ITO 22 (2)(3), Mumbai V. M/S LISTA JEWELS , Mumbai

ITA 5704/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0313 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Assessee Lawyers: NIRAV MEHTA
• Keywords: Bogus purchase; Search and seizure; Accommodation entries
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5704 //20 19 (. . 2012-13 ) ITA NO.5704/MUM/2019 (A.Y.2012-13) ITO-2(2)(3), 311, 3 RD FLOOR, PIRAMAL CHAMBERS, LAL BAUG, LAREL, MUMBAI-400012. ...... ' / APPELLANT VS. M/S LISTA JEWELS OFFICE NO. 1 & 2, KHAR SHEETAL CHSL UNION PARK, KHAR (W), MUMBAI-400052. PAN: AACFL7885N . .... (*/ RESPONDENT ' +/ APPELLANT BY : MS. SMITA VERMA (* +/ RESPONDENT BY : SHRI NIRAV MEHTA , / DATE OF HEARING : 06/04/2021 , / DATE OF PRONOUNCEMENT : 01/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-34, MUMBAI [HE REINAFTER REFERRED TO AS THE CIT(A)] DATED 16.05.2019 FOR THE ASSESSMENT Y EAR (AY) 2012-13. 2 . 5704 //20 19 (. .2012-13 ) ITA NO.5704/MUM/2019 (A.Y.2012-13) 2. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING AND RETAIL TRA DING OF GOLD AND DIAMOND JEWELLERY. AS PER INFORMATION RECEIVED FROM DGIT (I NVESTIGATION), MUMBAI, THE ASSESSEE HAD OBTAINED ACCOMMODATION ENTRIES FROM CO NCERNS BELONGING TO BHANWARLAL JAIN GROUP. SHRI BHANWARLAL JAIN IS A LE ADING ENTRY PROVIDER. DURING THE COURSE OF SEARCH AND SEIZURE ACTION ON THE GROU P, HE ADMITTED THAT HE HAS FLOATED VARIOUS CONCERNS SOLELY FOR THE PURPOSE OF PROVIDING ACCOMMODATION ENTRIES ON COMMISSION BASIS. THE ASSESSEE HAS OBTAI NED BOGUS PURCHASE BILLS AGGREGATING TO RS. 45,09,746/- FROM BOGUS CONCERNS BELONGING TO BHANWARLAL JAIN GROUP. DURING ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER (AO) HAS REJECTED THE BOOKS OF ASSESSEE AND THEREAFTER ESTIM ATED GROSS PROFIT (GP) @ 25% ON BOGUS PURCHASE ENTRIES OBTAINED BY ASSESSEE FROM THE CONCERNS BELONGING TO BHANWARLAL JAIN. IN FIRST APPELLATE PR OCEEDINGS, THE CIT(A) HAS RESTRICTED THE ADDITION TO 12.5%. THE LD. DR PRAYED FOR REVERSING THE FINDINGS OF CIT(A) AND UPHOLD THE ADDITION MADE IN ASSESSMENT O RDER. 3. PER CONTRA, SHRI NIRAV MEHTA APPEARING ON BEHALF OF THE ASSESSEE SUPPORTING THE ORDER OF CIT(A) SUBMITTED THAT THE A SSESSEE HAD FURNISHED VARIOUS DOCUMENTS BEFORE THE AO TO SUBSTANTIATE GEN UINENESS OF PURCHASES. THE ASSESSEE FURNISHED COPIES OF PURCHASE BILLS, BA NK STATEMENTS, LEDGER ACCOUNTS AND EVEN AFFIDAVIT OF THE VENDORS CONFIRMI NG TRANSACTIONS. THE NOTICES UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT] WERE ISSUED TO THE PARTIES FROM WH OM THE ASSESSEE HAD MADE PURCHASES. ALL THE PARTIES RESPONDED TO THE NOTICES AND FILED THEIR ACKNOWLEDGEMENT OF RETURN OF INCOME, COPIES OF INVO ICES, LEDGER ACCOUNTS OF 3 . 5704 //20 19 (. .2012-13 ) ITA NO.5704/MUM/2019 (A.Y.2012-13) THE ASSESSEE IN THEIR BOOKS AND THE COPIES OF BANK STATEMENTS SHOWING PAYMENTS RECEIVED FROM THE ASSESSEE AGAINST THE SAL ES. DESPITE HAVING FURNISHED THE EVIDENCES TO PROVE GENUINENESS OF TRA NSACTIONS, THE AO MADE ADDITION. THE CIT(A) AFTER EXAMINING THE DOCUMENTS HAS RESTRICTED THE ADDITION TO 12.5% OF ALLEGED BOGUS PURCHASES, THE ASSESSEE H AS ACCEPTED THE SAME TO PUT LITIGATION TO AN END. 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSEE HAS ALLEGEDLY OBTAINED BOGUS PURCHASE BILLS FROM TH E CONCERNS BELONGING TO BHANWARLAL JAIN GROUP. THE AO AFTER REJECTING THE B OOKS OF ASSESSEE HAS MADE ADDITION BY ESTIMATING PROFIT MARGIN ON BOGUS PURCH ASES AT 25%. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) HAS UPHELD THE FI NDINGS OF AO IN SO FAR AS ASSESSEES INVOLVEMENT IN BOGUS PURCHASE IS CONCERN ED, HOWEVER, THE CIT(A) ALLOWED PART RELIEF TO ASSESSEE BY RESTRICTING QUAN TUM ADDITION TO 12.5. KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS, ESTIMATION OF PROFIT MARGIN AT 25% IS VERY MUCH ON THE HIGHER SIDE. THE ESTIMAT ION OF PROFIT MARGIN BY CIT(A) HAS BEEN ACCEPTED BY THE ASSESSEE WHICH SEEM S TO BE REASONABLE. I SEE NO INFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAME IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 01 ST DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 1/ DATED: 01/07/2021 SK, PS ( 2 ( 2 ( 2 ( 2 COPY OF THE ORDER FORWARDED TO : 4 . 5704 //20 19 (. .2012-13 ) ITA NO.5704/MUM/2019 (A.Y.2012-13) 1. ' / THE APPELLANT , 2. (* / THE RESPONDENT. 3. 3 ( )/ THE CIT(A)- 4. 3 CIT 5. ( , . . . , / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI