INCOME TAX OFFICER 32 (1) (2), Mumbai V. SHRI CHIRANJILAL B SHAH, Mumbai

ITA 5791/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8167 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: SANJAY BHACHAWAT
• Keywords: Bogus purchase

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! , $ BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER . 5791 // 20 19 (. . 2009-10 ) ITA NO.5791/MUM/2019 (A.Y.2009-10) ITO-32(1)(2), ROOM NO. 704, 7 TH FLOOR, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400051. ...... + / APPELLANT VS. SHRI CHIRANJILAL B SHAH, 2, PATEL INDUSTRIAL ESTATE, S.V. ROAD, DAHISAR (E), MUMBAI-400068. PAN: AAFPS3862D ..... ,./ RESPONDENT + // APPELLANT BY : SH. SANJAY J. SETHI ,. // RESPONDENT BY : SH. SANJAY BHACHAWAT 0 / DATE OF HEARING : 09/06/2021 0 / DATE OF PRONOUNCEMENT : 30/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-46, MUMBAI [HE REINAFTER REFERRED TO AS THE CIT(A)] DATED 14.06.2019 FOR THE ASSESSMENT Y EAR 2009-10. 2 . 5791 //20 19 (. .2009-10 ) ITA NO.5791/MUM/2019 (A.Y.2009-10) 2. SH. SANJAY J. SETHI REPRESENTING THE DEPARTMENT SUBMITTED THAT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR (AY) UND ER APPEAL, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS. 1,64,732/- FROM THREE DEALERS, DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. DURING ASSESSMENT PROCEE DINGS, THE ASSESSEE NEITHER PRODUCES THE SAID DEALERS NOR ANY CONFIRMAT IONS FROM THEM WERE FILED. NO DOCUMENT WAS FURNISHED BY THE ASSESSEE TO PROVE TRAIL OF GOODS. THUS, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING AU THENTICITY OF THE DEALERS AND THE PURCHASES MADE FROM THEM. THE ASSESSING OFFICER (AO) AFTER CONSIDERING THE ENTIRE FACTS ESTIMATED GROSS PROFIT (GP) @ 20% ON BOGUS PURCHASES AND MADE ADDITION OF RS. 32,946/-. IN FIRST APPELLATE P ROCEEDINGS, THE CIT(A) RESTRICTED THE ADDITION TO 10% OF THE BOGUS PURCHAS ES. THE LD. DR PRAYED FOR RESTORING THE FINDINGS OF AO. 3. ON THE OTHER HAND, SH. SANJAY BHACHAWAT APPEARIN G ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SELLING OF RUBBER GOODS. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED THE NAME, A DDRESSES AND TIN OF THE ALLEGED SUSPICIOUS DEALERS. THE ASSESSEE HAD ALSO F URNISHED COPIES OF THE INVOICES, DELIVERY CHALLANES, BANK DETAILS TO DISCH ARGE HIS ONUS IN PROVING GENUINENESS OF THE ALLEGED SUSPICIOUS DEALERS AND P URCHASES MADE FROM THEM. DESPITE THE EVIDENCES FURNISHED BY THE ASSESSEE, TH E AO HELD THE PURCHASES FROM THE AFORESAID DEALERS AS BOGUS AND ESTIMATED G P ADDITION OF 20%, THE CIT(A) HAS RESTRICTED TO 10%. THE ASSESSEE HAS ACCE PTED THE SAME AND IS NOT IN APPEAL AGAINST THE FINDINGS OF CIT(A), ALTHOUGH THE ASSESSEE HAD FURNISHED THE DOCUMENTS TO PROVE GENUINENESS OF THE PURCHASES. 3 . 5791 //20 19 (. .2009-10 ) ITA NO.5791/MUM/2019 (A.Y.2009-10) 4. BOTH SIDES HEARD, ORDERS OF THE AUTHORITIES BELO W EXAMINED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO WAS NOT SA TISFIED WITH THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE TO PROVE GENUINENESS OF THE PURCHASES AND THE DEALERS. SINCE, THE SALES TURNOVE R DECLARED BY THE ASSESSEE WAS ACCEPTED, THE AO ESTIMATED GP ON ALLEGED UNPROV ED PURCHASES @ 20%. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE GP ON ALLEGED BOGUS PURCHASES TO 10%. WE ARE OF CONSIDERED VIEW THAT ES TIMATION OF SUPPRESSED PROFIT MARGIN ON UNPROVED PURCHASES BY THE AO WAS O N HIGHER SIDE. WE CONCUR WITH THE FINDINGS OF CIT(A), HENCE, THE IMPUGNED OR DER IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, BEING DEVOID OF ANY MERIT . ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 30 TH DAY OF JULY, 2021. SD/- SD/- (MANOJ KUMAR AGGARWAL) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 4/ DATED: 30/07/2021 SK, PS , ! , ! , ! , ! 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