ITO- 26(2)(5), MUMBAI, MUMBAI V. RAJKUMAR JIVRAM MISHRA, MUMBAI

ITA 6119/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6364 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase
• Section: 143(3); 143(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.6119/M/2019 ASSESSMENT YEAR: 2010-11 INCOME TAX OFFICER- 26(2)(5), ROOM NO.319, 3 RD FLOOR, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 VS. MR. RAJKUMAR JIVRAM MISHRA, 272, GROUND FLOOR, B/4, SANTOKH MANSION, BNP ROAD, OPP. KOKAN BANK, MAZGAON, MUMBAI 400 010 PAN: AIWPM5448G (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : MS. SMITA VERMA, D.R. DATE OF HEARING : 28.06.2021 DATE OF PRONOUNCEMENT : 02.07.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER DATED 24.03.2019 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. AT THE TIME OF HEARING WHEN THE CASE WAS CALLED FOR HEARING, NEITHER ASSESSEE NOR HIS AUTHORISED REPRESENTATIVE WAS PRESENT TO ATTEND THE HEARING NOR ANY APPLICATION FOR ADJOU RNMENT WAS FILED. THEREFORE, WE ARE DECIDING THE APPEAL OF TH E REVENUE AFTER HEARING THE LD. D.R. AND AFTER CONSIDERING THE MERI TS OF THE CASE. ITA NO.6119/M/2019 MR. RAJKUMAR JIVRAM MISHRA 2 3. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) RESTRICTING THE ADDITION TO 12.5% OF THE BOGUS PURCHASES AS AGAINST 100% MADE BY THE AO. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED T HE RETURN OF INCOME ON 26.09.2010 DECLARING TOTAL INCOME OF RS.1 0,31,250/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THE CASE OF THE ASSESSEE WAS THEREAFTER REOPENED BY THE AO A FTER RECEIPT OF INFORMATION FROM DGIT (INV.), MUMBAI THAT ASSESS EE IS BENEFICIARY OF HAWALA PURCHASE ENTRIES TO THE EXTEN T OF RS.2,60,000 /- AND ACCORDINGLY THE NOTICE UNDER SEC TION 148 OF THE ACT WAS ISSUED ON 30.03.2017. THE AO CALLED FO R VARIOUS DETAILS AND INFORMATION FROM THE ASSESSEE FROM TIME TO TIME DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH W ERE DULY FILED BEFORE THE AO. THE AO FINALLY REJECTED THE C ONTENTIONS OF THE ASSESSEE AND TREATED THE PURCHASES AS NON GENUI NE THEREBY MAKING AN ADDITION OF 100% OF THE PURCHASES OF RS. 2,60,000/- TO THE INCOME OF THE ASSESSEE BY FRAMING ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT DAT ED 11.12.2017. 5. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PAR TLY ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING THE AO TO A PPLY RATE OF 12.5% OF THE BOGUS PURCHASES BY FOLLOWING THE DECIS ION OF CIT VS. SIMIT P. SHETH (2013) 356 ITR 451 (GUJ) BY HOLD ING THAT ONLY PROFIT EMBEDDED IN THE BOGUS PURCHASES CAN BE BROUG HT TO TAX AND NOT THE ENTIRE PURCHASES. 6. AFTER HEARING THE LD. D.R. AND PERUSING THE MATE RIAL ON RECORD, WE OBSERVE THAT LD. CIT(A) HAS PASSED THE A PPELLATE ITA NO.6119/M/2019 MR. RAJKUMAR JIVRAM MISHRA 3 ORDER AFTER FOLLOWING THE DECISION OF HONBLE GUJAR AT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH (SUPRA) WHERE IN IT HAS BEEN HELD THAT IN CASE OF BOGUS PURCHASES ONLY PROFIT EL EMENT EMBEDDED IN THE BOGUS PURCHASES IS TO BE ASSESSED. WE NOTE THAT THE CO-ORDINATE BENCHES OF THE TRIBUNAL HAVE B EEN TAKING A CONSISTENT VIEW THAT IN CASE OF BOGUS PURCHASES ONL Y A GP RATE RANGING BETWEEN 2% TO 12.5% CAN BE APPLIED DEPENDI NG ON THE FACTS OF THE CASE. IN THE PRESENT CASE THE LD. CIT (A) HAS DIRECTED TO ASSESS THE INCOME @ 12.5% WHICH IS QUITE JUSTIFI ED AND REASONABLE AND THEREFORE WE DO NOT FIND ANY REASON WHY THE REVENUE IS AGGRIEVED BY THIS ORDER. ACCORDINGLY, W E UPHOLD THE ORDER OF THE LD CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.07.2021. SD/- SD/- (SAKTIJIT DEY ) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 02.07.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.