ITO 22 (2)(2), Mumbai V. MAHENDRA L SHAH (HUF), Mumbai

ITA 5701/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3069 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 05-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase
• Section: 143(3); 48; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! '# BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5701 / / 2019 ( '. 2011-12 ) ITA NO.5701/MUM/2019 (A.Y 2011-12) THE ITO-22(2)(2), ROOM NO.309, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012 ...... ) / APPELLANT ' VS. MAHENDRA L. SHAH (HUF), 501, 5 TH FLOOR, SILICON VALLEY, J.K.MEHTA ROAD, SANTACRUZ (WEST), MUMBAI 400 054 PAN: AAGHS 5538B ..... * +!/ RESPONDENT ),/ APPELLANT BY : SHRI SUSHIL KUMAR MISHRA * +!,/ RESPONDENT BY : NONE '- + / DATE OF HEARING : 31/03/2021 ./0 - + / DATE OF PRONOUNCEMENT : 10/06/2021 !'/ ORDER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -34, MUMBAI [IN SHORT THE CIT (A)] DATED 20/05/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS A TRADER OF LADIES READYMADE GARMENTS. ON THE BA SIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARA SHTRA, THE ASSESSMENT 2 . 5701 / / 2019 ( '. 2011-12 ) ITA NO.5701/MUM/2019 (A.Y 2011-12) IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2011-12 WAS REOPENED. AS PER INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED BOG US PURCHASE BILLS AGGREGATING TO RS.27,72,009/- FROM SIX DEALERS DECL ARED AS HAWALA OPERATORS. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURCHASES AND THE DEALERS. T HE NOTICES ISSUED UNDER SECTION 133(3) OF THE INCOME TAX ACT, 1961 ( IN SHO RT THE ACT) BY THE ASSESSING OFFICER TO THE SUPPLIERS ON THE ADDRESSES FURNISHED BY THE ASSESSEE WERE RECEIVED BACK UNSERVED FROM POSTAL AUTHORITIES. NO DOCUMENTARY EVIDENCE IN THE FORM OF LORRY RECEIPT, INWARD REGISTER, STOCK R EGISTER, ETC. WAS FURNISHED BY THE ASSESSEE TO PROVE TRAIL OF GOODS. THE ASSESSIN G OFFICER ESTIMATED 25% G.P ON THE BOGUS PURCHASES AND MADE ADDITION OF RS.6,93 ,002/-. AGGRIEVED BY THE ASSESSMENT ORDER DATED 30/12/2015 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) CHALLENGING REOPENING OF ASSESSMENT UNDER SECTION 1 48 OF THE ACT, AS WELL AS, ADDITION ON MERITS. THE FIRST APPELLATE AUTHORITY U PHELD THE VALIDITY OF REOPENING PROCEEDINGS. ON MERITS OF THE ADDITION, THE CIT(A) GRANTED PART RELIEF TO THE ASSESSEE BY RESTRICTING G.P AT 12.50% . NOW, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE RELIEF GRANT ED BY CIT(A). 3. SHRI SUSHIL KUMAR MISHRA REPRESENTING THE DEPART MENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER WAS QUITE FAIR AND REASONABLE IN RESTRICTING ADDITION @ 25% ON THE BOGUS PURCHASES. THE CIT(A) HAS ERRED IN FURTHER REDUCING ADDITION TO 12.5%. 3 . 5701 / / 2019 ( '. 2011-12 ) ITA NO.5701/MUM/2019 (A.Y 2011-12) 4. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSES SEE FAILED TO PROVE GENUINENESS OF PURCHASES FROM ALLEGED HAWALA OPERAT ORS. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. PARAMSHAKTI DIST RIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO.413 OF 2017 DECIDED ON 15/07/2019 HEL D THAT ONLY PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS CAN BE TAXED. THE ASSESSING OFFICER ESTIMATED 25% G.P ON ALLEGED BOGUS PURCHASES AS AGA INST G.P OF 5.45% DECLARED BY THE ASSESSEE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. ESTIMATION OF GP BY THE ASSESSING OFF ICER ON ALLEGED BOGUS PURCHASES IS VERY MUCH ON THE HIGHER SIDE. I CONCUR WITH THE FINDINGS OF CIT(A), HENCE, THE IMPUGNED ORDER WARRANTS NO INTERFERENCE. THE APPEAL OF REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, TH E 10 TH DAY OF JUNE, 2021 SD/- (VIKAS AWASTHY) ! / JUDICIAL MEMBER / MUMBAI, 2!'/ DATED 10/06/2021 VM , SR. PS (O/S) 4 . 5701 / / 2019 ( '. 2011-12 ) ITA NO.5701/MUM/2019 (A.Y 2011-12) 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