GANPAT METALS PVT. LTD., MUMBAI V. ITO 5 (1)(2), MUMBAI

ITA 6427/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1764 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 07-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3); 133(6); 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6427 //2019 (. . 2009-10 ) ITA NO.6427/MUM/2019 (A.Y.2009-10) M/S GANPATI METALS PVT. LTD. SHOP NO.3, CIGRATWALA BUILDING, 364, S.V.P. ROAD, MUMBAI-400004. PAN: AACCG3300Q ...... ) / APPELLANT VS. ITO 5(1)(2) ROOM NO. 21, 3 RD FLOOR, B WING, MITTAL COURT, NARIMAN POINT, MUMBAI-40002 ..... *,/ RESPONDENT ) -/ APPELLANT BY : NONE *, -/ RESPONDENT BY : MS. SMITA VERMA . / DATE OF HEARING : 04/05/2021 . / DATE OF PRONOUNCEMENT : 10/06/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-10, MUMBAI [HE REINAFTER REFERRED TO AS THE CIT(A)] DATED 29.07.2019 FOR THE ASSESSMENT Y EAR (AY) 2009-10. 2 . 6427 //2019 (. .2009-10 ) ITA NO.6427/MUM/2019 (A.Y.2009-10) 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS A TRADER IN FERROUS AND NON-FERROUS METAL. ASSES SMENT IN THE CASE OF ASSESSEE FOR AY 2009-10 WAS RE-OPENED ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARA SHTRA. AS PER THE INFORMATION RECEIVED, ASSESSEE HAS OBTAINED BOGUS P URCHASE BILLS AGGREGATING TO RS. 84,38,977/- FROM SIX DEALERS DECLARED AS HAW ALA OPERATORS. THE ASSESSING OFFICER (AO) ISSUED NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) TO THE SAID DEALERS ON THE ADDRESSES FURNISHED BY THE ASSESSEE. THE NOTICES WERE RECEIVE D BACK UNSERVED FROM THE POSTAL AUTHORITIES. NO TRANSPORT RECEIPTS, INWARD R EGISTER AND STOCK REGISTER, ETC. WERE PRODUCED BY THE ASSESSEE TO PROVE TRAIL O F GOODS. THE AO ESTIMATED GROSS PROFIT (GP) AT 12.5% ON BOGUS PURCHASES AND M ADE ADDITION OF RS. 10,54,872/-. AGGRIEVED BY THE ASSESSMENT ORDER DATED 27.03.2015 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT, TH E ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF ASSESSEEE AND CONFIRMED THE ADDITION. HENCE, THE PRESENT APPEAL BY 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. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO PROVE GENUINENESS OF THE PURCHASES AND THE DEALERS. THE AO AND CIT(A) HAVE B EEN FAIR AND REASONABLY IN ESTIMATING PROFIT EMBEDDED IN NON-GENUINE PURCHASES . 3 . 6427 //2019 (. .2009-10 ) ITA NO.6427/MUM/2019 (A.Y.2009-10) 4. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF PURCHASES FROM ALLEGED HAWAL A DEALERS. UNDER SUCH CIRCUMSTANCES, ENTIRE ALLEGED BOGUS PURCHASES CANNO T BE ADDED. IT IS ONLY THE PROFIT EMBEDDED IN SUCH TRANSACTIONS THAT HAS TO BE BROUGHT TO TAX. THE ASSESSEE IS A TRADER IN FERROUS AND NON-FERROUS MET ALS. GENERALLY, THE GP IN SUCH BUSINESS IS RANGES BETWEEN 5% TO 8%. ESTIMATIO N OF GP AT 12.5% BY AO/CIT(A) IS ON HIGHER SIDE. THE ESTIMATION OF GP A T 6% ON BOGUS PURCHASE WOULD MEET THE ENDS OF JUSTICE. THE IMPUGNED ORDER IS MODIFIED ACCORDINGLY. THE GROUND NO. 3 & 4 OF APPEAL ARE PARTLY ALLOWED I N THE AFORESAID TERMS. 5. IN GROUND NO. 1 & 2 OF APPEAL, THE ASSESSEE HAS ASSAILED RE-OPENING OF ASSESSMENT UNDER SECTION 148 OF THE ACT. THE ASSESS EE HAD ASSAILED RE-OPENING OF ASSESSMENT BEFORE THE CIT(A), AS WELL BUT REMAIN ED UNSUCCESSFUL. I FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A), HE NCE, THE SAME ARE UPHELD. CONSEQUENTLY, GROUND NO. 1 & 2 OF THE APPEAL ARE DI SMISSED. 6. THE ASSESSEE IN APPEAL HAS ALSO ASSAILED INITIAT ION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. CHALLENGE TO THE PENA LTY PROCEEDING AT THIS STAGE IS PREMATURE, THEREFORE, GROUND NO.5 OF THE APPEAL IS DISMISSED. 7. IN GROUND NO.6 OF APPEAL, THE ASSESSEE HAS CHALL ENGED CHARGING OF INTEREST UNDER SECTION 234A, 234B, 234C & 234D OF T HE ACT. CHARGING OF INTEREST IS MANDATORY AND CONSEQUENTIAL, HENCE, THI S GROUND IS WITHOUT ANY MERIT, ERGO, DISMISSED. 4 . 6427 //2019 (. .2009-10 ) ITA NO.6427/MUM/2019 (A.Y.2009-10) 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 10 TH DAY OF JUNE, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3/ DATED: 10/06/2021 SK, PS * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *, / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI