT(A) AND RESTORING THE ADDITION MADE IN ASSESSMENT PROCEEDINGS. 3. THE SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESE NTATIVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE IS A DE ALER OF FERROUS AND NON- FERROUS METALS. THE ASSESSEE HAS ALLEGEDLY MADE BOG US PURCHASES AGGREGATING TO RS.29,89,160/- FROM THREE DEALERS DECLARED AS HA WALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. UNDISPUT EDLY, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURCHASES AND THE AUTHENTICITY OF THE DEALERS. THE ASSESSING OFFICER MADE ADDITION OF RS.18,47,147/- IN RESPECT OF BOGUS PURCHASES BY TAK ING PEAK OF SUCH PURCHASES. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS PRAMASHAKTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL 413 OF 2017 DECIDED ON 15/7/2019 HAS HELD THAT ONLY PROFIT ELEMENT EMBEDDED IN BOGUS PURCHASES CAN BE TAXED. THE CIT(A) 3 . 4458 / /201 9 ((. .2009-10. ) ITA NO.4458/MUM/2019 (A.Y.2009-10) ESTIMATED G.P. AT 12.5% OF THE BOGUS PURCHASES AND RESTRICTED THE ADDITION TO RS.3,73,645/-. THE SAME HAS BEEN ACCEPTED BY THE AS SESSEE. THE ADDITION MADE BY ASSESSING OFFICER IN RESPECT OF BOGUS PURCH ASES WAS ON THE HIGHER SIDE AND CONTRARY TO THE LAW LAID DOWN BY THE HON'B LE JURISDICTIONAL HIGH COURT. I FIND NO MERIT IN APPEAL BY THE REVENUE, HENCE, TH E IMPUGNED ORDER IS UPHELD AND THE APPEAL BY REVENUE IS DISMISSED, SANS MERIT. 4. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. 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) 4 . 4458 / /201 9 ((. .2009-10. ) ITA NO.4458/MUM/2019 (A.Y.2009-10) 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