R K COLOR DIAMOND PVT LTD., Mumbai V. ITO 5(3)(1), Mumbai

ITA 4998/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0783 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 31-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Accommodation entries
• Section: 132

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 4998 / / 2019 (%. 2014-15 ) ITA NO.4998/MUM/2019(A.Y 2014-15 ) R.K.COLOR DIAMONDS PVT. LTD., 1303, PANCHRATNA,MAMA PARMANAND MARG, OPERA HOUSE, MUMBAI 400 004 PAN: AAACL-8489-K ...... ' / APPELLANT % VS. INCOME TAX OFFICER-5(3)(1) ROOM NO.526, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ..... ()/ RESPONDENT '*/ APPELLANT BY : NONE ()*/ RESPONDENT BY : MS. SMITA VERMA %+) / DATE OF HEARING : 07/04/2021 ,-. +) / DATE OF PRONOUNCEMENT : 02/07/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-10, MUMBAI [IN SHORT 'THE CI T(A)] DATED 10/05/2019 FOR THE ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IN APPEAL HAS ASSAILED ADDITION OF RS.1,90,247/- CONFIRMED BY THE CIT(A) IN RESPECT OF PURCHASES MADE FROM M/ S. PRIME STAR BY ESTIMATING G.P RATE AT 8% ON SUCH PURCHASES. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS A TRADER IN DIAMONDS. DURING THE COURSE OF SCRU TINY PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS TA KEN ACCOMMODATION ENTRIES 2 ITA NO.4998/MUM/2019(A.Y 2014-15) FROM M/S. PRIME STAR A FIRM BELONG TO BHANWARLAL J AIN & GROUP. THE ASSESSING OFFICER ESTIMATED PROFIT MARGIN OF 8% ON BOGUS PURC HASES AND MADE ADDITION OF RS.1,90,247/-. AGAINST THE ASSESSMENT ORDER DAT ED 28/07/2016 THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) REJECTE D THE CONTENTIONS OF ASSESSEE AND CONFIRMED THE ADDITION MADE BY ASSESSING OFFICE R. HENCE, THE PRESENT APPEAL BY ASSESSEE. 4. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES OF ACCOMMODATI ON ENTRIES PROVIDED BY BHANWARLAL JAIN AND HIS ASSOCIATED CONCERNS FLOATED FOR THE SOLE PURPOSE OF PROVIDING ACCOMMODATION ENTRIES. DURING SEARCH A CTION UNDER SECTION 132 OF INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') IN THE CA SE OF BHANWARLAL JAIN GROUP, BHANWARLAL JAIN ADMITTED THAT THROUGH VARI OUS CONCERNS FLOATED THEY ARE PROVIDING ACCOMMODATION ENTRIES AGAINST COMMIS SION AND THERE IS NO ACTUAL SALE. THE ASSESSING OFFICER MADE ESTIMATED ADDITION OF 8% OF THE ALLEGED BOGUS PURCHASES. THE ESTIMATE MADE BY ASSES SING OFFICER IS FAIR AND REASONABLE, THEREFORE, THE SAME HAS BEEN UPHELD BY THE CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED TH E IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. 5. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAS ALLEG EDLY OBTAINED BOGUS PURCHASE BILLS FROM M/S. PRIME STAR A FIRM BELONGI NG TO BHANWARLAL JAIN GROUP. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHA RGE ITS ONUS IN CONCLUSIVELY PROVING GENUINENESS OF ALLEGED BOGUS PURCHASES. H OWEVER, AT THE SAME TIME THE ASSESSING OFFICER HAS ACCEPTED THE SALES TURNOV ER DECLARED BY THE ASSESSEE. THE ASSESSING OFFICER ESTIMATED PROFIT MARGIN ON S UCH PURCHASES AT 8% AND THE CIT(A) HAS UPHELD THE SAME. TAKING INTO CONSID ERATION THE NATURE OF 3 ITA NO.4998/MUM/2019(A.Y 2014-15) ASSESSEES BUSINESS, I AM OF THE VIEW THAT PROFIT MARGIN ESTIMATED BY THE AUTHORITIES BELOW ARE ON HIGHER SIDE. I DEEM IT APP ROPRIATE TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO DECIDED TH E SAME AFRESH IN LINE WITH THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F PCIT VS. MOHOMMAD HAJI ADAM & CO. IN INCOME TAX APPEAL NO.1004 OF 2016 DEC IDED ON 11/02/2019. NEEDLESS TO SAY THAT THE ASSESSING OFFICER SHALL GR ANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE RE-ADJUDICATING THE ISSUE IN ACCORDANCE WITH LAW. 6. IN THE RESULT, APPEAL BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, T HE 2 ND DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED 02/07/2021 VM , SR. PS (O/S) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23()% , . . . , / DR, ITAT, MUMBAI 6. 34567 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI