ITO WARD (1)(4), THANE V. SHRI. ISHWARLAL KANJI PATEL, THANE

ITA 6467/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0344 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6467 //20 19 (. . 2010-11 ) ITA NO.6467/MUM/2019 (A.Y.2010-11) ITO, WARD-1(4), ROOM NO. 11, 6 TH FLOOR, B-WING, WAGALE INDUSTRIAL ESTATE, THANE (W)-400604. ...... ' / APPELLANT VS. SHRI ISHWARLAL KANJI PATEL SHOP NO.04, DHANLAXMI SHOPPING CENTRE, TUTU ESTATE, HIRANANDANI ROAD, MUMBAI-400607. PAN: AQSPP2211L .. ... (*/ RESPONDENT ' +/ APPELLANT BY : MS. SMITA VERMA (* +/ RESPONDENT BY : NONE , / DATE OF HEARING : 06/05/2021 , / DATE OF PRONOUNCEMENT : 12/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE [HERE INAFTER REFERRED TO AS THE CIT(A)] DATED 15.07.2019 FOR THE ASSESSMENT Y EAR (AY) 2010-11. 2. MS. SMITA VERMA REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE ASSESSEE IS RESELLER OF PLYWOOD, LAMINATES, FLUSH D OORS, PANEL DOORS, TIMBER, 2 . 6467 //20 19 (. .2010-11 ) ITA NO.6467/MUM/2019 (A.Y.2010-11) ETC. THE ASSESSMENT FOR THE AY 2010-11 IN THE CASE OF ASSESSEE WAS REOPENED ON THE GROUND THAT THE ASSESSEE IS BENEFICIARY OF A CCOMMODATION ENTRIES OBTAINED FROM HAWALA OPERATORS. DURING THE COURSE O F ASSESSMENT, THE ASSESSING OFFICER (AO) HELD THAT THE ASSESSEE HAS O BTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS. 15,94,119/- FROM THREE HAWALA DE ALERS. THE ASSESSEE COULD NEITHER PROVE GENUINENESS OF THE DEALERS NOR THE PU RCHASES MADE FROM THEM. THE NOTICE ISSUED UNDER SECTION 133(6) OF THE INCOM E TACT ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT] BY THE AO TO THE AFORESAID DEALERS WERE RECEIVED BACK UNSERVED FROM POSTAL AUTHORITIES WITH REMARKS NOT KNOWN. NO CONFIRMATIONS FROM THE DEALERS WERE EITHER FILED BY THE ASSESSEE. FURTHER, THE ASSESSEE FAILED TO FURNISH DOCUMENTARY EVIDENCE TO PROVE TRAIL OF GOODS, HENCE, THE AO MADE ADDITION OF THE ENTIRE BOGUS PURCHASES. IN FIRST APPELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO 12.5%. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) PLACING RELIANCE ON THE JUDGMENT OF HONBLE SUPREME COURT OF INDIA IN THE C ASE OF N.K. PROTEINS LTD. V/S DCIT [84 TAXMANN.COM 195] PRAYED FOR UPHOLDING ASSESSMENT ORDER. 3. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF THE AUTHORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISC HARGE HIS ONUS IN PROVING AUTHENTICITY OF THE DEALERS AND GENUINENESS OF THE PURCHASES MADE FROM THEM. AT THE SAME TIME, IT IS OBSERVED THAT THE AO HAS NO T DISPUTED SALES TURNOVER DECLARED BY THE ASSESSEE. UNDER SUCH CIRCUMSTANCES, ENTIRE BOGUS PURCHASES CANNOT BE ADDED. IT IS ONLY THE PROFIT ELEMENT EMBE DDED IN SUCH PURCHASES THAT CAN BE BROUGHT TO TAX ( RE: PCIT VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO. 413 OF 2017 DECIDED ON 15.07. 2019 ). THE CIT(A) AFTER EXAMINING THE FACTS HAS RESTRICTED THE ADDITION ON ACCOUNT OF BOGUS PURCHASES 3 . 6467 //20 19 (. .2010-11 ) ITA NO.6467/MUM/2019 (A.Y.2010-11) TO RS. 1,99,265/- BY ESTIMATING GROSS PROFIT (GP) A T 12.5%. I FIND NO INFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAME IS UPHELD AND A PPEAL OF THE REVENUE IS DISMISSED, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY , THE 12 TH DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 1/ DATED: 12/07/2021 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