SALEM STEEL INDUSTRIES, MUMBAI V. ITO 19 (3)(2), MUMBAI

ITA 6230/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6381 (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: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6230 //20 19 (. . 2010-11 ) ITA NO.6230/MUM/2019 (A.Y.2010-11) M/S SALEM STEEL INDUSTRIES 27/29, SINDHI LANE, MUMBAI-400004 PAN: AAOFS8839D ...... ' / APPELLANT VS. ITO-19(3)(2), MATRU MANDIR, ROOM NO. 224, TARDEO ROAD, MUMBAI-400007. ..... (*/ RESPONDENT ' +/ APPELLANT BY : NONE (* +/ RESPONDENT BY : MS. SMITA VERMA , / DATE OF HEARING : 03/05/2021 , / DATE OF PRONOUNCEMENT : 16/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-30, MUMBAI [HEREINAFTER REFERR ED TO AS THE CIT(A)] DATED 10.08.2018 FOR THE ASSESSMENT YEAR (AY) 2010- 11. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) FOUND THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS FROM M/S SIDDHIVINAYAK CORPORATION AMOUNTING TO RS. 61,922/- . SINCE, THE ASSESSEE 2 . 6230 //20 19 (. .2010-11 ) ITA NO.6230/MUM/2019 (A.Y.2010-11) FAILED TO DISCHARGE ITS ONUS IN PROVING AUTHENTICIT Y OF THE DEALER AND THE PURCHASES MADE FROM THE SAID DEALER, THE AO MADE AD DITION BY ESTIMATING PROFIT MARGIN AT THE RATE OF 12.5% ON UNPROVED PURC HASES, THE AO MADE ADDITION OF RS. 77,404/- ON ACCOUNT OF SUSPICIOUS P URCHASES. AGAINST THE ASSESSMENT ORDER DATED 04.03.2016, THE ASSESSEE FIL ED APPEAL BEFORE THE CIT(A) INTERALIA CHALLENGING THE ADDITION MADE ON ACCOUNT OF SUSPIC IOUS PURCHASES. THE CIT(A) UPHELD THE ASSESSMENT ORDER A ND DISMISSED THE APPEAL OF ASSESSEE IN TOTO. HENCE, THE PRESENT APPEAL BY T HE ASSESSEE. 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT VEHE MENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE AP PEAL OF ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE ASSESSEE COULD NEITHER PRODUCE THE DEALER NOR ANY CONFIRMATION FROM THE SA ID DEALER WAS FURNISHED BY THE ASSESSEE. THE NAME OF DEALER FROM WHOM THE ASSE SSEE HAD OBTAINED ACCOMMODATION BILLS FIGURED IN THE LIST OF HAWALA O PERATORS DECLARED BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. FU RTHER, THE ASSESSEE FAILED TO FURNISH COPIES OF LORRY RECEIPTS, DELIVER Y CHALLANES, TRANSPORT BILLS, ETC. TO PROVE TRAIL OF GOODS. THEREFORE, THE AO HELD THE PURCHASES MADE FROM SUSPICIOUS DEALER AS BOGUS AND MADE ADDITION BY EST IMATING GP ON SUCH UNPROVED PURCHASES. THE CIT(A) HAS UPHELD THE SAME. 3. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. THE ASSESSEE IN APPEAL HAS CHALLENGED RE- OPENING OF ASSESSMENT, IN AN ALTERNATE PLEA, THE ASSESSEE HAS PRAYED FOR REST RICTING THE ADDITION TO THE EXTENT OF GP DECLARED BY ASSESSEE I.E. 7.26%. THE A SSESSEE HAD ASSAILED RE- OPENING OF ASSESSMENT BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE 3 . 6230 //20 19 (. .2010-11 ) ITA NO.6230/MUM/2019 (A.Y.2010-11) SUBMISSIONS OF ASSESSEE HAS UPHELD THE VALIDITY OF RE-OPENING. NO CONTRARY MATERIAL IS AVAILABLE BEFORE THE TRIBUNAL TO CONTRO VERT THE FINDINGS OF CIT(A). HENCE, GROUND NO.1 TO 3 OF APPEAL ARE DISMISSED. 4. IN GROUND NO.4 OF APPEAL, THE ASSESSEE HAS RAISE D ALTERNATE CONTENTION ASSAILING ADDITION ON BOGUS PURCHASES CONFIRMED BY THE CIT(A). THE PRAYER OF THE ASSESSEE IS TO RESTRICT GP ON ALLEGED UNPROVED PURCHASES TO GP ALREADY DECLARED BY THE ASSESSEE. UNDISPUTEDLY, THE ASSESSE E HAS FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE DEALER AND THE P URCHASES MADE FROM THE SAID DEALER. THE AUTHORITIES BELOW HAVE ESTIMATED P ROFIT MARGIN ON UNPROVED PURCHASES AT 12.5%. GENERALLY, IN TRADING OF FERROU S AND NON-FERROUS METALS, GP RANGES BETWEEN 5% TO 8%. IN MY CONSIDERED VIEW, EST IMATION OF GP AT 12.5% BY AO/CIT(A) IS ON HIGHER SIDE. TAKING INTO CONSIDE RATION ENTIRETY OF FACTS, I DEEM IT APPROPRIATE TO RESTRICT ADDITION IN RESPECT OF BOGUS PURCHASES TO 7.5%. THE IMPUGNED ORDER IS MODIFIED, ACCORDINGLY AND GRO UND NO.4 OF THE APPEAL IS PARTLY ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 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 . 6230 //20 19 ( . .2010-11 ) ITA NO.6230/MUM/2019 (A.Y.2010-11) 4. 3 CIT 5. ( , . . . , / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI