ITO-20(2)(1), MUMBAI V. MUKESH TIKAMCHAND JAIN, MUMBAI

ITA 5213/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8895 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! ,'# '$ BEFORE VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 5213/ / 2019 (. . 2009-10 ) ITA NO.5213/MUM/2019(A.Y.2009-10) ITO -20(2)(1), ROOM NO.216, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI 400 012 ...... ) / APPELLANT VS. MUKESH TIKAMCHAND JAIN, B/802, PRATIKSHA TOWER, R.B. NIMKAR MARG, MUMBAI CENTRAL, MUMBAI 400 008 PAN:AAIPJ0037E ..... !*/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SANJAY J. SETHI +* / DATE OF HEARING : 04/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 08/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI (IN SHORT THE CIT( A)) DATED 31/05/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM T HE RECORDS ARE: THE ASSESSEE IS A DEALER IN FERROUS AND NON-FERROUS METALS. THE AS SESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 WAS REOPENED ON THE BAS IS OF INFORMATION RECEIVED BY 2 . 5213/ / 2019 (. . 2009-10 ) ITA NO.5213/MUM/2019(A.Y.2009-10) THE DGIT (INV), MUMBAI FROM SALE TAX DEPARTMENT, G OVERNMENT OF MAHARASHTRA, THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE ENTRI ES AGGREGATING TO RS.82,73,833/- FROM TWO HAWALA OPERATORS. SINCE, THE ASSESSEE FAI LED TO SUBSTANTIATE GENUINENESS OF THE PURCHASES AND THE SUPPLIERS, THE ASSESSING O FFICER FOLLOWING THE DECISION IN THE CASE OF SIMIT P. SHETH, 356 ITR 451(GUJ) MADE AN E STIMATED ADDITION OF 12.5% OF TOTAL BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 30/03/2015, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A ) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE G.P DECLARED BY ASSESSEE, M ODIFIED THE ASSESSMENT ORDER AND RESTRICTED THE ADDITION TO 5% OF THE BOGUS PUR CHASES. AGAINST THE FINDINGS OF CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 3. SHRI SANJAY J. SETHI, REPRESENTING THE DEPART MENT VEHEMENTLY SUPPORTING THE ASSESSMENT ORDER SUBMITTED THAT ASSESSING OFFICER H AD ESTIMATED G.P AT 12.5% ON BOGUS PURCHASES IN LINE WITH THE DECISION OF HON'BL E GUJARAT HIGH COURT IN THE CASE OF SIMIT P. SHETH (SUPRA). THE CIT(A) HAS FURTHER RE DUCED THE G.P RATE ON BOGUS PURCHASES TO 5% WHICH IS VERY MUCH ON THE LOWER SI DE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FAIL ED TO DISCHARGE HIS ONUS IN PROVING THE GENUINENESS OF PURCHASES AND HENCE, DE SERVES NO LENIENCY. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER CONTENDED THAT THOUGH THE TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN THE MONETARY LIMIT SP ECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019, BUT THE CASE OF ASSES SEE FALLS UNDER EXCEPTIONS SPECIFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 20 18 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . 4. THE NOTICE OF HEARING OF APPEAL FOR TODAY WAS SENT TO THE ASSESSEE THROUGH RPAD. THE NOTICE HAS BEEN DULY SERVED AS IS EVIDEN T FROM THE ACKNOWLEDGMENT CARD PLACED ON THE FILE. DESPITE SERVICE OF NOTICE, NE ITHER THE ASSESSEE NOR ANY 3 . 5213/ / 2019 (. . 2009-10 ) ITA NO.5213/MUM/2019(A.Y.2009-10) AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS APPE ARED. IT SEEMS, THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL. HENCE, THIS APPEAL IS TAKEN UP FOR HEARING WITH THE ASSISTANCE OF LD. DEPARTMENTAL REPRESENTATIVE AND MATERIAL AVAILABLE ON RECORD. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPART MENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. UND ISPUTEDLY , THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS FROM SU SPICIOUS DEALERS. SINCE, THE REVENUE HAS ACCEPTED THE TURNOVER DECLARED BY THE A SSESSEE, THE ASSESSING OFFICER HAS ESTIMATED THE PROFIT EMBEDDED IN BOGUS PURCHASE TRANSACTIONS. THE ASSESSING OFFICER HAS ESTIMATED PROFIT @ 12.5%. THE CIT(A) CONSIDERING THE NATURE OF ASSESSEES BUSINESS HAS REDUCED THE ADDITION TO 5% OF BOGUS PURCHASES. IN TRADING OF FERROUS AND NON-FERROUS METALS, AVERAGE G.P IS BETWEEN 5.0% TO 7.5%. AS PER AUDIT REPORT THE ASSESSEE HAS DECLARED G.P OF 5.25% . WE FIND THAT THE ORDER OF CIT(A) IS FAIR AND REASONABLE, HENCE, WARRANTS NO INTERFER ENCE. THE APPEAL OF THE REVENUE IS WITHOUT ANY MERIT, ERGO, THE SAME IS DISMISSED AND THE IMPUGNED ORDER IS UPHELD. 6. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY TH E 08 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) 4 . 5213/ / 2019 (. . 2009-10 ) ITA NO.5213/MUM/2019(A.Y.2009-10) !*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