ASSISTANT COMMISSIONER OF INCOME TAX-10(1)(1), MUMBAI V. H.K.JEWELS PVT LTD., MUMBAI

ITA 5659/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1767 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Accommodation entries
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5659 //2019 (. . 2010-11 ) ITA NO.5659/MUM/2019 (A.Y.2010-11) ACIT -10(1)(1), 2 ND FLOOR, ROOM NO. 209, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ...... ) / APPELLANT VS. H.K. JEWELS PVT. LTD. 3 RD FLOOR, WICEL ADMINISTRATION BUILDING, CENTRAL ROAD, OPP. SEEPZ, MIDC, ANDHERI (E), MUMBAI-400093. PAN: AACCH2454E . .... *,/ RESPONDENT ) -/ APPELLANT BY : SH. SUSHIL KUMAR MISHRA *, -/ RESPONDENT BY : NONE . / DATE OF HEARING : 30/03/2021 . / DATE OF PRONOUNCEMENT : 11/06/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-17, MUMBAI [HEREINAFTER REFERR ED TO AS THE CIT(A)] DATED 20.06.2019 FOR THE ASSESSMENT YEAR (AY) 2010- 11. 2 . 5659 //2019 (. .2010-11 ) ITA NO.5659/MUM/2019 (A.Y.2010-11) 2. THE BRIEF FACTS AS EMANATING FROM RECORDS ARE: T HE ASSESSEE IS A MANUFACTURER AND TRADER OF GOLD & DIAMOND JEWELLERY . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSES SEE IS INVOLVED IN OBTAINING ACCOMMODATION ENTRIES AGGREGATING TO RS. 4,95,084/- FROM M/S AMIT TRADING CO., A DECLARED HAWALA OPERATOR. DURING ASS ESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO SUBSTANTIATE GENUINENESS OF PURC HASES AND THE AFORESAID DEALER. THE AO MADE ADDITION OF ENTIRE ALLEGED BOGU S PURCHASES. THE ASSESSEE CARRY THE ISSUE IN APPEAL BEFORE THE CIT(A). THE CI T(A) AFTER EXAMINING THE FACTS AND VARIOUS DECISIONS RENDERED BY HONBLE HIGH COUR T AND THE TRIBUNAL RESTRICTED THE ADDITION TO 15% OF ALLEGED BOGUS PUR CHASES. HENCE, THE PRESENT APPEAL BY THE REVENUE. 3. SHRI SUSHIL KUMAR MISHRA REPRESENTING THE DEPART MENT SUBMITTED THAT THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF SUS PICIOUS PURCHASES AND THE DEALER FROM WHOM SUCH PURCHASES WERE MADE. THE NOTI CE UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED T O AS THE ACT] WAS SENT TO THE DEALER FROM WHOM THE ASSESSEE HAD MADE ALLEGED PURCHASES, THE SAME WAS RECEIVED BACK UNSERVED. THE ASSESSEE HAS NOT FI LED ANY CONFIRMATION FROM THE SAID DEALER TO PROVE GENUINENESS OF THE TRANSAC TIONS. THE LD. DR PRAYED FOR RESTORING THE FINDINGS OF AO AND SETTING-ASIDE THE IMPUGNED ORDER OF CIT(A). 4. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISC HARGE ITS ONUS IN PROVING GENUINENESS OF THE DEALER FROM WHOM ALLEGED BOGUS P URCHASES WERE MADE. AT THE SAME TIME, IT IS OBSERVED THAT THE SALES TURNOV ER DECLARED BY THE ASSESSEE HAVE BEEN ACCEPTED BY THE AO. IT IS NOT THE CASE OF REVENUE THAT THERE IS 3 . 5659 //2019 (. .2010-11 ) ITA NO.5659/MUM/2019 (A.Y.2010-11) DISPARITY IN THE CLOSING STOCK EITHER. THEREFORE, W ITHOUT PURCHASES THERE CANNOT BE SALES. UNDER SUCH LIKE CIRCUMSTANCES, IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN BOGUS TRANSACTIONS THAT CAN BE BROUGHT TO TAX. E NTIRE BOGUS PURCHASES CANNOT BE ADDED. I CONCUR WITH THE FINDINGS OF CIT( A), HENCE, THE SAME ARE UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 1 1 TH DAY OF JUNE, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3/ DATED: 11/06/2021 SK, PS * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *, / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI