INCOME TAX OFFICER-32(2)(1), MUMBAI V. SHRI INAMULHAQUE HAYATULLAH KHAN, MUMBAI

ITA 5374/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8905 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P RIYANKA JAIN
• 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 . 5374/ / 2019 (. . 2009-10 ) ITA NO.5374/MUM/2019(A.Y.2009-10) I.T.O-31(2)(1), 615, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI 400 051 ...... ) / APPELLANT VS. INAMULHAQUE HAYATULLAH KHAN, PROP.M/S. MAAZ STEEL, SHOP NO.4, OSHIWARA BRIDGE, SV ROAD, GOREGAON (W), MUMBAI 400102 PAN: AOIPK6693R ..... !*/ RESPONDENT ASSESSEE BY : MS. PRIYANKA JAIN REVENUE BY : SHRI SANJAY J. SETHI +* / DATE OF HEARING : 10/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 12/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-42, MUMBAI ( IN SHORT THE CIT (A)) DATED 28/05/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. SHRI SANJAY J. SETHI REPRESENTING THE DEPAR TMENT SUBMITTED THAT ON THE BASIS OF INFORMATION RECEIVED BY THE DGIT(INVN) FR OM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT THE ASSESSEE HAS OB TAINED BOGUS PURCHASE BILLS 2 . 5374/ / 2019 (. . 2009-10 ) ITA NO.5374/MUM/2019(A.Y.2009-10) FROM VARIOUS HAWALA DEALERS(FOUR) AGGREGATING TO RS .12,47,569/- THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 WAS REOPENED. SINCE, THE A SSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURCHASES AND THE SUPPLIERS OF THE GOODS, THE ASSESSING OFFICER CONCLUDED THAT THE PURCHASES FROM THE SUSPICIOUS DEALERS ARE BOGUS. EVEN NOTICES ISSUED UNDER SECTION 133(6) O F THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT), TO THE SUPPLIERS ON THE ADDRESS FURNISHED BY THE ASSESSEE WERE RECEIVED BACK UNSERVED WITH POSTAL REMARKS LEFT/ NOT KNOWN. THE ASSESSING OFFICER IN LINE WITH THE DECISION RENDERED IN THE CASE OF CIT VS. SIMIT P. SHETH 356 ITR 451(GUJ) MADE ADDITION OF THE PROFIT EMBEDDED IN T HE BOGUS TRANSACTIONS. THE ASSESSING OFFICER MADE ADDITION OF RS.3,74,271/- BY ESTIMATING PROFIT @30% ON BOGUS TRANSACTIONS. THE ASSESSEE FILED APPEAL AGAINST TH E ASSESSMENT ORDER DATED 10/03/2015 PASSED UNDER SECTION 143(3) R.W.S. 147 O F THE ACT. THE FIRST APPELLATE AUTHORITY IN PRINCIPLE CONCURRED WITH ASSESSING OF FICER, THAT THE ASSESSEE HAS INDULGED IN BOGUS TRANSACTIONS, HOWEVER, THE CIT(A) REDUCED THE ESTIMATED PROFIT TO 12.5%. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT ESTIMATION OF PROFIT BY ASSESSING OFFICER WAS FAIR AND REASONABLE, THEREFOR E, THE SAME BE RESTORED. THE LD.DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED TH AT THOUGH THE TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN THE MONETARY L IMIT SPECIFIED VIDE CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019 BUT THE CAS E OF ASSESSEE FALLS UNDER EXCEPTION SPECIFIED IN PARA 10(E) OF CIRCULAR NO. 03 OF 2018 DATED 11/07/2018 AND AMENDED ON 20/08/2018 . 3. PER CONTRA, MS. PRIYANKA JAIN APPEARING ON BEHAL F OF THE ASSESSEE SUPPORTED THE FINDINGS OF CIT(A) . THE LD.AUTHORIZED REPRESE NTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRA DING OF IRON AND STEEL. THE PROFIT ESTIMATED BY THE ASSESSING OFFICER ON ALLEGED BOGUS TRANSACTIONS IS VERY MUCH ON THE HIGHER SIDE. THOUGH THE G.P ESTIMATED BY CIT(A) IS ALSO ON THE HIGHER SIDE BUT DUE TO SMALLNESS OF THE AMOUNT THE ASSESSEE IS NOT CONTEST ING THE SAME. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PRAYED FOR CONFIRMIN G THE FINDINGS OF CIT(A). 3 . 5374/ / 2019 (. . 2009-10 ) ITA NO.5374/MUM/2019(A.Y.2009-10) 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. UNDISPUTEDLY, ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS IN PROVI NG GENUINENESS OF PURCHASES AND THE SUPPLIERS OF THE GOODS. THE HON'BLE JURISDICTI ONAL HIGH COURT IN THE CASE OF PCIT VS. PARAMSHAKHTI DISTRIBUTORS PVT. LTD. IN INCOME T AX APPEAL NO.413 OF 2017 DECIDED ON 15/07/2019 HAS HELD THAT IN SUCH LIKE TRANSACT IONS IT IS ONLY PROFIT EMBEDDED IN THE TRANSACTIONS THAT HAS TO BE BROUGHT TO TAX. TH E ESTIMATION OF G.P AT 30% BY THE ASSESSING OFFICER ON BOGUS TRANSACTIONS IS VERY MUC H ON THE HIGHER SIDE. THE CIT(A) AFTER EXAMINING THE FACTS OF THE CASE RESTRICTED TH E ADDITION TO 12.5% ON BOGUS PURCHASES. WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A), HENCE, THE SAME ARE UPHELD. THE APPEAL BY THE REVENUE IS WITH OUT ANY MERIT, ERGO, DISMISSED. 5. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 12 TH DAY OF MARCH, 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 12/03/2021 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