ITO 6 (3)(1), MUMBAI V. M/S IFHS STEELS PVT LTD., MUMBAI

ITA 476/MUM/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9397 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 19-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 147; 143(3); 133(6)

Judgement Text

आयकर अपीलीय अिधकरण मुंबई पीठ “एस एम सी” , मुंबई Įी ǒवकास अवèथी, Ûयाियक सदèय IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं. 476/मुं/2020 (िन.व.2011-12) ITA NO.476/MUM/2020 (A.Y.2011-12) ITO-6(3)(1), 5 th Floor, Room No. 503, Aayakar Bhavan, M.K. Road, Mumbai-400020. ...... अपीलाथȸ /Appellant बनाम Vs. M/s IFHS Steels Pvt. Ltd. Room No. 4, 1 st Floor, 193, Nagdevi Street, Mumbai-400003. PAN: AAACI4775M ..... Ĥितवादȣ/Respondent अपीलाथȸ Ʈारा/ Appellant by : Sh. Sanjay J. Sethi Ĥितवादȣ Ʈारा/Respondent by : None सुनवाई कȧ ितिथ/ Date of hearing : 30/06/2021 घोषणा कȧ ितिथ/ Date of pronouncement : 23/09/2021 आदेश/ ORDER PER VIKAS AWASTHY, J.M: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-12, Mumbai [hereinafter referred to as ‘the CIT(A)’] ' dated 22.10.2019 for the Assessment Year (AY) 2011-12. 2. The brief facts of the case as emanating from records are: The assessee is trading in fasteners. On the basis of information received from the Sales Tax 2 आअसं. 476/मुं/2020 (िन.व.2011-12) ITA No. 476/Mum/2020 (A.Y. 2011-12) Department, Government of Maharashtra, assessment for AY 2011-12 in the case of assessee was re-opened. As per the information received, the assessee obtained bogus purchase bills aggregating to Rs. 14,92,892/- from various (twelve) dealers, declared as hawala operators by the Sales Tax Department. During assessment proceedings, the Assessing Officer (AO) issued notice under section 133(6) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] to the dealers from whom the assessee had allegedly made purchases. The said notices were received back unserved from the postal authorities with remarks “Left or Not Known”. No confirmations from the vendors were filed by the assessee, no documentary evidence to substantiate trail of goods was furnished by the assessee. The AO made addition of the entire bogus purchases. Aggrieved by the assessment order dated 27.01.2016 passed under section 143(3) read with section 147 of the Act, the assessee filed appeal before the CIT(A). The CIT(A) after examining facts of the case and documents on record restricted the disallowance on bogus purchases to 12.5%. Now, the Revenue is in appeal against the relief granted by the CIT(A). 3. Sh. Sanjay J. Sethi representing the Department vehemently defended the assessment order and prayed for reversing the findings of CIT(A) in so far as granting partial relief to the assessee. 4. Submissions made by ld. Departmental Representative (DR) heard, orders of the authorities below examined. Undisputedly, the assessee failed to discharge its onus in proving genuineness of the purchases and the dealers. At the same time, it is observed that the sales declared by the assessee has not 3 आअसं. 476/मुं/2020 (िन.व.2011-12) ITA No. 476/Mum/2020 (A.Y. 2011-12) been disputed by the AO. Without purchase there cannot be sales, hence, entire alleged bogus purchases cannot be disallowed. It is only the suppressed profit margin in such transactions that can be brought to tax (Re: PCIT vs. Paramshakti Distributors Pvt. Ltd. in Income Tax Appeal No. 413 of 2017 decided on 15.07.2019). The CIT(A) after examining the facts of the case has restricted the disallowance on bogus purchases to Rs. 1,86,612/- by estimating suppressed profit margin at 12.5%. I find no infirmity in the impugned order, hence, the same is upheld and appeal of the Revenue is dismissed, sans merit. Order pronounced in the open court on Thursday, the 23 rd day of September, 2021. Sd/- (VIKAS AWASTHY) Ûयाियक सदèय / JUDICIAL MEMBER मुंबई/Mumbai, Ǒदनांक/Dated: 23/09/2021 SK, PS Ĥितिलǒप अĒेǒषतCopy of the Order forwarded to : 1. अपीलाथȸ/The Appellant , 2. Ĥितवादȣ/ The Respondent. 3. आयकर आयुƠ(अ)/ The CIT(A)- 4. आयकर आयुƠ CIT 5. ǒवभागीय Ĥितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाड[ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai