MANOJ BOKADIA , Mumbai V. ITO 19(2)(3), Mumbai

ITA 4511/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2138 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase; Initiation of penalty proceedings
• Section: 271(1)(c)

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 4511 / / 2019 (%. 2011-12 ) ITA NO.4511/MUM/2019(A.Y 2011-12 ) MANOJ BOKADIA, M/S. SHARON FITTING IMPEX, PAWAPURI BUILDING, 9 TH KHETWADI LANE, NEAR JAIN TEMPLE, MUMBAI 400 004. PAN: ALRPB-8253-A ...... ' / APPELLANT % VS. INCOME TAX OFFICER-19(2)(3), MATRU MANDIR BLDG., ROOM NO.221, 2 ND FLOR, TARDEO, MUMBAI 400 007 ..... ()/ RESPONDENT '*/ APPELLANT BY : NONE ()*/ RESPONDENT BY : MS. SMITA VERMA %+) / DATE OF HEARING : 07/04/2021 ,-. +) / DATE OF PRONOUNCEMENT : 25/06/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST EX-PARTE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-30, MUMBAI [IN SHORT 'THE CIT(A)] DATED 20/05/2019 FOR THE ASSESSMENT YEAR 2011-12.. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON-FERROUS ME TALS. THE ASSESSMENT FOR ASSESSMENT YEAR 2011-12 IN THE CASE OF ASSESSEE WAS REOPENED FOR THE REASON THAT THE ASSESSEE HAD ALLEGEDLY OBTAINED BOGUS PURC HASE BILLS AMOUNTING TO RS.2,19,18,422/- FROM VARIOUS (5), DEALERS DECLARED AS HAWALA OPERATORS. 2 ITA NO.4511/MUM/2019(A.Y 2011-12) DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD N EITHER PRODUCE DEALERS NOR CONFIRMATIONS FROM THEM. FURTHER, THE ASSESSEE FAILED TO PROVE PHYSICAL DELIVERY OF THE GOODS. THE ASSESSING OFFICER AFTE R EXAMINING THE FACTS OF CASE AND DOCUMENTS ON RECORD CONCLUDED THAT ASSESSEE MAD E PURCHASES FROM GREY MARKET AND THEREAFTER OBTAINED BOGUS PURCHASE BILLS FROM ENTRY PROVIDERS. THE ASSESSING OFFICER REJECTED THE BOOKS OF ASSES SEE AND MADE ADDITION OF RS.13,96,763/- BY ESTIMATING MARGIN @ 12.5% ON BO GUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 18/10/2016 THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER ISSUING NOTICE UNDER SECTION. 251(1)(A) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) TO THE A SSESSEE ENHANCED ADDITION ON ACCOUNT OF BOGUS PURCHASES TO 100%. HENCE, THE PRESENT APPEAL BY THE ASSESSEE. 3. THE ASSESSEE IN APPEAL HAS INTER-ALIA ASSAILED REOPENING OF THE ASSESSMENT AS WELL AS ENHANCEMENT MADE BY CIT(A) IN EX-PARTE PROCEEDINGS.. 4. SUBMISSIONS MADE BY LD.DEPARTMENTAL REPRESENTATI VE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSE SSEE HAS FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURC HASES AND AUTHENTICITY OF THE DEALERS. AT THE SAME TIME IT IS OBSERVED THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE SALES AND STOCK STATEMENT DECLARED BY THE ASSESSEE. WITHOUT PURCHASES, THERE CANNOT BE SALES, HENCE ENTIRE BOGU S PURCHASES CANNOT BE ADDED. IT IS ONLY PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS THAT CAN BE BROUGHT TO TAX [ REF: PCIT VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD., INCOME TAX APPEAL NO.413 OF 2017 DECIDED ON 15 TH JULY, 2019] .GENERALLY, IN TRADING OF FERROUS A ND NON-FERROUS METALS, THE G.P RANGES BETWEEN 5% TO 8% . THE CIT(A) ERRED IN MAKING ADDITION OF ENTIRE ALLEGED BOGUS PURCHASES. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, I AM OF CONSIDERED VIEW THAT TO MEET THE E NDS OF JUSTICE ADDITION TO THE EXTENT 3 ITA NO.4511/MUM/2019(A.Y 2011-12) OF 8% OF ALLEGED BOGUS PURCHASES WOULD BE FAIR AND REASONABLE. THE GROUNDS NO.2 TO 8 OF APPEAL ARE PARTLY ALLOWED IN THE AFORESAID TERMS. 5. IN GROUND NO.1 OF APPEAL, THE ASSESSEE HAS ASS AILED RE-OPENING OF ASSESSMENT. SIMILAR GROUND WAS RAISED BY THE ASSES SEE BEFORE THE CIT(A). THERE IS NO CONTRARY MATERIAL BEFORE THE BENCH TO TAKE A DIFFERENT VIEW. ACCORDINGLY, GROUND NO.1 OF APPEAL IS DISMISSED. 6. IN GROUND NO.9 OF APPEAL, THE ASSESSEE HAS ASS AILED CHARGING OF INTEREST UNDER SECTION 234A, 234B, 234C AND 234D OF THE INCO ME TAX ACT, 1961( IN SHORT THE ACT). CHARGING OF INTEREST UNDER AFORE SAID SECTIONS IS CONSEQUENTIAL AND MANDATORY, THEREFORE, THIS GROUND OF APPEAL IS DISMISSED BEING DEVOID OF ANY MERIT. 7. IN GROUND NO.10 OF APPEAL, THE ASSESSEE HAS AS SAILED INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. CHALLENGE TO PENALTY PROCEEDINGS AT THIS STAGE IS PREMATURE, HENCE, GR OUND NO.10 OF THE APPEAL IS DISMISSED AS SUCH. 8. IN THE RESULT, APPEAL BY ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 25 TH DAY OF JUNE, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED 25/06/2021 VM , SR. PS (O/S) 4 ITA NO.4511/MUM/2019(A.Y 2011-12) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23()% , . . . , / DR, ITAT, MUMBAI 6. 34567 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI