ITO- 13(2)(3), MUMBAI, MUMBAI V. M/s. SHREE GIRIRAJ FERROMET PVT. LTD., MUMBAI

ITA 6359/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1394 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMALD
• Keywords: Bogus purchase
• Section: 143(3); 13

Judgement Text

1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.6359/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER - 13 ( 2 )(3) ROOM NO.146 B, 1 ST FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020 / VS. M/S. SHREE GIRIRAJ FERROMET PVT.LTD. B-2/203, BREEZY CORNER MAHAVIR NAGAR, KANDIVALI (W) MUMBAI-400 067 !' ./ ./PAN/GIR NO. AALCS-7860-E ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : MS. SMITA VERMA-LD. DR / DATE OF HEARING : 05/07/2021 / DATE OF PRONOUNCEMENT : 05/07/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR AY 2010-11 CONTE ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2 1 MUMBAI [CIT(A)] DATED 28/06/2019 WHICH HAS GRANTED PARTIAL RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2. AT THE TIME OF HEARING, NONE APPEARED FOR ASSESS EE. HOWEVER, THE MATERIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF THE 2 APPEAL. THE LD. DR PLEADED FOR RESTORATION OF ASSES SMENT AS FRAMED BY LD. AO U/S 143(3) R.W.S. 147 ON 22/12/201 7. THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE IS STATE D TO BE ENGAGED IN TRADING OF IRON & STEEL. 3. THE MATERIAL FACTS ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, PURSUANT TO RECEIPT OF CERTAIN INFORMA TION FROM SALES TAX DEPARTMENT, MAHARASHTRA, IT TRANSPIRED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASES OF RS.62.66 LACS FROM AN ENTITY NAMELY M/S SHREE RAM STEEL. THE ASSESSEE FAILED TO PRODUCE THE SUPPLIER FOR CONFIRMATION OF TRANSACTION. THE ASSES SEE, IN SUPPORT OF PURCHASE TRANSACTIONS, FURNISHED COPY OF PURCHASE I NVOICES AND LEDGER EXTRACTS. THE ASSESSEE ALSO SUBMITTED THAT T HE GOODS PURCHASED FROM THE SAID SUPPLIER WERE REJECTED AND RETURNED BACK IN SUBSEQUENT YEAR. HOWEVER, FINDING THAT THE ASSES SEE COULD NOT DISCHARG THE PRIMARY ONUS OF SUBSTANTIATING THE PUR CHASES, LD. AO ESTIMATED ON ADDITION OF 12.5% AGAINST THESE PURCHA SES. 4. THE LD. CIT(A) OBSERVED THAT THE ISSUE OF BOGUS PURCHASES WAS RECURRING IN NATURE AND IN AY 2009-10, THE ADDI TION WAS ESTIMATED @4% DURING APPELLATE PROCEEDINGS. THE APP ELLATE ORDER WAS SUBSEQUENTLY CONFIRMED BY TRIBUNAL. THEREFORE, CONSIDERING THE GROSS PROFIT RATE OF 3.90% AND CONSIDERING THE FACT THAT VAT RATE ON IRON & STEEL WAS 4%, THE ESTIMATION OF 12.5 % WAS ON THE HIGHER SIDE. THE SAME WAS, ACCORDINGLY, REDUCED TO 7%. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. GOING BY THE FACTUAL MATRIX, WE FIND NO INFIRMIT Y IN THE ESTIMATION MADE BY LD. CIT(A) SINCE THE SAME WAS IN LINE WITH ESTIMATION MADE IN EARLIER YEAR. THE APPELLATE ORDE R FOR AY 2009-10 3 WAS CONFIRMED BY TRIBUNAL. THE ASSESSEE REFLECTED G P RATE OF 3.90% DURING THE YEAR. CONSIDERING ALL THESE FACTS, THE ESTIMATION OF 7% WAS QUITE FAIR & REASONABLE. BY CONFIRMING TH E SAME, WE DISMISS THE APPEAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 05 TH JULY, 2021. SD/- SD/- (AMARJIT SINGH) (MANOJ K UMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 05/07/2021 SR.PS, JAISY VARGHESE !'#' / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. -.%/ , / , / DR, ITAT, MUMBAI 6. .012 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.