JHAVERILAL BHANSALI, MUMBAI V. ITO 20(2)(1), MUMBAI

ITA 4578/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5899 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 23-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV K GUBGOTRA
• Keywords: Bogus purchase; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 4578 / MUM/20 1 7 ( ASSESSMENT YEAR : 2010 - 11 ) SHRI JHAVERILAL BHANSALI 1 ST FLOOR, ROOM NO.3, PANDYA HOUSE, 2 ND CARPENTER STREET S.V. RO AD, MUMBAI 400 004 VS. ITO 20(2)(1) 2 ND FLOOR, PIRAMAL CHAMBERS PAREL - 400 012 PAN/GIR NO. AFZPB2388G ( APPELLANT ) .. ( RESPONDENT ) ITA NO. 4885 /MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) ITO 20(2)(1) 2 ND FLOOR, PIRAMAL CHAMBERS PAREL - 400 012 VS. SHRI JHAVE RILAL BHANSALI 1 ST FLOOR, ROOM NO.3, PANDYA HOUSE, 2 ND CARPENTER STREET S.V. ROAD, MUMBAI 400 004 PAN/GIR NO. AFZPB2388G ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI SANJAY KAPADIA AN SHRI NAVEEN KUMAR MISHRA REVENUE BY SHRI RAJEEV K GUBGOTRA D ATE OF HEARING 30 / 11 /201 8 DATE OF PRONOUNCEMENT 16 / 1 2 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT(A) - 32, MUMBAI DATED 28/04/2017 FOR THE ITA NO. 4578/MUM/2017 & 4885/MUM/2017 SHRI JHAVERILAL BHANSALI 2 A.Y.2010 - 11 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 28/09/2010 DECLARING A TOTAL INCOME OF RS.830460/ - . THE ASSESSEE IS PROPRIETOR OF M/S. SUN IL METALS ( INDIA) WHICH IS ENGAGED IN THE B USINESS OF TRADING IN FERROUS AND NON - FERROUS METALS. THE AO RECEIVED INFORMATION FROM THE INVESTIGATION WING THAT THE ASSESSEE HAS ENTERED INTO BOGUS PURCHASE TRANSACTIONS WITH 11 PARTIES. THE ASSESSMENT WAS REOP ENED AFTER RECORDING REASONS FOR REOPENING AND NOTICE U/S.148 WAS ISSUED. DURING REASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICE U/S.142(1) TO THE ASSESSEE REQUIRING HIM TO PRODUCE DETAILS OF PURCHASES MADE FROM ALLEGED PARTIES. THE AO ALSO ISSUED NOTICE U /S.133(6) IN COMPLIANCE OF WHICH ASSESSEE PRODUCED COPIES OF INVOICES AND LEDGER ACCOUNT ALONGWITH THE PROOF OF PAYMENTS MADE TO THESE PARTIES THROUGH ACCOUNT PAYEE CHEQUES. AO DID NOT AGREE WITH ASSESSEES CONTENTION AND ADDED 12.5% OF ALLEGED PURCHASES I N ASSESSEES INCOME. 4. BY THE IMPUGNED ORDER, CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF 3.24%. AGAINST THE ORDER OF CIT(A) BOTH ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. ITA NO. 4578/MUM/2017 & 4885/MUM/2017 SHRI JHAVERILAL BHANSALI 3 6. FROM THE RECORD, WE FOUND THAT ASSESSEE IS A DEALER OF FERROUS AND NON - FERROUS METALS. DURING THE YEAR UNDER CONSIDERATION THE AO GOT INFORMATION FROM THE DGIT (INVESTIGATION) REGARDING ASSESSEE HAVING PURCHASED THE GOODS F ROM THE SUSPICION DEALERS. ACCORDINGLY, ASSESSMENT WAS REOPENED AND AO MADE ADDITION OF 12.5% OF SUCH PURCHASES WHICH WAS REDUCED BY THE CIT(A) AFTER CONSIDERING ASSESSEES CONTENTION TO THE EXTENT OF 3.24%. FROM THE RECORD, WE FOUND THAT BEFORE THE AO ASS ESSEE HAS FILED ALL THE DETAILS, CONFIRMATION FROM THE PARTIES, QUANTITATIVE STATEMENT OF PURCHASES AND SALES. THUS, CORRESPONDING SALES OF ALLEGED PURCHASES ARE NOT IN DISPUTE WHICH IS QUITE EVIDENT FROM THE QUANTITATIVE TALLY FILED BEFORE THE AO. WE ALSO FOUND THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS DECLARED GP RATE WHICH COMMENSURATE WITH THE G.P. RATE OF TRADERS ENGAGED IN TRADING OF FERROUS AND NON - FERROUS METALS. MAKING FURTHER ADDITION OF 3.24% WOULD BE EXCESSIVE. THEREFORE, C ONSIDERIN G THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE AO TO RESTRICT THE ADDITION TO THE EXTENT OF 1% OF THE ALLEGED PURCHASES TO COVER LOSS OF REVENUE IF ANY. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED WHEREAS APPEAL OF THE ASSESS EE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 / 12 /201 8 SD/ - ( AMARJIT SINGH ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 16 / 12 /201 8 ITA NO. 4578/MUM/2017 & 4885/MUM/2017 SHRI JHAVERILAL BHANSALI 4 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//