HARAKCHAND T. SANGHVI ,HUF, MUMBAI V. ITO 19 (1)(5), MUMBAI

ITA 6232/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9611 (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: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6232 / /201 9 ((. . 2009-10 ) ITA NO.6232/MUM/2019 (A.Y.2009-10) M/S. HARAKCHAND T. SANGHVI, 213, DR.M.G.MAHIM TURA MARG, MEHTA MENSION NO.1, 4 TH FLOOR,ROOM NO.19, MUMBAI 400 004. PAN: AAAHH-6219-J ...... * / APPELLANT ( VS. THE INCOME TAX OFFICER 19(1)(5), MATRU MANDIR, TARDEO ROAD, MUMBAI 400 007. ..... +,/ RESPONDENT *-/ APPELLANT BY : NONE +,-/ RESPONDENT BY : MS. SMITA VERMA (., / DATE OF HEARING : 03/05/2021 /01 ., / DATE OF PRONOUNCEMENT : 16/07/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -29, MUMBAI [IN SHORT THE CIT (A)] DATED 24/07/2019 FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM R ECORDS ARE: THE ASSESSEE IS ENGAGED IN MANUFACTURING OF AIR CONDITIONER CONDE NSERS AND COOLING COILS. THE ASSESSMENT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 WAS REOPENED ON THE GROUND THAT THE ASSESSEE HAS INDULGED IN OBTAIN ING BOGUS PURCHASE BILLS FROM SUSPICIOUS DEALERS. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSING 2 ITA NO.6232/MUM/2019 (A.Y.2009-10) OFFICER FOUND THAT THE ASSESSEE HAS OBTAINED ACCOM MODATION BILLS AGGREGATING TO RS.38,61,834/- FROM THE FOLLOWING DEALERS: NAME OF THE HAWALA PARTY AMOUNT (IN RS.) BIG TRADE AGENCY 18,71,960/- PARSHVA & CO. 4,33,125/- RUCHI IMPEX 15,56,749/- TOTAL 38,61,834/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER ASKED THE ASSESSEE TO PROVE GENUINENESS OF PURCHASES AND AU THENTICITY OF AFORESAID DEALERS. NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT,1 961 ( IN SHORT 'THE ACT') WAS ISSUED TO THE AFORESAID VENDORS, HOWEVER, THE SAME WERE RECEIVED BACK UNSERVED FROM POSTAL AUTHORITIES WITH REMARKS NOT KNOWN OR LEFT. THE ASSESSEE COULD NEITHER PRODUCE THE DEALERS, NOR CONFIRMATIONS FROM THEM. TO PROVE TRAIL OF GOODS PROCURED FROM SUSPICIOUS DEALERS THE ASSESSEE FAILED TO PROD UCE ANY DOCUMENT VIZ. DELIVERY CHALLANS, TRANSPORT RECEIPTS, GOOD INWARD REGISTER, STOCK REGISTER, ETC. THUS, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE DEALERS AND THE PURCHASES MADE FROM THEM. THE ASSESSING OFFICER A FTER REJECTING THE BOOKS OF ASSESSEE ESTIMATED PROFIT MARGIN ON BOGUS PURCHASES AT 12.5% AND MADE ADDITION OF RS.4,82,729/-. AGGRIEVED BY THE ASSESSMENT ORDER DATED 21/03/2015 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) CHALLENGING VALIDITY OF REOPENING, REJECTION OF BOOKS OF ACCOU NT AND THE ADDITION MADE IN RESPECT OF BOGUS PURCHASES. THE CIT(A) AFTER EXAMINING THE FACTS OF CASE AND SUBMISSIONS OF ASSESSEE UPHELD REOPENING OF ASSESSMENT AND ADDI TION MADE ON MERITS AND DISMISSED APPEAL OF THE ASSESSEE IN TOTO. HENCE, THE PRESENT APPEAL BY ASSESSEE. 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT VEH EMENTLY DEFENDED THE IMPUGNED ORDER PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FAIL ED TO DISCHARGE HIS ONUS IN 3 ITA NO.6232/MUM/2019 (A.Y.2009-10) PROVING AUTHENTICITY OF SUSPICIOUS DEALERS AND GE NUINENESS OF PURCHASES MADE FROM THEM. THE ASSESSING OFFICER / CIT(A) IN A FAIR AND REASONABLE MANNER HAS ESTIMATED GROSS PROFIT ON BOGUS PURCHASES AT 12.5%. THE LD. DEPARTMENTAL REPRESENTATIVE PRAYED FOR UPHOLDING THE IMPUGNED ORDER. 4. SUBMISSIONS MADE BY LD.DEPARTMENTAL REPRESENTATI VE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE IN GROUND NO.1 & 2 OF APPEAL HAS ASSAILED REOPENING OF ASSESSMENT. SIMILAR GROUND WAS RAISED BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE SAME AS UPHELD VALIDITY OF REOP ENING. NO CONTRARY MATERIAL IS AVAILABLE ON RECORD, THEREFORE, I FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A) ON THIS ISSUE. CONSEQUENTLY, GROUND NO.1 AN D 2 OF APPEAL ARE DISMISSED. 5. IN GROUND NO.3 OF APPEAL, THE ASSESSEE HAS CH ALLENGED REJECTION OF BOOKS OF ACCOUNT. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISC HARGE HIS ONUS IN PROVING GENUINENESS OF SUSPICIOUS DEALERS AND PURCHASES M ADE FROM THEM. THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ASSESSEE AND TH EREAFTER ESTIMATED G.P ON BOGUS PURCHASES. IT WOULD BE RELEVANT TO MENTION HERE TH AT THE ASSESSING OFFICER WHILE ESTIMATING G.P ON UNPROVED PURCHASES HAS NEITHER D ISTURBED THE G.P DECLARED BY THE ASSESSEE ON REGULAR PURCHASES NOR SALES TURNOVER D ECLARED BY THE ASSESSEE. THEREFORE, NO PREJUDICE IS CAUSED TO THE ASSESSEE IN SO FAR REGULAR/UNDISPUTED PURCHASES . THE GROUND NO.3 OF APPEAL IS WITHOUT ANY MERIT HENCE, DISMISSED. 6. IN GROUND NO.4 OF APPEAL, THE ASSESSEE HAS ASS AILED ADDITION MADE ON ESTIMATIONS IN RESPECT OF BOGUS PURCHASES. THE AS SESSEE HAS DECLARED OVER ALL G.P OF 6.24%. THE ASSESSING OFFICER HAS ESTIMATED G.P ON BOGUS PURCHASES AT 12.5%. THE CIT(A) HAS UPHELD THE SAME. IN MY CONSIDERED OPINI ON ESTIMATION OF G.P AT 12.5% IS ON HIGHER SIDE. TO MEET THE ENDS OF JUSTICE SUPPR ESSED PROFIT MARGIN ON BOGUS PURCHASES IS RESTRICTED TO 7%. THE GROUND NO.4 OF APPEAL IS PARTLY ALLOWED. 4 ITA NO.6232/MUM/2019 (A.Y.2009-10) 7. THE GROUND NO.5 AND 6 ARE GENERAL IN NATURE, HEN CE, REQUIRE NO ADJUDICATION. 8. IN THE RESULT, APPEAL BY ASSESSEE IS PARTLY ALLO WED IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDA Y, THE 16 TH DAY OF JULY, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3(/ DATED 16/07/2021 VM , SR. PS (O/S) COPY OF THE ORDER FORWARDED TO : 1. * / THE APPELLANT , 2. +, / THE RESPONDENT. 3. 4, ( )/ THE CIT(A)- 4. 4, CIT 5. 56+,( , . . . , / DR, ITAT, MUMBAI 6. 6789: / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI