ITO-24(2)(2), MUMBAI V. M/S JANARDAN ENGINEERING INDUSTRIES, MUMBAI

ITA 5322/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8892 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 14-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Tax effect
• Section: 143(3); 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! ,'# '$ BEFORE VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 5322/ / 2019 (. . 2009-10 ) ITA NO.5322/MUM/2019(A.Y.2009-10) INCOME TAX OFFICER-24(2)(2), ROOM NO.514, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012 ...... ) / APPELLANT VS. M/S. JANARDAN ENGINEERING INDUSTRIES, GALA NO.2, NAND DHAM, RAM ROOP ESTATE, KONDIVITA ROAD, JB NAGAR ROAD, ANDHERI (E), MUMBAI 400 059 PAN:AAAFJ 4755F ..... !*/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SANJAY J. SETHI +* / DATE OF HEARING : 09/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 11/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 36, MUMBAI (IN SHORT THE CIT (A)) DATED 15/05/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMENT SU BMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FOUNDRY AND MACHINE SHOP. ON THE BASIS OF 2 . 5322/ / 2019 (. . 2009-10 ) ITA NO.5322/MUM/2019(A.Y.2009-10 INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT , GOVERNMENT OF MAHARASHTRA BY THE DGIT(INVESTIGATION), MUMBAI, ASSESSMENT FO R ASSESSMENT YEAR 2009-10 IN THE CASE OF ASSESSEE WAS REOPENED. AS PER THE INFORMA TION RECEIVED, THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS.3,70, 429/- FROM M/S. JAN KUSHAL METAL CORP. SINCE, THE ASSESSEE FAILED TO DISCHARG E ITS ONUS IN PROVING GENUINENESS OF THE PURCHASES AND THE SUPPLIER, THE ASSESSING OF FICER MADE ADDITION BY ESTIMATING PROFIT @ 24.8% ON THE BOGUS PURCHASES. AGGRIEVED B Y THE ASSESSMENT ORDER DATED 28/12/2015 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) REDUCED THE PROFIT TO 12.5% OF THE BOGUS PURCHASES. THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT SINCE, THE ASSESSEE FAILED TO PRO VE GENUINENESS OF THE PURCHASES AND THE SELLER THE ASSESSING OFFICER MADE A REASON ABLE ESTIMATION OF 24.8% ON PROFIT EMBEDDED IN BOGUS PURCHASES. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER CONTENDED THAT THOUGH THE TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN THE MONETARY LIMIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019 BUT THE CASE OF ASSESSEE FALLS UNDER EXCEPTION SPEC IFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018 AND AMENDED ON 20/08/2 018 . 3. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPART MENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF ABUTHORITIES BELOW. TH E ASSESSEE MADE PURCHASES TO THE TUNE OF RS.3,70,429/- FROM M/S. JAN KUSHAL METAL CORP. SINCE, THE ASSESSEE FAILED TO SUBSTANTIATE THE TRAIL OF GOODS AND GENUINENESS OF THE SELLER, THE TRANSACTION WAS HELD TO BE BOGUS BY THE ASSESSING OFFICER. EVEN NO TICES SENT TO THE SUPPLIERS BY THE ASSESSING OFFICER UNDER SECTION 133(6) OF THE ACT WERE RECEIVED BACK UNSERVED WITH THE POSTAL REMARK, LEFT. SINCE, THE SALES DECLAR ED BY THE ASSESSEE WERE ACCEPTED BY THE REVENUE, THE ASSESSING OFFICER ESTIMATED PROFIT EMBEDDED IN THE BOGUS TRANSACTION. THE ASSESSING OFFICER MADE ADDITION O F RS.92,607/- BY ESTIMATING PROFIT @ 24.8% OF THE TOTAL BOGUS PURCHASES. THE CIT(A) U PHELD THE FINDINGS OF ASSESSING 3 . 5322/ / 2019 (. . 2009-10 ) ITA NO.5322/MUM/2019(A.Y.2009-10 OFFICER AS REGARDS BOGUS TRANSACTION HOWEVER, HE RE DUCED THE ESTIMATION OF PROFIT TO 12.5% OF BOGUS PURCHASES. AGAINST THE FINDINGS OF CIT(A) REDUCING THE PROFIT RATIO, THE REVENUE IS IN APPEAL, TAKING INTO CONSIDERATIO N ENTIRETY OF FACTS, WE ARE OF THE CONSIDERED VIEW THAT ESTIMATION OF PROFIT AT 24.8% IS ON THE HIGHER SIDE. THE ESTIMATION OF PROFIT BY CIT(A) IS REASONABLE AND J USTIFIED. WE CONCUR WITH THE FINDINGS OF CIT(A) AND UPHOLD THE SAME. THE APPEA L BY REVENUE IS DISMISSED DEVOID OF ANY MERIT. 4. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 11 TH DAY OF MARCH, 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 11/03/2021 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