ITO 32(2)(3), Mumbai V. M/S MAHADEV STEEL HOUSE, Palghar

ITA 4756/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9000 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Assessee Lawyers: K AGARWAL
• Keywords: Bogus purchase
• Section: 133(6); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NOS.4756 & 4757/M/2019 ASSESSMENT YEARS: 2010-11 & 2011-12 INCOME TAX OFFICER- 32(2)(3), ROOM NO.717, 7 TH FLOOR, KAUTILYA BHAVAN, C 41-43, G BLOCK, BKC, BANDRA (EAST), MUMBAI - 400051 VS. M/S. MAHADEV STEEL HOUSE, SHOP NO.10, K-3/2, SHIVAM APARTMENTS, OSTWAL EMPIRE, BOISAR, PALGHAR, THANE, MAHARASHTRA - 401501 PAN: AAOFM 6075F (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI K. AGARWAL, A.R. REVENUE BY : SMT. SMITA VERMA, D.R. DATE OF HEARING : 27.01.2021 DATE OF PRONOUNCEMENT : 01.02.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 09.04.2019 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2010-11 & 2011-12. ITA NO.4756/M/2019 (A.Y. 2010-11) 2. THE REVENUE HAS CHALLENGED THE ORDER OF LD. CIT(A) WHEREIN THE LD. CIT(A) HAS PARTLY SUSTAINED THE ADDITION @ 12.5% OF THE BOGUS PURCHASES AS AGAINST THE 22% MADE BY THE AO ON ACCOUNT OF BOGUS PURCHASES. ITA NOS.4756 & 4757/M/2019 M/S. MAHADEV STEEL HOUSE 2 3. THE BRIEF FACTS OF THE CASE ARE THAT ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT TO THE EFFECT THAT ASSESSEE HAS TAKEN HAWALA BOGUS PURCHASE ENTRIES TO THE TUNE OF RS. 1,78,088/-, THE RE-ASSESSMENT PROCEEDINGS WERE INITIATED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT DATED 19.03.2015 BY THE AO. ACCORDINGLY THE ASSESSEE WAS CALLED UPON TO PROVE THE GENUINENESS OF THE PURCHASES BY FURNISHING THE EVIDENCES IN SUPPORT OF THE BOGUS PURCHASES. THE ASSESSEE DID NOT FILE ANY DETAILS BEFORE THE AO EXCEPT THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. THE AO ALSO ISSUE NOTICES UNDER SECTION 133(6) OF THE ACT TO ALL THE SUPPLIERS HOWEVER THE SAME WERE RETURNED UNSERVED. FINALLY THE AO AFTER REJECTING THE CONTENTIONS OF THE ASSESSEE TREATED THE PURCHASES AS NOT GENUINE AND APPLIED A GP RATE OF 22% ON THE BOGUS PURCHASES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT FRAMED UNDER SECTION 144 R.W.S. 147 OF THE ACT. 4. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) AGAINST THE EX-PARTE ASSESSMENT. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DIRECTED THE AO TO APPLY A GP RATE OF 12.50% ON THE BOGUS PURCHASES BY OBSERVING THAT IN ASSESSEES OWN CASE A RATE 12.50% HAS BEEN ACCEPTED BY THE AO HIMSELF UNDER SIMILAR FACTS. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE LD. CIT(A) HAS RECORDED A FINDINGS THAT IN THE EARLIER ASSESSMENT YEAR AY 2012-13 THE REVENUE HAS ACCEPTED 12.50% AND DIRECTED THE AO TO APPLY SIMILAR PERCENTAGE TO ASSESS THE BOGUS PURCHASES. IN VIEW OF THESE FACTS ITA NOS.4756 & 4757/M/2019 M/S. MAHADEV STEEL HOUSE 3 AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ORDER OF LD CIT(A) IS QUITE REASONED AND DOES NOT REQUIRE OUR INTERFERENCE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO.4757/M/2019 A.Y. 2011-12 6. THE ISSUE INVOLVED IN THE PRESENT APPEAL IS IDENTICAL TO THE ONE AS STATED ABOVE IN ITA NO.4756/M/2019 A.Y. 2010-11. THEREFORE, OUR FINDING IN ITA NO.4756/M/2019 A.Y. 2010-11, WOULD, MUTATIS MUTANDIS, APPLY TO THIS APPEAL AS WELL. ACCORDINGLY THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.02.2021. SD/- SD/- ( PAVAN KUMAR GADALE) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 01.02.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.