ITO WD 19(2)(3), MUMBAI V. MITHALAL D. MUTHA, MUMBAI

ITA 558/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0243 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Assessee Lawyers: ISHWAR P RATHI
• Keywords: Bogus purchase; Peak credit
• Section: 69C; 143(3); 133(6); 147; 148; 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, ( AM ) ./ I.T.A. NO . 558 / MUM/20 1 6 ( / ASSESSMENT YEAR : 20 0 9 - 10 ) INCOME TAX OFFICER, 19(2)(3), ROOM NO.221, MATRU MANDIR, MUMBAI - 400007 / VS. MR.MITHALAL D MUTHA, PROP, M/S ROLEX INDUSTRIAL CORPORATION, 8 SHOP NO.1, R K BUILDING, NO.4, KHETWADILANE, MUMBAI - 400004 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN NO. : AASPM9256A / APPELLANT BY: SHRI RAJAT MITTAL / RESPONDENT BY SHRI ISHWAR P RATHI / DATE OF HEARING : 3.7. 201 7 / DATE OF PRONOUNCEMENT : 4. 7. 201 7 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 30 , MUMBAI D A T ED 10.11.2015 PERTAINING TO A.Y. 20 0 9 - 10. 2. ONLY GROUND TAKEN BY THE REVENUE IS WITH REGARD TO PART SUSTAINING THE NET ADDITION AT 7.5% OF THE TOTAL BOGUS PURCHASES AS AGAINST THE TOTAL DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES OF RS.60,64,279/ - UNDER SECTION 69C OF THE INCOME TAX ACT, 1961 BY THE AO ON THE BASIS OF PEAK AMOUNT OF PURCHASES FROM 13 PARTIES. THE ASSESSEE FILED RETURN OF INCOME ON 22.9.2009 DECLARING TOTAL INCOME OF RS.8,85,131/ - AND THE ASSESSMENT WAS COMPLETED ITA NO . 558 / M/1 6 2 U/S 143(3) OF THE ACT VIDE ORDER DATED 21.12.2 011 ASSESSING THE TOTAL INCOME AT RS.9,35,130/ - . THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 AND NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 5.3.2012 , A FTER THE AO RECEIVED THE INFORMATION THAT THE ASSESSEE HAS TAKEN SOME ACCO MMODATION ENTRIES OF BOGUS PURCHASE. ACCORDINGLY, THE AO ISSUED NOTICE U/S 133(6) OF THE ACT TO VARIOUS PARTIES WHICH WERE RETURNED UNSERVED WITH THE REMARK OF POSTAL AUTHORITIES NOT KNOWN /LEFT AND THAT THE ASSESSEE FAILED TO PRODUCE THE CORRECT ADDR ESSES OF THE PARTIES. THE AO CAME TO THE CONCLUSION THAT PURCHASES MADE BY THE ASSESSEE FROM THE HAWALA PARTIES OUT OF UNACCOUNTED MONEY OF THE ASSESSEE AND THEREFORE CALCULATED PEAK BALANCE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE U/S 69C OF THE ACT VIDE ASSESSMENT ORDER DATED 13.3.2014 PASSED UNDER SECTION 143(3) OF THE ACT AT AN AMOUNT OF RS.69,49,410/ - BY ADDING RS.60,64,279/ - . 3. IN THE APPELLATE PROCEEDINGS, THE LD.CIT(A) REDUCED THE AMOUNT OF DISALLOWANCE U/S 69C TO 7.5% BY APPLYI NG THE RATE OF 12.5% MINUS GP ALREADY DECLARED BY THE ASSESSEE WHICH WAS 5% AND THUS ARRIVED AT THE RATE OF 7.5% AND DIRECTED THE AO TO 7.5% ON THE SAME OVER AND ABOVE THE REGULAR PROFIT DECLARED BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4 . WE HAVE HE A RD THE RIVAL PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE HAS MADE TRANSACTIONS WITH HAWALA OPERATORS WHO WERE NOT TRACEABLE ON THE ADDRESSED GIVEN BY THE ASSESSEE AND EVEN NOTICE ISSUED U/S 133(6) ISSUED TO THE PARTIES WERE ITA NO . 558 / M/1 6 3 RETURNED UNSERVED. UNDER THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ADDITION SUSTAINED BY THE LD.CIT(A) AT THE RATE OF 7.5% WHICH WAS CALCULATED AT THE RATE OF 12.5% ( - ) GP ALREADY DECLARED WHICH IS 5% IS MOST REASONABLE AND JUSTIFIED AND THEREFORE THE SAME IS AFFIRMED. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 5 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN C OURT ON 4TH JUL, 2017 . 4TH JUL, 2017 SD SD (JOGINDER SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 4. 7.2017 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI