ITO 20 (3)(2), MUMBAI V. M/S ROYAL PLASTICS, MUMBAI

ITA 6264/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6386 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Assessee Lawyers: RUCHI RATHOD
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6264 //20 19 (. . 2009-10 ) ITA NO.6264/MUM/2019 (A.Y.2009-10) ITO-20(3)(2), ROOM NO. 612, 6 TH FLOOR, PIRAMAL CHAMBER, LALBAUG, PAREL, MUMBAI-400012. ...... ' / APPELLANT VS. M/S ROYAL PLASTICS 506, MILAN INDUSTRIAL ESTATE, ABHYUDAYA NAGAR, COTTON GREEN MUMBAI-400033. PAN: AAAFR4437L ..... (*/ RESPONDENT ' +/ APPELLANT BY : MS. SMITA VERMA (* +/ RESPONDENT BY : MS. RUCHI RATHOD , / DATE OF HEARING : 03/05/2021 , / DATE OF PRONOUNCEMENT : 16/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI [HEREINAFTER REFERR ED TO AS THE CIT(A)] DATED 10.07.2019 FOR THE ASSESSMENT YEAR (AY) 2009- 10. 2. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR (AY) UNDER A PPEAL, THE ASSESSEE 2 . 6264 //20 19 (. .2009-10 ) ITA NO.6264/MUM/2019 (A.Y.2009-10) OBTAINED BOGUS PURCHASE BILLS FROM M/S SHREE NAKODA JI IMPEX RS. 8,98,974/- AND M/S ENTECH ENTERPRISES OF RS. 6,06,906/-. THE N AME OF BOTH THE DEALERS WAS MENTIONED IN THE LIST OF HAWALA DEALERS RELEASE D BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. DURING ASSES SMENT PROCEEDINGS, NEITHER THE ASSESSEE COULD PRODUCE THE DEALERS NOR ANY CONFIRMATIONS WERE FILED FROM THEM. EVEN THE NOTICES ISSUED UNDER SECT ION 133(6) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT ] BY THE AO TO THE SAID DEALERS REMAINED UNSERVED. NO DOCUMENT WAS FILED BY THE ASSESSEE IN THE FORM OF LORRY RECEIPTS, STOCK REGISTER OCTROI RECEI PTS, ETC. TO PROVE TRAIL OF GOODS. SINCE, THE AO ACCEPTED THE SALES TURNOVER DECLARED BY THE ASSESSEE, HE ESTIMATED GROSS PROFIT (GP) ON BOGUS PURCHASES AT 1 2.5%. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE GP ON BOGUS PURCHASES TO 11%. THE LD. DR PRAYED FOR RESTORING THE ESTIMATION OF GP AS PER ASSESSMENT ORDER. 3. MS. RUCHI RATHOD APPEARING ON BEHALF OF THE ASSE SSEE VEHEMENTLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FOR DISMISS ING THE APPEAL OF REVENUE. 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSEE IS ENGAGED IN MANUFACTURING OF PLASTIC FILES AND FOLDE RS. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE ITS ONUS IN PROVING GE NUINENESS OF THE AFORESAID DEALERS AND PURCHASES MADE FROM THEM. DURING THE RE LEVANT PERIOD, THE ASSESSEE HAS DECLARED GP OF 17.13%, THE AO MADE DIS ALLOWANCE OF 12.5% ON BOGUS PURCHASES TO COMPENSATE FOR THE PROFIT EARNED BY THE ASSESSEE ON VAT CHARGES SAVED. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) HAS MARGINALLY REDUCED DISALLOWANCE ON BOGUS PURCHASES TO 11%. I FIND NO R EASON TO INTERFERE WITH THE 3 . 6264 //20 19 (. .2009-10 ) ITA NO.6264/MUM/2019 (A.Y.2009-10) IMPUGNED ORDER, THEREFORE, THE SAME IS UPHELD AND A PPEAL 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