HIREN CHANDRAKANT PAREKH, MUMBAI V. INCOME TAX OFFICER-32(1)(5), MUMBAI

ITA 5389/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7980 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 19-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase; Accommodation entries
• Section: 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 . 5389/ / 2019 (. . 2009-10 ) ITA NO.5389/MUM/2019(A.Y.2009-10) HIREN CHANDRAKANT PAREKH, 402, NARMADA APARTMENT, SHIMPOLI ROAD, HARIDAS NAGAR, BORIVALI WEST, MUMBAI 400 092 PAN: AFXPP8325D ...... ) / APPELLANT VS. INCOME TAX OFFICER -32(1)(5) C-11, ROOM NO.203, 2 ND FLOOR, PRATYAKSHAKAR BHAVAN,BANDRA KURLA COMPLEX,, MUMBAI 400 051 ..... !*/ RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS. SMITA VERMA +* / DATE OF HEARING : 11/03/2021 ,-. +* / DATE OF PRONOUNCEMENT : 16/03/2021 '/ ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-44, MUMBAI ( IN SHORT THE CIT (A)) DATED 10/06/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON-FERROUS METAL S. ON THE BASIS OF INFORMATION RECEIVED BY DGIT(INV), MUMBAI FROM THE SALES TAX D EPARTMENT, GOVERNMENT OF 2 . 5389/ / 2019 (. . 2009-10 ) ITA NO.5389/MUM/2019(A.Y.2009-10) MAHARASHTRA, THE ASSESSMENT IN THE CASE OF ASSESSE E FOR ASSESSMENT YEAR 2009-10 WAS REOPENED. AS PER THE INFORMATION RECEIVED, TH E ASSESSEE HAD OBTAINED ACCOMMODATION ENTRIES TO THE TUNE OF RS.1,04,81,150 /- FROM VARIOUS ( NINE) DEALERS DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPAR TMENT. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO SUBSTANTIATE GE NUINENESS OF PURCHASES MADE FROM SUSPICIOUS DEALERS. THE ASSESSING OFFICER C ONSIDERING THE FACTS AND THE CONTENTIONS OF THE ASSESSEE ESTIMATED G.P @ 12.5% O N BOGUS PURCHASES AND MADE ADDITION OF RS.13,10,144/-. AGGRIEVED BY THE ASSES SMENT ORDER DATED 16/03/2015, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE C IT(A) UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF ASSES SEE. 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT VEHE MENTLY SUPPORTING THE IMPUGNED ORDER SUBMITTED THAT THE ASSESSEE HAS FAIL ED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURCHASES AND THE SUPPLIERS. NO DOCUMENTS WERE FURNISHED BY THE ASSESSEE TO PROVE TRAIL OF GOODS. NO CONFIR MATIONS WERE FILED BY THE ASSESSEE FROM THE SUPPLIERS, EVEN THE NOTICES ISSUED TO THE SUPPLIERS BY THE ASSESSING OFFICER UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) ON THE ADDRESSES PROVIDED BY THE ASSESSEE WERE RETURNED BA CK UNSERVED WITH POSTAL REMARKS UNCLAIMED. THE LD.DEPARTMENTAL REPRESENT ATIVE CONTENDED THAT THE ASSESSING OFFICER AND THE CIT(A) HAVE MADE REASONAB LE ESTIMATION OF G.P AT 12.5% FOLLOWING THE ORDER OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P. SHETH, 356 ITR 451. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD.DEPARTM ENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. UND ISPUTEDLY, THE ASSESSEE HAS FAILED TO PROVE AUTHENTICITY OF THE TRANSACTIONS WI TH HAWALA OPERATORS. NO DOCUMENTS WERE FURNISHED BY THE ASSESSEE TO SUBSTAN TIATE THAT THE GOODS WERE IN FACT DELIVERED TO THE ASSESSEE OR DELIVERED AT TH E ADDRESS AS DIRECTED BY THE ASSESSEE. NO CONFIRMATIONS WERE EITHER FILED BY TH E ASSESSEE FROM SUSPICIOUS 3 . 5389/ / 2019 (. . 2009-10 ) ITA NO.5389/MUM/2019(A.Y.2009-10) DEALERS. IN SUCH BOGUS TRANSACTIONS IT IS THE PRO FIT ELEMENT EMBEDDED IN THE PURCHASE TRANSACTION THAT HAS TO BE BROUGHT TO TAX. THE ASSESSING OFFICER AND THE CIT(A) HAS DETERMINED G.P @ 12.5% OF THE BOGUS PU RCHASES. THE ESTIMATION OF G.P BY LOWER AUTHORITIES IS ON HIGHER SIDE. IN THE TRA DE OF FERROUS AND NON-FERROUS METALS THE G.P GENERALLY VARIES BETWEEN 5 TO 8%. WE OBSER VE THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2010-11 HAS ACCEPTED G. P OF 7.5%. IN THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAS ADMITTED G.P OF 4 .95%. TAKING INTO CONSIDERATION ENTIRETY OF FACTS WE HOLD THAT THE ENDS OF JUSTICE WOULD BE MET IF THE G.P IS RESTRICTED TO 7.5% ON BOGUS PURCHASES. THE IMPUGNED ORDER IS MODIFIED ACCORDINGLY. THE GROUND NO.3 OF THE APPEAL IS PARTLY ALLOWED IN THE TERMS AFORESAID. 5. IN GROUND NO. 1 & 2 OF THE APPEAL, THE ASSESSEE HAS ASSAILED REOPENING OF ASSESSMENT. WE HAVE EXAMINED THE FINDINGS OF FIRST APPELLATE AUTHORITY ON THIS ISSUE. WE FIND NO REASON TO INTERFERE WITH THE WELL REASON ED FINDINGS OF THE FIRST APPELLATE AUTHORITY. THE GROUND NO.1 & 2 OF THE APPEAL ARE TH US, DISMISSED. 6. THE GROUND NO.4 OF APPEAL IS GENERAL IN NATURE AND HENCE, REQUIRE NO ADJUDICATION. 7. IN THE RESULT, APPEAL BY ASSESSEE IS PARTLY ALLO WED IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 16 TH DAY OF MARCH, 2021. SD/ SD/- (N.K.PRADHAN) (VIKAS AWAST HY) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 0/ DATED 16/03/2021 VM , SR. PS (O/S) 4 . 5389/ / 2019 (. . 2009-10 ) ITA NO.5389/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