ITO 31 (1)(1), MUMBAI V. ANANT S. RAJGURU, MUMBAI

ITA 6223/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6384 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6223 //20 19 (. . 2010-11 ) ITA NO.6223/MUM/2019 (A.Y.2010-11) ITO-31(1)(1), 603, KAUTILYA BHAVAN, , BKC, BANDRA (E), MUMBAI-400051 ...... ' / APPELLANT VS. SHRI ANANT S. RAJGURU, UNIT NO.2, OSHIWARA GARDEN ROAD, NEAR AJIT GLASS SIGNAL, JOGESHWARI (W), MUMBAI-400102. PAN: AAAPR5217N ..... (*/ RESPONDENT ' +/ APPELLANT BY : MS. SMITA VERMA (* +/ RESPONDENT BY : NONE , / DATE OF HEARING : 03/05/2021 , / DATE OF PRONOUNCEMENT : 16/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-45, MUMBAI [HE REINAFTER REFERRED TO AS THE CIT(A)] DATED 01.04.2019 FOR THE ASSESSMENT Y EAR (AY) 2010-11. 2. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AMOUNTIN G TO RS. 3,20,312/- FROM M/S SHREE RAM STEEL DURING THE PERIOD RELEVANT TO T HE AY UNDER APPEAL. THE 2 . 6223 //20 19 (. .2010-11 ) ITA NO.6223/MUM/2019 (A.Y.2010-11) ASSESSEE COULD NEITHER PRODUCE THE DEALER NOR ANY C ONFIRMATION FROM THE SAID DEALER. THE NOTICE ISSUED UNDER SECTION 133(6) OF T HE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT] REMAINED UNS ERVED. NO DOCUMENT WAS FURNISHED BY THE ASSESSEE TO PROVE TRAIL OF GOODS. THE ASSESSING OFFICER (AO) AFTER EXAMINING THE FACTS OF CASE ESTIMATED THE GRO SS PROFIT (GP) AT THE RATE OF 29% ON BOGUS PURCHASES OF RS. 1,60,433/- AND MADE A DDITION OF RS. 46,525/- AND ADDED BACK ENTIRE UNPROVED PURCHASES TO THE TUN E OF RS. 1,59,879/-. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE CIT (A). THE CIT(A) RESTRICTED THE ADDITION TO RS. 40,040/- BY ESTIMATING PROFIT MARGI N OF 12.5% ON TOTAL BOGUS PURCHASES. THE DEPARTMENT IS IN APPEAL AGAINST THE ADDITION RESTRICTED BY THE CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE (DR) PR AYED FOR RESTORING THE FINDINGS OF AO. 3. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. THE ASSESSEE IS ENGAGED IN MANUFACTURING OF GEARS, GEAR BOXES AND MACHINERY SPARES. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURCHASES MADE FROM M/S SHRE E RAM STEEL. THE AO MADE ADDITION BY ESTIMATING PROFIT MARGIN OF 29% ON PART OF UNPROVED PURCHASES AND FOR THE REMAINING UNPROVED PURCHASES THE AO MADE 100% ADDITION. HOWEVER, NO REASON WHATSOEVER WAS GIVEN B Y THE AO IN BIFURCATING UNPROVED PURCHASES FOR MAKING DISALLOWANCE AT 29% A ND 100%. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) HAS UPHELD THE FI NDINGS OF AO TO THE EXTENT OF ASSESSEES INVOLVEMENT IN OBTAINING BOGUS PURCHA SE BILLS, HOWEVER, THE CIT(A) RESTRICTED THE ADDITION TO 12.5% OF TOTAL UN PROVED PURCHASES. I AM OF CONSIDERED VIEW THAT DISALLOWANCE MADE BY THE AO IN RESPECT OF BOGUS PURCHASES IS VERY MUCH ON THE HIGHER SIDE. FURTHER, AFTER HAVING ACCEPTED SALES 3 . 6223 //20 19 (. .2010-11 ) ITA NO.6223/MUM/2019 (A.Y.2010-11) TURNOVER, ENTIRE UNPROVED PURCHASES CANNOT BE ADDED . IT IS THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS THAT CAN BE BROUGHT T O TAX. I FIND NO INFIRMITY IN THE IMPUGNED ORDER, HENCE, IT WARRANTS NO INTERFERE NCE. THE APPEAL OF REVENUE IS DISMISSED, BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 16 TH DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 1/ DATED: 16/07/2021 SK, PS ( 2 ( 2 ( 2 ( 2 COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. (* / THE RESPONDENT. 3. 3 ( )/ THE CIT(A)- 4. 3 CIT 5. ( , . . . , / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI