ASSISTANT COMMISSIONER OF INCOME TAX-17(3), MUMBAI V. M/S. STG INFRASTRUCTURE, MUMBAI

ITA 5150/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0175 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 06-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Tax effect
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! ,'# '$ BEFORE VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 5150/ / 2019 (. . 2011-12 ) ITA NO.5150/MUM/2019(A.Y.2011-12) THE ACIT-17(3), ROOM NO.137, 1 ST FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ...... ) / APPELLANT VS. M/S. STG INFRASTRUCTURE, 1 ST FLOOR, BHARAT HOUSE, 104, MUMBAI SAMACHAR MARG, MUMBAI 400 023 PAN: AAAFV3045L ..... !*/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SANJAY J. SETHI +* / DATE OF HEARING : 01/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 08/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-28, MUMBAI ( IN SHORT THE CIT(A)) DATED 30/05/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A PARTNERSHIP FIRM. ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, 2 . 5150/ / 2019 (. . 2011-12 ) ITA NO.5150/MUM/2019(A.Y.2011-12) GOVERNMENT OF MAHARASHTRA, BY THE DGIT(INVESTIGATI ON), MUMBAI, THE ASSESSMENT FOR ASSESSMENT YEAR 2011-12 IN THE CASE OF ASSESSEE WAS REOPENED. AS PER INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED BOG US PURCHASE BILLS AGGREGATING TO RS.4,65,993/- FROM HAWALA DEALERS. THE ASSESSING OFFICER AFTER COMING TO THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO PROVE GE NUINENESS OF THE PURCHASES AND ALSO THE SUPPLIERS OF THE GOODS MADE ADDITION OF TH E ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 14/12/2018 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE FACTS AND CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, RESTRICTED THE ADDITI ON TO 12.5% OF THE BOGUS PURCHASES. NOW, THE REVENUE IS IN APPEAL ASSAILING THE FINDINGS OF CIT(A) IN REDUCING THE ADDITION FROM RS.4,65,993/- TO RS.58,250/- I.E. 12.5% OF THE TOTAL BOGUS PURCHASES. 3. SHRI SANJAY J. SETHI, REPRESENTING THE DEPARTMEN T SUBMITTED THAT THE ASSESSEE FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE PURCHASES. NEITHER ANY DOCUMENTARY EVIDENCE WAS FILED TO SHOW TRAIL OF GOO DS NOR THE DEALERS FROM WHOM ALLEGED PURCHASES WERE MADE, WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE LD. DEPARTMENTAL REPRESENTATIVE PRAYED FOR REVERSING TH E FINDINGS OF CIT(A) AND UPHOLDING THE ASSESSMENT ORDER. THE LD. DEPARTMENT AL REPRESENTATIVE FURTHER CONTENDED THAT THOUGH THE TAX EFFECT INVOLVED IN TH E APPEAL IS LESS THAN THE MONETARY LIMIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/20 19, DATED 08-08-2019, BUT THE CASE OF ASSESSEE FALLS UNDER EXCEPTIONS SPECIFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPART MENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. T HE REVENUE IN APPEAL HAS ASSAILED THE ORDER OF CIT(A) IN RESTRICTING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO 12.5% OF SUCH PURCHASES AS AGAINST 100% ADDITION MADE BY ASSESSING OFFICER. 3 . 5150/ / 2019 (. . 2011-12 ) ITA NO.5150/MUM/2019(A.Y.2011-12) UNDISPUTEDLY, THE REVENUE HAD ACCEPTED THE SALES TU RNOVER DECLARED BY THE ASSESSEE. WITHOUT PURCHASES THERE CANNOT BE SALES. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. PARAMSHAKHTI DISTRIBUTORS P VT. LTD. IN INCOME TAX APPEAL NO.413 OF 2017 DECIDED ON 15/07/2019 HAS HELD THAT IT IS ONLY THE PROFIT EMBEDDED IN BOGUS PURCHASES THAT HAS TO BE TAXED AND NOT THE ENTIRE PURCHASES. WE FIND THAT THE ESTIMATION OF GP AT 12.5% ON ALLEGED BOGUS PURC HASES BY THE CIT(A) IS IN LINE WITH THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT(S UPRA). WE FIND NO INFIRMITY IN THE IMPUGNED ORDER. THE SAME IS UPHELD AND APPEAL BY TH E REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 5. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 8 TH DAY OF MARCH, 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 08/03/2021 VM , SR. PS (O/S) !*12'.* COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. !* / THE RESPONDENT. 3. 3* ( )/ THE CIT(A)- 4. 3* CIT 5. 45!* , . . . , / DR, ITAT, MUMBAI 6. 56789 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI