SMT.SAROJDEVI S JAIN, MUMBAI V. INCOME TAX OFFICER WARD 9(3)(2), MUMBAI

ITA 5855/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1635 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 11-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Reopening of assessment; Bogus purchase; Set aside
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI C.N.PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 5855/MUM/2018 ASSESSMENT YEAR : 2010-11 S MT. SAROJDEVI S. JAIN, PROP: RATAN STEEL INDUSTRIES, 36/40, ROOM NO.34, HINGLAJ BHAVAN, GULAL WADI, MUMBAI [PAN : AADPJ0340D] VS. INCOME TAX OFFICER, WARD-9(3)(2), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI RA M TI WARI , DR DATE OF HEARING : 1 9 - 0 9 - 201 9 DATE OF PRONOUNCEMENT : 30 - 0 9 - 201 9 O R D E R PER RAJESH KUMAR, A.M: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-5, MUMBAI, DATED 27-06-2018(HEREINAFTER REFERRED TO AS CIT(A). 2. BRIEF FACTS OF THE CASE ARE THAT, ASSESSEE, AN I NDIVIDUAL, ENGAGED IN THE BUSINESS OF TRADING OF FERROUS AND N ON-FERROUS METALS HAS FILED HER RETURN OF INCOME ELECTRONICALL Y ON 09-09- 2010, DECLARING THE TOTAL INCOME AT RS.6,11,780/-. IN THIS CASE, THE OFFICE OF DGIT(INV.), MUMBAI, HAD COMMUNI CATED THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT OF ITA NO. 5855/MUM/2018 : 2 : MAHARASHTRA TO THE ASSESSING OFFICER THAT ASSESSEE HAS OBTAINED HAWALA PURCHASE BILLS FROM HAWALA PARTIES AND AS A RESULT THE ASSESSEE IS INVOLVED IN TAKING ENTRIES FROM THE FOLLOWING PARTIES: S.NO. NAME OF THE PARTY AMOUNT (RS) 1 AMOL INDUSTRIES 6,26,080 2 CORAL TRADING CO., 11,04,002 3 KRISHNA STEEL INDUSTRIES 9,51,908 4 ASIAN METAL INDUSTRIES 25,93,090 5 LITTLEWORLD TRADE IMPEX PVT. LTD., 16,13,504 TOTAL: 68,13,504 2.1. ON THE BASIS OF EVIDENCE GATHERED ON THE NON-G ENUINE PURCHASES AND TO VERIFY THE SAME, THE CASE WAS RE-O PENED BY ISSUANCE OF NOTICE U/S.148 OF THE INCOME TAX ACT A FTER RECORDING REASONS FOR RE-OPENING OF ASSESSMENT. TH E AO COMPLETED THE ASSESSMENT U/S.143(3) R.W.S.147 OF TH E ACT, DETERMINING THE TOTAL INCOME OF RS.14,72,850/- BY M AKING ADDITION OF RS.8,61,073/-. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(A), WHO DISMISSED THE APPEAL OF ASSESSEE, BY SU STAINING THE ADDITION MADE BY THE AO. 4. AGGRIEVED THE APPELLATE ORDER , THE ASSESSEE PRE FERRED THE PRESENT APPEAL BEFORE US CHALLENGING THE VALI DITY OF THE ISSUANCE OF NOTICE U/S.148 OF THE ACT AND CONSEQUEN T RE- ASSESSMENT ORDER AND ALSO AGITATED THE PART CONFI RMATION OF ADDITION TO THE TUNE OF RS.8,61,073/- . 5. LD.DR RELIED HEAVILY ON THE ORDERS OF CIT(A) AND AO, BY SUBMITTING THAT THE APPEAL OF ASSESSEE MAY BE DISM ISSED AS ITA NO. 5855/MUM/2018 : 3 : THE ASSESSEE WAS FOUND TO BE ENGAGED IN AVAILING B OGUS PURCHASES FROM HAWALA PARTIES, WITHOUT PHYSICAL DEL IVERY OF MATERIALS THEREBY SAVING NON-PAYMENT OF VAT AND V ARIOUS OTHER LEVIES. THEREFORE, LD DR PRAYED BEFORE THE B ENCH THAT THE ADDITION CONFIRMED BY THE LD.CIT(A) MAY BE SUST AINED. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE, UNDISPUTED LY, ASSESSEE IS BENEFICIARY OF BOGUS HAWALA PURCHASE EN TRIES. THE ASSESSEE CHALLENGES THE PART SUSTENANCE OF ADD ITION ON ACCOUNT OF PURCHASES BY THE AO @12.5% WHICH IS STAT ED TO BE EXCESSIVE AND UNREASONABLE IN VIEW OF THE PROFIT S OF THE ASSESSEE. THE ASSESSEE IS A DEALER IN IRON AND STE EL ITEMS IN WHICH THE GP RANGES FROM 2% TO 4%. WE ARE, THEREFOR E, OF THE VIEW THAT IT WOULD BE REASONABLE AND FAIR IF THE AD DITION IS DIRECTED @ 4%, ON THE SAID BOGUS PURCHASES OF THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND D IRECT THE AO TO MAKE ADDITION @ 4% . 7. SINCE WE HAVE DECIDED THE ISSUE ON MERIT , THE GROUNDS RAISED ON LEGAL ISSUES NOT TO BE ADJUDICATED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2019 SD/- SD/- ( C.N. PRASAD ) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI; /DATED : 30-09-2019 TNMM ITA NO. 5855/MUM/2018 : 4 : / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A), MUMBAI 4. / CIT, MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, //TRUE COPY// / (DY./ASST. REGISTRAR) , / ITAT, MUMBAI