ITO 11(1)(1), Mumbai V. M/S RAHUL GRAPHITES LTD., Mumbai

ITA 4531/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4959 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-07-2019
• 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 . 4531 / /201 9 ((. . 2011-12 ) ITA NO.4531/MUM/2019 (A.Y.2011-12) ITO-11(1)(1), ROOM NO.201, 2 ND FLOOR, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI 400 020 ...... * / APPELLANT ( VS. M/S. RAHUL GRAPHITES LTD, 36, GROUND FLOOR SAGAR PALLAZIO, OPP. SUDERSHAN HOTEL, ANDHERI KURLA ROAD, SAKINAKA, MUMBAI 400 072 PAN: AAECR 2837F ..... +,/ RESPONDENT *-/ APPELLANT BY : SHRI SANJAY J. SETHI +,-/ RESPONDENT BY : NONE (., / DATE OF HEARING : 06/01/2021 /01 ., / DATE OF PRONOUNCEMENT : 05/04/2021 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-18, MUMBAI [IN SHORT THE CIT( A)] DATED 26/04/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMEN T SUBMITTED THAT DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL, TH E ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.10,95,931/- FROM M/S . SHRUTI TRADERS A DECLARED HAWALA OPERATOR BY THE SALES TAX DEPARTMENT, GOVERN MENT OF MAHARASHTRA. DURING 2 . 4531 / / 2019 ((. .2011-12 ) ITA NO.4531/MUM/2019 (A.Y.2011-12) ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO PROV E GENUINENESS OF PURCHASES AND THE DEALER. EVEN THE NOTICE SENT TO DEALER U/S. 133 (6) OF THE ACT BY THE ASSESSING OFFER WAS RETURNED BACK UNSERVED. THUS, THE ASSESSI NG OFFICER MADE ADDITION OF THE ENTIRE BOGUS PURCHASES. THE ASSESSEE FILED APPEAL A GAINST ASSESSMENT ORDER DATED 19/09/2016 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 12.5% OF BOGUS PURCHASES. THE LD. DEPARTMENTAL REPRESENTATIVE PRAYED FOR REVERSIN G 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 ENG AGED IN MANUFACTURING OF GRAPHITE ELECTRODES AND OTHER GRAPHITE PRODUCTS. D URING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE ALLEGEDLY OBTAINED BOGUS PURCHASE BILLS TO THE TUNE OF RS.10,95,931/-. UNDISPUTEDLY, THE A SSESSEE FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF PURCHASES AND AUTHEN TICITY OF THE DEALER. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE PCIT VS PRAMASHAKTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL 413 OF 2017 DECIDED ON 15/7/2019 HAS HELD THAT ONLY PROFIT EMBEDDED IN BOGUS PURCHASES CAN BE TAXED. THE ENTIR E ALLEGED BOGUS PURCHASES CANNOT BE ADDED. I FIND NO ERROR IN ESTIMATION OF P ROFIT AT 12.5% BY THE 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 MONDAY, THE 05 TH DAY OF APRIL, 2021. SD./- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3(/ DATED: 05/04/2021 VM , SR. PS (O/S) 3 . 4531 / / 2019 ((. .2011-12 ) ITA NO.4531/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