ITO 22(3)(1)- ERSTWHILE, NAVI MUMBAI V. AMIT S. AGARWAL, NAVI MUMBAI

ITA 5732/MUM/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6004 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 22-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAVLD
• Assessee Lawyers: MANISH V SHAH LD
• Keywords: Reopening of assessment; Bogus purchase; Peak credit; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

ITA NO.5732/MUM/2015 AMIT S. AGARWAL ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5732/MUM/2015 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER - 28(1)(1) ROOM NO.329, 3 RD FLOOR, TOWER NO.6 VASHI RAILWAY STATION COMPLEX, VASHI NAVI MUMBAI-400 705 / VS. AMIT S. AGARWAL FLAT NO.101, BUILDING NO.51 SEAWOODS ESTATE, NERUL(W) NAVI MUMBAI-400 705 !' ./ ./ PAN/GIR NO.AABPA-3472-H ( '$ /APPELLANT ) : ( %'$ / RESPONDENT ) REVENUEBY : RAJESH KUMAR YADAV, LD.DR ASSESSEE BY : MANISH V. SHAH, LD. AR / DATE OF HEARING : 12/07/2018 / DATE OF PRONOUNCEMENT : 12 /07/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY ] 2009-10 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-26 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-26/IT/21/14-15 DATED 07/10/2015 BY RAISING FOLLOWING GROUNDS OF APPEAL: - 2 ITA NO.5732/MUM/2015 AMIT S. AGARWAL ASSESSMENT YEAR-2009-10 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS.77,58,233/- U/S.6 9C OF THE ACT TO RS.4,58,120/- @5.65% GROSS PROFIT DECLARED BY THE ASSESSEE ON THE TOTAL BOGUS HAWALA PURCHASES OF RS.81,08,233/-, THEREBY ALLOWING RELIE F OF RS.73,00,113/- TO THE ASSESSEE. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER- 22(3)(1), MUMBAI [AO] U/S 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT,1961 ON 30/09/2014 WHEREIN THE ASSESSEE HAS BEEN SADDLE D WITH CERTAIN ADDITION OF RS.77.58 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES, WHICH IS THE SOLE SUBJECT MATTER OF THIS APPEAL. TH E ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE AT RS.6.18 LACS WAS PROCESSED U/S 143(1). 2. BRIEFLY STATED THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN TRADING OF IRON & STEEL UNDER PROPRIETORSHIP CONCERN NAMELY ARPIT ENTERPRISES WAS SUBJECTED TO REASSESSMENT PROCEEDINGS FOR IMPUG NED AY PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT, MAHARASHTRA REGARDING DEALERS BEING INDULGING IN BOGUS PURCHASE BILLS WITHOUT CARRYING OUT ANY ACTUAL BUSINESS . PURSUANT TO THE SAID INFORMATION, IT WAS FOUND THAT THE ASSESSEE MADE CERTAIN PURCHASES AGGREGATING TO RS.81,08,233/- FROM SIX SUCH SUSPICIOUS DEALERS, TH E DETAILS OF WHICH HAVE BEEN EXTRACTED AT PARA-3 OF THE QUANTUM ASSESSMENT ORDER. CONSEQUENTLY NOTICE U/S 148 DATED 25/03/2014 WAS ISSUED TO THE A SSESSEE WHEREIN THE ASSESSEE WAS REQUIRED TO SUBSTANTIATE THE PURCHASES MADE BY HIM. THE ASSESSEE DEFENDED THE PURCHASES MADE BY HIM. HOWEVE R, NOTICES U/S 133(6) ISSUED BY LD. AO TO CONFIRM THE TRANSACTIONS REMAINED UN-SERVED. 3 ITA NO.5732/MUM/2015 AMIT S. AGARWAL ASSESSMENT YEAR-2009-10 FINALLY, NOT CONVINCED, LD. AO MADE THE ADDITION OF RS.77.58 LACS IN THE HANDS OF THE ASSESSEE, BEING PEAK CREDIT OF ALLEGED BOGUS PURCHASES. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 07/10/2 015 WHEREIN THE LD. CIT(A), AFTER CONSIDERING THE FACTUAL MATRIX AND PL ACING RELIANCE ON CERTAIN JUDICIAL PRONOUNCEMENTS, ESTIMATED THE IMPUGNED ADD ITIONS TO 5.65% OF AGGREGATE ALLEGED BOGUS PURCHASES. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE ASSES SEE, SIMILARLY AGGRIEVED BY THE ADDITION OF 5.65% AS SUSTAINED BY LD. CIT(A) CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE THIS TRIBUNAL VIDE ITA NO. 5867/MUM/2015 DATED 03/11/2017 WHEREIN THE MATTER H AS BEEN CONCLUDED AS FOLLOWS:- 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI ALS ON RECORD. THOUGH, IN THE MEMORANDUM OF APPEAL THE ASSESSEE HAS RAISED MULTIP LE GROUNDS INCLUDING THE VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT, HOWEVER, AT THE TIME OF HEARING THE ONLY SUBMISSION MADE BY THE LEARNED A.R . IS TO THE EFFECT THAT OUT OF THE AMOUNT ADDED TOWARDS BOGUS PURCHASES, THERE ARE PUR CHASES RETURNED BACK BY THE ASSESSEE. THEREFORE, THE G.P. RATE ADOPTED BY THE C OMMISSIONER (APPEALS) SHOULD BE APPLIED TO NET PURCHASES. AFTER HEARING THE SUBMISS IONS OF THE PARTIES WE ARE OF THE VIEW THAT THE ISSUE RELATING TO THE ADDITION MADE O N ACCOUNT OF BOGUS PURCHASES REQUIRES TO BE REMITTED BACK TO THE FILE OF THE ASS ESSING OFFICER FOR VERIFYING THE AFORESAID CLAIM OF THE ASSESSEE. LET THE ASSESSING OFFICER VERIFY ASSESSEES CLAIM OF PURCHASE RETURNS AND IN CASE HE IS SATISFIED WITH A SSESSEES CLAIM, LET HIM APPLY THE G.P. RATE OF 5.6% TO NET PURCHASES, ALLEGED TO BE B OGUS. GROUND NO. 4 IS PARTLY ALLOWED. 5. WE HAVE CAREFULLY PERUSED THE SUBMISSIONS AND TH E CITED ORDER OF THE TRIBUNAL. WE FIND THAT A VIEW HAS ALREADY BEEN TAKE N BY THE TRIBUNAL IN ASSESSEES APPEAL AND THE MATTER HAS ALREADY BEEN R EMITTED BACK TO LD. 4 ITA NO.5732/MUM/2015 AMIT S. AGARWAL ASSESSMENT YEAR-2009-10 AO WITH CERTAIN DIRECTIONS. CONCURRING WITH THE SAM E, WE DISMISS THE REVENUES APPEAL. 6. RESULTANTLY, THE REVENUES APPEAL STAND DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JULY, 2018 SD/- SD/- (C.N.PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 12.07.2018 SR.PS:-THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. ()*+,- / THE APPELLANT 2. 123,- / THE RESPONDENT 3. 73873 9: ) ()*+ ( / THE CIT(A) 4. 73873 9: / CIT CONCERNED 5. CDEF*31G:GHI , 738()*+K3(HI8L , / DR, ITAT, MUMBAI 6. FNO + / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) ./01 , / ITAT, MUMBAI