INCOME TAX OFFICER 20(2) (4), Mumbai V. NATIONAL ENGINEERING INDUSTRIES, Mumbai

ITA 5899/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7724 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase
• Section: 143(3); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 5899 / /20 19 (. . 2010-11 ) ITA NO.5899/MUM/2019 (A.Y.2010-11) ITO, 22(2)(4), ROOM NO. 220, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400051. ...... / APPELLANT VS. NATIONAL ENGINEERING INDUSTRIES R.S NIMKAR MARG, GALA NO.-6, 32, JAIRAJBHAI LANE, FORAS ROAD, MUMBAI-400008 PAN: AAAFN2944A ..... / RESPONDENT / APPELLANT BY : SH. SANJAY J. SETHI / RESPONDENT BY : NONE / DATE OF HEARING : 16/06/2021 / DATE OF PRONOUNCEMENT : 24/08/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-55, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 11.06.2019 FOR THE ASSESSMENT YEAR (AY) 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A CONTRACTOR AND IS ENGAGED IN FABRICATION OF STRUCTURAL WORKS AND LABOUR JOB. 2 . 5899 / /20 19 (. .2010-11 ) ITA NO.5899/MUM/2019 (A.Y.2010-11) IN THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) HELD THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS. 27,67,397/- FROM EIGHT DEALERS, DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. THE AO AFTER EXAMINING THE ISSUE MADE ADDITION OF RS. 3,47,050/- BY ESTIMATING SUPPRESSED PROFIT MARGIN ON BOGUS PURCHASES AT 12.5%. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 17.02.2016 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT], THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE POINTED THAT DURING THE PERIOD RELEVANT TO THE A.Y UNDER APPEAL, THE ASSESSEE HAS NOT MADE ANY TRANSACTION OF PURCHASES FROM M/S UNIVERSAL TRADING PVT. LTD., THE AO IN THE ASSESSMENT ORDER HAS OBSERVED THAT THE ASSESSEE INTER ALIA OBTAINED BOGUS PURCHASE BILLS AMOUNTING TO RS. 7,02,130/- FROM UNIVERSAL TRADING CO. THE CIT(A) AFTER EXAMINING THE FACTS DELETED THE ADDITION MADE IN RESPECT OF BOGUS PURCHASES FROM THE AFORESAID PARTY. THUS, THE CIT(A) GRANTED RELIEF OF RS. 87,766/-. HOWEVER, THE CIT(A) RETAINED DISALLOWANCE AT 12.5% OF BOGUS PURCHASES MADE FROM OTHER DEALERS. 3. SH. SANJAY J. SETHI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE CIT(A) HAS ERRED IN GRANTING RELIEF OF RS. 87,766/-. THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE BEFORE THE AO TO SHOW THAT NO PURCHASES WERE MADE BY THE ASSESSEE FROM UNIVERSAL TRADING CO. 4. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF THE AUTHORITIES BELOW EXAMINED. THE SHORT POINT IN THE PRESENT APPEAL IS AGAINST THE RELIEF GRANTED BY THE CIT(A) IN RESPECT OF PURCHASES MADE FROM UNIVERSAL TRADING CO. THE ASSESSEE HAS INDULGED IN OBTAINING BOGUS PURCHASE BILLS TO THE TUNE OF RS. 3 . 5899 / /20 19 (. .2010-11 ) ITA NO.5899/MUM/2019 (A.Y.2010-11) 27,76,397/- FROM EIGHT DEALERS, DECLARED AS HAWALA OPERATORS. ONE OF THE DEALERS FROM WHOM THE ASSESSEE HAS ALLEGEDLY OBTAINED BOGUS PURCHASE BILLS OF RS. 7,02,130/- IS UNIVERSAL TRADING CO. THE ASSESSEE CATEGORICALLY STATED BEFORE THE CIT(A) THAT IT WAS MENTIONED BEFORE THE AO THAT NO PURCHASES WERE MADE FROM UNIVERSAL TRADING CO. & TO SUPPORT THIS CONTENTION ASSESSEE HAD FURNISHED PURCHASE REGISTER. IN ASSESSMENT PROCEEDINGS, THE AO BURSHED ASIDE THE SUBMISSIONS OF ASSESSEE AND MADE ESTIMATED ADDITION OF 12.5% ON THE ENTIRE ALLEGED BOGUS PURCHASES. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) ACCEPTED THE SUBMISSIONS OF ASSESSEE AND DOCUMENTS FURNISHED TO SHOW THAT NO PURCHASES WERE MADE BY THE ASSESSEE FROM UNIVERSAL TRADING CO., CONSEQUENTLY THE CIT(A) DELETED THE ADDITION MADE IN RESPECT OF BOGUS PURCHASES FROM THE SAID PARTY. THE CIT(A) REDUCED RS. 87,766/- [I.E. 12.5% OF RS. 7,02,130/-] FROM THE TOTAL ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES. THE REVENUE HAS NOT FURNISHED ANY DOCUMENT TO CONTROVERT THE FINDINGS OF CIT(A). THEREFORE, I FIND NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. THE ORDER OF CIT(A) IS UPHELD AND APPEAL BY THE REVENUE IS DISMISSED, BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY , THE 24 TH DAY OF AUGUST, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, / DATED: 24/08/2021 SK, PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT , 4 . 5899 / /20 19 (. .2010-11 ) ITA NO.5899/MUM/2019 (A.Y.2010-11) 2. / THE RESPONDENT. 3. ( )/ THE CIT(A)- 4. CIT 5. , . . . , / DR, ITAT, MUMBAI 6. [ / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI