INCOME TAX OFFICER 32 (3) (2) , Mumbai V. YOGESH D DABHADE, Mumbai

ITA 5803/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2975 (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: G
• Assessment Year: 2009-2010
• Appeal Filed On: 09-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5803 / / 2019 (%. 2009-10 ) ITA NO.5803/MUM/2019 (A.Y 2009- 10) INCOME TAX OFFICER-32(3)(2) ROOM NO.734, 7 TH FLOOR, KAUTILYA BHAVAVAN, BKC, BANDRA (E), MUMBAI 400 051 ...... ' / APPELLANT % VS. SHRI YOGESH D DABHADE, 2605,GRANDEUR VASANT MARVEL C, OFF WESTERN EXPRESS HIGHWAY, BORIVALI (WEST), MUMBAI 400 092 PAN: AAOPT-3897L ..... ()/ RESPONDENT '*/ APPELLANT BY : SHRI SUSHIL KUMAR MISHRA ()*/ RESPONDENT BY : SHRI MANISH SHETH %+) / DATE OF HEARING : 01/04/2021 ,-. +) / DATE OF PRONOUNCEMENT : 15/06/2021 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-46, MUMBAI [IN SHORT THE CIT( A)] DATED 03/05/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. SHRI SUSHIL KUMAR MISHRA REPRESENTING THE DEPART MENT SUBMITTED THAT THE ASSESSEE HAD INDULGED IN PROCURING BOGUS PURCHASE B ILLS AMOUNTING TO RS.7,03,471/- FROM VARIOUS (FIVE) HAWALA OPERATORS. DURING ASSESS MENT PROCEEDINGS, THE ASSESSEE FAILED TO PROVE GENUINENESS OF PURCHASES AND AUTHE NTICITY OF THE DEALERS. THE 2 ITA NO.5803/MUM/2019 (A.Y 2009-10) NOTICES ISSUED UNDER SECTION 133(6) OF THE INCOME T AX ACT, 1961 ( IN SHORT 'THE ACT') BY THE ASSESSING OFFICER TO SUSPICIOUS DEALERS ON T HE ADDRESSES FURNISHED BY THE ASSESSEE WERE RETURNED BACK UNSERVED BY POSTAL AUTH ORITIES WITH REMARKS LEFT OR NOT KNOWN. THE ASSESSEE COULD NEITHER FURNISH C ONFIRMATION FROM THE SAID DEALERS NOR THE RELEVANT DOCUMENTS VIZ. OCTROI RECEIPTS, DE LIVERY CHALLANS, TRANSPORT RECEIPTS, STOCK REGISTER, ETC. TO PROVE TRAIL OF GOODS. THE ASSESSING OFFICER AFTER EXAMINING THE DOCUMENTS FURNISHED BY THE ASSESSEE MADE ADDITION O F 25% OF THE TOTAL BOGUS PURCHASES. IN FIRST APPELLATE PROCEEDINGS, THE CIT (A) RESTRICTED THE ADDITION TO 6% . THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT T HE ASSESSING OFFICER HAD MADE FAIR AND REASONABLE DISALLOWANCE OF 25% OF TOTAL BO GUS PURCHASES BY PLACING RELIANCE ON THE DECISION IN THE CASE SIMIT P. SETH, 356 ITR 451 (GUJ). THE LD. DEPARTMENTAL REPRESENTATIVE PRAYED FOR REVERSING THE FINDING CIT (A) AND UPHOLDING ADDITION MADE IN ASSESSMENT PROCEEDING. 3. ON THE OTHER HAND, SHRI MANISH SHETH APPEARING O N BEHALF OF THE ASSESSEE STRONGLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FO R DISMISSING THE APPEAL OF REVENUE. THE LD. AUTHORIZED REPRESENTATIVE OF ASSES SEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN PROVIDING LABOUR JOB WORK ON CNC WIRE CUT MACHINE. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE PRODUCED VARIOUS DOCUMENTS SUCH AS PURCHASE INVOICES, BANK STATEMENT, LEDGER ACCOUNT OF THE PARTY, ETC. T O SUBSTANTIATE GENUINENESS OF PURCHASES. HOWEVER, THE ASSESSING OFFICER DISBELIE VED THE SAME AND DISALLOWED 25% OF ALLEGED BOGUS PURCHASES. IN APPELLATE PROCEEDIN G THE CIT(A) HAS RESTRICTED THE ADDITION TO 6% AND THE SAME HAS BEEN ACCEPTED BY TH E ASSESSEE. DURING ASSESSMENT YEAR 2009-10 THE ASSESSEE HAS DECLARED G.P OF 5%. T HE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PRAYED FOR DISMISSING THE APPEAL OF REVENUE AND UPHOLDING THE ORDER OF CIT(A). 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. UNDISPUTEDLY, THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS IN SUBSTA NTIATING GENUINENESS OF DISPUTED PURCHASES AND THE DEALERS FROM WHOM SUCH PURCHASES WERE MADE. AT THE SAME 3 ITA NO.5803/MUM/2019 (A.Y 2009-10) TIME, IT IS OBSERVED THAT THE ASSESSING OFFICER HAS ACCEPTED THE SALES TURNOVER DECLARED BY THE ASSESSEE. IN SUCH LIKE TRANSACTIONS ONLY THE PROFIT ELEMENT EMBEDDED IN THE TRANSACTIONS CAN BE TAXED. THE ASSESSEE HAS DECLARED G.P OF 5% ON REGULAR SALES/TURNOVER. ESTIMATION OF 25% MARGIN ON BOGUS P URCHASES BY THE ASSESSING OFFICER IS VERY MUCH ON THE HIGHER SIDE. I CONCUR W ITH THE FINDINGS OF CIT(A) IN RESTRICTING THE ADDITION TO 6% OF BOGUS PURCHASES. THE IMPUGNED ORDER IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, BEING DEVOID OF MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 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