ITO 33 (2)(4), MUMBAI V. NILESH D. GANDHI, MUMBAI

ITA 6205/MUM/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9406 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 30-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Gift
• Section: 133(6)

Judgement Text

आयकर अपीलीय अिधकरण मुंबई पीठ “एस एम सी” , मुंबई Įी ǒवकास अवèथी, Ûयाियक सदèय IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं. 6205/मुं/2019 (िन.व.2010-11) ITA NO.6205/MUM/2019 (A.Y.2010-11) ITO-33(2)(4), Room No. 850 8 th Floor, Kautilya Bhavan, B.K.C, Mumbai-400020. ...... अपीलाथȸ /Appellant बनाम Vs. Nilesh D. Gandhi, 1001, 10 th Floor, Rustomji Adarsh Residency, Off. Marve Road, Adarsh Complex, Malad (W), Mumbai-400064. PAN: AERPG0404K ..... Ĥितवादȣ/Respondent अपीलाथȸ Ʈारा/ Appellant by : Sh. Sanjay J. Sethi Ĥितवादȣ Ʈारा/Respondent by : None सुनवाई कȧ ितिथ/ Date of hearing : 30/06/2021 घोषणा कȧ ितिथ/ Date of pronouncement : 20/09/2021 आदेश/ ORDER PER VIKAS AWASTHY, J.M: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-45, Mumbai [hereinafter referred to as ‘the CIT(A)’] dated 06.05.2019 for the Assessment Years (AY) 2010-11. 2. The brief facts of the case as emanating from records are: The assessee is engaged in manufacturing of household products and is trader in 2 आअसं. 6205/मुं/2019 (िन.व.2010-11 ) ITA No. 6205/Mum/2019 (A.Y. 2010-11) promotional gift items. The assessment for Assessment Year (AY) 2010-11 in the case of assessee was re-opened on the basis of information received from the Sales Tax Department, Government of Maharashtra. As per the information received, the assessee had obtained bogus purchase bills from three dealers declared as hawala operators as under: 1. M/s Shah Industries Rs. 1,45,600/- 2. Riddhi Siddhi Corporation Rs. 12,45,400/- 3. H.R. Sales Pvt. Ltd. Rs. 13,63,554/- Total Rs. 27,54,554 3. During assessment proceedings, the Assessing Officer (AO) issued notice under section 133(6) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) to the aforesaid parties. The said notices were returned back unserved by the postal authorities with remarks “Not Known/Left”. The assessee vide letter dated 28.09.2015 pointed to the AO that the assessee is having some dispute with M/s Shah Industries, therefore, the goods purchased from said vendor are still lying in the godown of the assessee, the goods are neither returned nor any payment in respect of the goods purchased from the said vendor has been made. The AO added back entire purchases made by assessee from M/s Shah Industries and in respect of purchases from other two dealers, the AO disallowed 12.5% of such purchases. Aggrieved by the assessment order dated 12.02.2016, the assessee filed appeal before the CIT(A). The CIT(A) after considering submissions of the assessee and documents on record restricted disallowance on entire unproved 3 आअसं. 6205/मुं/2019 (िन.व.2010-11 ) ITA No. 6205/Mum/2019 (A.Y. 2010-11) purchases to 5%. Now, the Revenue is in appeal against the relief allowed by the CIT(A). 4. Sh. Sanjay J. Sethi representing the Department vehemently supported the assessment order and prayed for reversing the findings of CIT(A). The ld. DR submitted that the AO has disallowed 12.5% of the bogus purchases from two dealers and in respect of the 3 rd dealer, the AO has added back entire purchases, as the assessee has himself admitted before the AO that no payment has been made to the said dealer. 5. Submissions made by ld. DR heard, orders of the authorities below examined. Undisputedly, the assessee failed to discharge his onus in proving genuineness of the dealers and the purchases made from them. The AO made disallowance of 12.5% of unproved purchases from two parties, however, in respect of the 3 rd vendor, entire amount has been disallowed. In my considered view, the estimation of suppressed profit margin on unproved purchases by the AO is on higher side. The CIT(A) after considering the facts of the case in fair and justified manner has restricted the disallowance to 5%. I find no infirmity in the view taken by the CIT(A), accordingly, the impugned order is upheld and the appeal by Revenue is dismissed, sans merit. Order pronounced in the open court on Monday, the 20 th day of September, 2021. Sd/- (VIKAS AWASTHY) Ûयाियक सदèय / JUDICIAL MEMBER मुंबई/Mumbai, Ǒदनांक/Dated: 20/09/2021 SK, PS 4 आअसं. 6205/मुं/2019 (िन.व.2010-11 ) ITA No. 6205/Mum/2019 (A.Y. 2010-11) Ĥितिलǒप अĒेǒषतCopy of the Order forwarded to : 1. अपीलाथȸ/The Appellant , 2. Ĥितवादȣ/ The Respondent. 3. आयकर आयुƠ(अ)/ The CIT(A)- 4. आयकर आयुƠ CIT 5. ǒवभागीय Ĥितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाड[ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai