INCOME TAX OFFICER 32(1) (2), , Mumbai V. SHRI ASHISH ASHWINBHAI MEHTA, Mumbai

ITA 5785/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2973 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 133(6); 145(3)

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5785 / / 2019 (%. 2011-12 ) ITA NO.5785/MUM/2019(A.Y 2011-12) INCOME TAX OFFICER -32(1)(2) ROOM NO.704, 7 TH FLOOR, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400 051 ...... ' / APPELLANT % VS. SHRI ASHISH ASHWINBHAI MEHTA, BWING NO.12, ESTEE GEEJAY SOCIETY, SAIBABA NAGAR, BORIVALI (W), MUMBAI 400 092 PAN: AHVPM-8168-P ..... ()/ RESPONDENT '*/ APPELLANT BY : SHRI SUSHIL KUMAR MISHRA ()*/ RESPONDENT BY : SHRI MANISH J. SETH %+) / DATE OF HEARING : 01/04/2021 ,-. +) / DATE OF PRONOUNCEMENT : 15/06/2021 / ORDER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS) -46, MUMBAI [IN SHORT THE CIT(A)] DATED 04/06/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. SHRI SUSHIL KUMAR MISHRA REPRESENTING THE DEPAR TMENT SUBMITTED THAT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER AP PEAL THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS AGGREGATING TO RS .1,86,68,872/- FROM VARIOUS (16) HAWALA DEALERS. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NEITHER PROVE BONA-FIDE OF DEALERS NOR PURCHASES MADE FROM TH EM. THE NOTICES ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT,1961 ( IN SHO RT 'THE ACT') TO DEALERS ON THE 2 ITA NO.5785/MUM/2019(A.Y 2011-12) ADDRESSES FURNISHED BY THE ASSESSEE WERE RETURNED B ACK UNSERVED BY POSTAL AUTHORITIES WITH REMARKS LEFT/NOT KNOWN. ONLY O NE DEALER I.E. M/S. NAVDEEP TRADING CORPORATION RESPONDED TO THE NOTICE DENYING ANY TRANSACTION WITH THE ASSESSEE. THE ASSESSING OFFICER ESTIMATED PROFIT M ARGIN ON BOGUS PURCHASES AT 12.5% AND MADE ADDITION OF RS.23,33,609/-. THE CIT (A) REDUCED THE ADDITION TO 8% OF BOGUS PURCHASES. THE LD.DEPARTMENTAL REPRESENT ATIVE SUBMITTED THAT ESTIMATION OF PROFIT MARGIN BY ASSESSING OFFICER IS REASONABLE AND FAIR, THEREFORE, THE SAME SHOULD BE SUSTAINED. THE LD.DEPARTMENTAL REPRESENT ATIVE PRAYED FOR REVERSING THE FINDING OF CIT(A). 3. ON THE OTHER HAND, SHRI MANISH J. SETH APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE IMPUGNED ORDER. THE LD.AU THORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A WHOLESALE DEALER IN CHEMICALS. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IN ASSESSMENT PROCEEDINGS THE ASSESSEE FURNISHED VARIOUS DOCUMENT S VIZ. PURCHASE INVOICES, SALES INVOICES, DELIVERY CHALLANS, QUANTITATIVE DETAILS O F ALL PURCHASES AND CORRESPONDING SALES, BANK STATEMENT, TAX AUDIT REPORT, ETC. TO SU BSTANTIATE GENUINENESS OF PURCHASE TRANSACTIONS. THE ASSESSING OFFICER WITHOUT EXAMIN ING THE DOCUMENTS FURNISHED BY THE ASSESSEE REJECTED THE BOOKS OF ASSESSEE UNDER S ECTION 145(3) OF THE ACT AND MADE ADDITION BY ESTIMATING G.P ON ALLEGED BOGUS PU RCHASES @ 12.5%. THE ASSESSEE HAS DECLARED G.P OF 1.5% DURING THE RELEVANT PERIO D. THE ONLY REASON FOR MAKING ADDITION BY THE ASSESSING OFFICER WAS THAT THE ASSE SSEE HAS FAILED TO PRODUCE DEALERS FROM WHOM ALLEGED BOGUS PURCHASES WERE MADE. THE L D.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ACC EPTED THE DISALLOWANCE MADE BY CIT(A) AT 8% TO END LITIGATION. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PRAYED FOR DISMISSING APPEAL OF THE REVENUE AND UPHOLDING THE ORDER OF CIT(A). 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSEE HAS PURPORTEDLY INDULGED IN OBTAINING BOGUS PURCHASE BI LLS FROM DECLARED HAWALA 3 ITA NO.5785/MUM/2019(A.Y 2011-12) OPERATORS. THE CIT(A) HAS UPHELD THE FINDING OF A SSESSING OFFICER THAT THE ASSESSEE HAS MADE BOGUS PURCHASES FROM HAWALA DEALERS. HOWE VER, THE CIT(A) HAS RESTRICTED THE ADDITION TO 8% OF THE BOGUS PURCHASES. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, I AM OF THE CONSIDERED VIEW THAT ESTIMAT ION OF PROFIT MARGIN BY THE ASSESSING OFFICER IS ON HIGHER SIDE. I FIND THE ORDER OF CIT(A) FAIR AND REASONABLE, HENCE, WARRANTS NO INTERFERENCE. THE IMPUGNED ORDE R IS UPHELD AND APPEAL BY THE REVENUE IS DISMISSED, BEING DEVOID OF MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, T HE 15 TH DAY OF JUNE, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED 15/06/2021 VM , SR. PS (O/S) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23()% , . . . , / DR, ITAT, MUMBAI 6. 34567 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI