ITO 19 (3)(1), MUMBAI V. RADIUM STEEL, MUMBAI

ITA 6293/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7493 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 143(1); 145(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 6293 /M UM /20 18 ASSESSMENT YEAR: 2009 - 10 ITO - 19(3)(1), MUMBAI VS. RADIUM STEEL 7, HEERA BLD., 1 ST PARSIWADA LANE, NANUBHAI DESAI ROAD, MUMBAI, PIN - 400004. PAN: AAEFR6166J (APPELLANT) (RESPONDENT) PRESENT FOR: APPELLANT BY : JOTHILAKSHMI NAYAK, SR. DR RESPONDENT BY : VIMAL PUNMIYA, CA DATE OF HEARING : 09 .01.2020 DATE OF PRONOUNCEMENT : 29 .01 . 20 20 O R D E R PER RAJESH KUMAR , ACCOUNTANT MEMBER: THE PRESENT AP PEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 10.08 .2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFER RED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009 - 10. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) RESTRICTING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO 12.5% AS AGAINST 25% MADE BY THE AO. RADIUM STEEL ITA NO.6293/MUM/2018 2 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED HI S RETURN OF INCOME ON 23 .09.2009 DECLARING TOTAL I NCOME OF RS. 1,41, 0 53 / - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FERROUS AND NON - FERROUS. THE AO REOPENED THE CASE AFTER RECEIVING INFOR MATION FROM SALES TAX DEPARTMENT, GOVT. OF MAHARASHTRA THAT THE ASSESSEE IS BENEFIC IARY OF HAWALA PURCHASE ENTRIES. THE CASE OF THE ASSESSEE WAS REOPENED U/S 147 BY ISSUING A NOTICE U/S 148 DATED 07.02 .2014. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON TO FILE BILL S , VOUCHERS WITH OTHER DOCUMENTS TO PROVE THE GENUINENESS OF THESE PURCHASES. THE ASSESSEE FILED COP IES OF BILLS OF THE SUPPLIERS, BANK STATEMENT S , SALES TAX RECEIPTS AND VAT CHALLANS BESIDE LEDGER ACCOUNT S OF HAWALA DEALERS. THE AO REJECTED THE CONTENTIONS OF THE ASSESSEE ON THE GROUND THAT THE GENUINENESS OF THE PURCHASES WAS NOT PROVED AS THESE PURCHASE S REMAIN ED UNVERIFIABLE AND FINALLY AFTER REJECTING THE BOOKS OF ACCOUNTS UNDER SECTION 145(3) , APPLIED THE RATE OF 25% TH EREBY MAKING AN ADDITION OF RS.24,33,014/ - TO THE TOTAL INCOME OF THE ASSESSEE BY FRAMING AN ASSESSMENT U/S 143(3) R.W.S 147 OF THE ACT VIDE ORDER DATED 20.03.2015. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE DECISION OF CIT VS. SIMIT P. SHETH REPORTED IN 356 ITR 451 BY NOTING THAT THE ASSESSEE IS ENGAGED IN FERROUS AND NON - FERROUS TRADING AND JUSTIFIED THE ESTIMATION OF INCOME OF 12.5%. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATER IAL ON RECORD, WE OBSERVE THAT IN THIS CASE THE UNDISPUT ED FACTS ARE THAT THE ASSESSEE W AS BENEFICIARY OF HAWALA PURCHASES ENTRIES FROM SEVERAL PARTIES AS REPORTED BY THE SALES TAX DEPARTMENT, GOVT. OF RADIUM STEEL ITA NO.6293/MUM/2018 3 MAHARASHTRA. THE AO MADE ADDITION O F BOGUS PURCHASE EQ UAL TO 25% WHICH WAS REDUCED TO 12.5% BY CIT(A) AFTER FOLLOWING THE DECISION OF SIMIT P. SHETH(SUPRA). WE NOTE THAT THE LD. CIT(A) PASSED A REASONED AND SPEAKING ORDER ESPECIALLY THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE . A CCORDINGLY THE SAME IS UP HELD BY DISMISSING THE APPEAL OF THE REVENUE . 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01 . 20 20 . SD/ - SD/ - ( SAKTIJIT DEY ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 29 .01 . 2020 . RS , SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY /ASSTT. REGISTRAR, ITAT, MUMBAI. RADIUM STEEL ITA NO.6293/MUM/2018 4 DATE INITIAL WHETHER DICTATION PAD ENCLOSED WITH THE FILE : YES/NO (AS THE ORDER HAS BEEN TYPED WITH THE HELP OF MANUSCRIPT) 1. DRAFT DICTATED ON SR.PS 2. DRAFT PLACED BEFORE AUTHOR SR.PS 3. DRAFT PROPOSE D & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. DATE OF PRONOUNCEMENT SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER