ITO 20(2)(2), MUMBAI V. MOHAMMED RAZA H. MUKHI, MUMBAI

ITA 4828/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0698 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-08-2015
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: R B POPAT
• Keywords: Bogus purchase; Peak credit
• Section: 69C

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 4828 /MUM/ 2015 (ASSESSMENT YEAR 20 11 - 12 ) ITO 20(2)(2) ROOM NO. 212 PIRAMAL CHAMBERS LALBAUG, MUMBAI 400 012. VS. MOHAMMED RAZA H. MUKHI 22A, MAULANA AZAD ROAD KHARWA GALLI MUMBAI - 400 008. ( APPELLANT ) ( RESPONDENT ) PAN NO . AOEPM7208L ASSESSEE BY SHRI R.B. POPAT DEPARTMENT BY S HRI M.C. OMI NINGSHEN DATE OF HEARING 22.5 . 201 7 DATE OF PRONOUNCEMENT 22. 5 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 1.6.2015 PASSED BY THE LEARNED CIT(A) - 32, MUMBAI AND IT RELATES TO A.Y. 2011 - 12. THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN RESTRIC TING THE ADDITION RELATING TO BOGUS PURCHASES MADE BY THE ASSESSING OFFICER. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF IRON AND STEEL BEAMS, ANGLES, CHANNELS ETC. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED PURCHASE OF 21.11 CRORES. THE ASSESSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE HAS PURCHASED GOODS FROM CERTAIN DEALERS WHO HAVE BEEN CATEGORISED AS HAWALA DEALERS BY THE SALES TAX DEPARTMENT I.E. THOSE DEALERS HAVE PROVIDED O NLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING GOODS. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PURCHASED GOODS FOR AN AGGREGATE AMOUNT OF ` MOHAMMED RAZA H.MUKHI 2 5.37 CRORES FROM THE ABOVE SAID PARTIES. ACCORDINGLY THE ASSESSING OFFICER DISPUTED THE CLAIM OF PURC HASE AND PROCEEDED TO ASSESS THE PEAK CREDIT OF THE PURCHASES AMOUNTING TO ` 51,69,996 AS INCOME OF THE ASSESSEE U/S. 69C OF THE ACT. THE LEARNED CIT(A) NOTICED THAT THE ASSESSING OFFICER HAS ASSESSED 3% OF THE PURCHASES IN A.Y. 2007 - 08 AND ACCORDINGLY DIR ECTED THE ASSESSING OFFICER TO COMPUTE ADDITION AT 3% OF THE ALLEGED PURCHASES, WHICH WORKED OUT TO ` 16,11,916/ - . THUS THE LEARNED CIT(A) GAVE RELIEF OF ` 35,58,080/ - . AGGRIEVED THE REVENUE HAS FILED THIS APPEAL BEFORE US. 3. WE HAVE HEARD THE PARTIES AN D PERUSED THE RECORD. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN PLACING RELIANCE ON THE ASSESSMENT ORDER PASSED FOR A.Y. 2007 - 08 SINCE THE QUESTION OF PURCHASE FROM HAWALA DEALERS DO ES NOT ARISE IN THAT YEAR. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER WAS CONSIDERATE ENOUGH TO ASSESS THE P EAK CREDIT INSTEAD OF DISALLOWING ENTIRE PURCHASES. ACCORDINGLY, HE SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOULD BE RESTORED. 4. ON THE CON TRARY LEARNED AR SUBMITTED THAT THE ASSESSING OFFICER HIMSELF HAS MADE ADDITION OF 3% ON THE ALLEGED BOGUS PURCHASES IN THE IMMEDIATELY PRECEDING A.Y. 2010 - 11, WHEREIN ALSO A QUERY WAS RAISED WITH REGARD TO THE ALLEGED BOGUS PURCHASES ON THE BASIS OF INFOR MATION RECEIVED FROM THE SALES TAX DEPARTMENT. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER DID NOT PROVIDE OPPORTUNITY TO CROSS EXAMINE THE SUPPLIERS EVEN THOUGH THE ASSESSEE HAD REQUESTED FOR THE SAME. HE FURTHER SUBMITTED THAT THE GROSS PROFIT RATIO DISCLOSED BY THE ASSESSEE OVER THE YEARS WERE CONSISTENT. HE ALSO SUBMITTED THAT THE ASSESSEE, AS TRADER OF GOODS COULD NOT HAVE SOLD GOODS WITHOUT MAKING ACTUAL PURCHASES. ACCORDINGLY, HE SUBMITTED THAT THE LEARNED CIT(A) SHOULD HAVE DELETED THE ENTIRE AD DITION. HE SUBMITTED THAT THE ADDITION OF 3% OF THE PURCHASES IS REASONABLE AND ACCORDINGLY PRAYED THAT THE ORDER PASSED BY THE LEARNED CIT(A) BE SUSTAINED. MOHAMMED RAZA H.MUKHI 3 5. HAVING HEARD THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THERE IS NO REASON TO INTE RFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A) SINCE THE ASSESSING OFFICER HIMSELF HAS ASSESSED 3% OF THE VALUE OF ALLEGED BOGUS PURCHASES IN A.Y. 2010 - 11. FURTHER THE ASSESSING OFFICER HAS SIMPLY RELIED UPON THE INFORMATION RECEIVED FROM THE SALES TA X DEPARTMENT AND HE DID NOT MAKE ANY INDEPENDENT INQUIRY. OPPORTUNITY FOR CROSS EXAMINING THE SUPPLIERS WAS ALSO NOT PROVIDED, HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) IN CONFIRMING THE ADDITION OF 3% OF THE ALLEGED BOG US PURCHASES. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 22. 5 . 201 7. SD/ - SD/ - (AMARJIT SINGH ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 22 / 5 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI