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

ITA 5792/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8174 (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: 2010-2011
• Appeal Filed On: 09-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! , $ BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER . 5792 //20 19 (. . 2010-11 ) ITA NO.5792/MUM/2019 (A.Y.2010-11) ITO-32(1)(2), ROOM NO. 704, 7 TH FLOOR, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. ...... + / APPELLANT VS. SHRI ASHISH ASHWINBHAI MEHTA B WING NO.12, ESTEE GEEJAY SOCIETY, SAIBABA NAGAR, BORIVALI (W), MUMBAI-400092. PAN: AHVPM8168P ..... ,./ RESPONDENT + // APPELLANT BY : SH. SANJAY J. SETHI ,. // RESPONDENT BY : NONE 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 [HERE INAFTER REFERRED TO AS THE CIT(A)] DATED 04.06.2019 FOR THE ASSESSMENT Y EAR 2010-11. 2 . 5792 //20 19 (. .2010-11 ) ITA NO.5792/MUM/2019 (A.Y.2010-11) 2. THE SOLITARY ISSUE RAISED IN THIS APPEAL BY THE REVENUE IS AGAINST RESTRICTING OF DISALLOWANCE ON ACCOUNT OF BOGUS PUR CHASES TO 8% BY THE CIT(A) AS AGAINST DISALLOWANCE OF 12.5% MADE BY THE ASSESS ING OFFICER (AO). 3. THE ASSESSMENT FOR AY 2010-11 IN THE CASE OF ASS ESSEE WAS RE-OPENED ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA AND DGIT (INVESTIGATION), MUMBAI. AS PER THE INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED BOG US BILLS AMOUNTING TO RS. 1,22,77,912/- FROM VARIOUS DEALERS DECLARED AS HAWA LA OPERATORS BY THE MAHARASHTRA SALES TAX DEPARTMENT. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE AO ISSUED NOTICES UNDER SECTION 133 (6) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT] TO THE SUSPICIOUS DEALERS ON THE ADDRESSES FURNISHED BY THE ASSESSEE. THE NOTICES WE RE RECEIVED BACK UNSERVED FROM THE POSTAL AUTHORITIES WITH REMARKS LEFT/NOT KNOWN. NO DOCUMENTARY EVIDENCE WAS FURNISHED BY THE ASSESSEE IN THE FORM OF INWARD REGISTER, STOCK REGISTER, LORRY RECEIPTS, ETC., TO PROVE TRAIL OF G OODS. THE AO ESTIMATED GROSS PROFIT (GP) ON BOGUS PURCHASES AT 12.5% AND MADE AD DITION OF RS. 15,34,739/-. AGAINST THE ASSESSMENT ORDER DATED 30.12.2015, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) UPHELD THE FIN DINGS OF AO TO THE EXTENT OF ASSESSEES INVOLVEMENT IN OBTAINING BOGUS PURCHASE BILLS, HOWEVER, THE CIT(A) MODIFIED THE DISALLOWANCE BY RESTRICTING GP RATE TO 8% ON BOGUS PURCHASES EXCEPT FOR THE BOGUS PURCHASES MADE FROM ONE OF THE PARTIES I.E. M/S NAVDEEP TRADING COMPANY. THE SAID DEALER DURING ASSESSMENT PROCEEDINGS IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 133(6) OF THE AC T HAD DENIED HAVING ANY TRANSACTION WITH THE ASSESSEE, THE CIT(A) DISALLOWE D ENTIRE ALLEGED PURCHASES 3 . 5792 //20 19 (. .2010-11 ) ITA NO.5792/MUM/2019 (A.Y.2010-11) MADE BY THE ASSESSEE FROM M/S NAVDEEP TRADING COMPA NY DURING THE RELEVANT PERIOD. 4. NOW, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L ASSAILING THE FINDINGS OF CIT(A) IN RESTRICTING DISALLOWANCE TO 8%. 5. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD. ORDERS OF AUTHORITIES BELOW AND THE DOCUMENTS ON RECORD EXAMI NED. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS FILED WRITTEN SU BMISSIONS AND PAPER BOOK CONTAINING BALANCE-SHEET AND PROFIT & LOSS ACCOUNT FOR THE FINANCIAL YEAR ENDED ON 31.03.2010 AND SOME CASE LAWS. THE SAME AR E CONSIDERED. 6. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE H IS ONUS IN PROVING GENUINENESS OF SUSPICIOUS DEALERS AND PURCHASES MAD E FROM THEM. SINCE, THE AO ACCEPTED SALES TURNOVER DECLARED BY THE ASSESSEE , THE AO ESTIMATED GP ON BOGUS PURCHASES AT 12.5%. THE ASSESSEE IS ENGAGED I N WHOLESALE TRADING OF CHEMICALS. THE ESTIMATION OF GP BY AO AT 12.5% IS O N HIGHER SIDE. WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN ESTIMATING SUPP RESSED PROFIT MARGIN ON UNPROVED PURCHASES AT 8%. THE IMPUGNED ORDER IS UPH ELD AND APPEAL OF THE REVENUE IS DISMISSED, SANS 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 4 . 5792 //20 19 (. .2010-11 ) ITA NO.5792/MUM/2019 (A.Y.2010-11) , ! , ! , ! , ! /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