ITO 32 (2)(4), MUMBAI V. OM ENTERPRISES, MUMBAI

ITA 6224/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6380 (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); 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6224 //20 19 (. . 2010-11 ) ITA NO.6224/MUM/2019 (A.Y.2010-11) ITO-32(2)(4), 718, 7 TH FLOOR, KAUTILYA BHAVAN, C-43, G BLOCK, BKC, BANDRA (E), MUMBAI-400051 ...... ' / APPELLANT VS. M/S OM ENTERPRISES A002, GROUND FLOOR, SUNDAR DHAM, RAM BAUG LANE, S.V. ROAD, BORIVALI (W), MUMBAI-400092. PAN: AABFO1769M . .... (*/ 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 10.04.2019 FOR THE ASSESSMENT Y EAR (AY) 2010-11. 2 . 6224 //20 19 (. .2010-11 ) ITA NO.6224/MUM/2019 (A.Y.2010-11) 2. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR (AY) UNDER A PPEAL, THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS. 19 ,08,358/- FROM THE DEALERS, DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPAR TMENT, GOVERNMENT OF MAHARASHTRA. DURING ASSESSMENT PROCEEDING, THE ASSE SSEE FAILED TO RESPOND TO THE NOTICES AND HENCE, THE ASSESSING OFFICER (AO) W AS CONSTRAINED TO PASS THE ASSESSMENT ORDER UNDER SECTION 144 OF THE INCOME TA X ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. THE NOTICES SENT TO THE DEALERS UNDER SECTION 133(6) OF THE ACT WERE RETURNED BACK UNSERVED BY THE POSTAL A UTHORITIES WITH REMARKS LEFT/ NOT KNOWN, HENCE, VERACITY OF DEALERS AND PURCHASES MADE FROM THEM REMAINED UNVERIFIED. THE AO ESTIMATED GROSS PROFIT (GP) AT THE RATE OF 30% ON UNPROVED PURCHASES. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE CIT(A), THE CIT(A) RESTRICTED THE ADDITION 12.5% OF DISPUTED PURCHASES. NOW, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ASSAIL ING THE FINDINGS OF CIT(A) IN REDUCING THE ESTIMATED PROFIT MARGIN ON UNPROVED PU RCHASES FROM 30% TO 12.5%. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) VEH EMENTLY SUPPORTING THE ASSESSMENT ORDER PRAYED FOR UPHOLDING THE ADDITION MADE BY THE AO. 3. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. A PERUSAL OF ASSESSMENT ORDER SHOWS THAT THE ASSESSEE HAS FAILED TO APPEAR BEFORE THE AO. THE ASSESSEE IS ENGAGED IN TR ADING OF AUTO PARTS ETC. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE DEALERS AND PURCHASES MADE FROM THEM. THE SA LES TURNOVER DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE AO, THEREFORE , THE AO HAS ESTIMATED PROFIT MARGIN ON BOGUS PURCHASES AT THE RATE OF 30% . IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) UPHELD THE FINDINGS OF AO I N SO FAR AS ASSESSEES 3 . 6224 //20 19 (. .2010-11 ) ITA NO.6224/MUM/2019 (A.Y.2010-11) INVOLVEMENT IN OBTAINING BOGUS PURCHASE BILLS ARE C ONCERNED. HOWEVER, THE CIT(A) RESTRICTED THE ADDITION ON BOGUS PURCHASES B Y ESTIMATING PROFIT MARGIN AT THE RATE OF 12.5%. IN MY CONSIDERED OPINION, EST IMATION OF PROFIT MARGIN ON UNPROVED PURCHASES BY AO IS ON HIGHER SIDE. I SEE N O INFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAME IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, SANS 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