ITO WARD- 32 (1)(4), MUMBAI V. DEVENDRA P.SHETH, MUMBAI

ITA 6504/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8552 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMAL MANGAL
• Keywords: Bogus purchase
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY , JM & SHRI M.BALAGANESH, AM ITA NO. 6504 /MUM/201 8 ( ASSESSMENT YEAR : 2010 - 11 ) ITO 33(1)(4), MUMBAI VS. SHRI DEVENDRA P SHETH C - 604, PUSHPA HERITAGE DAHANUKARWADI, G OKHALE ROAD, KANDIVALI (W) MUMBAI 400067 PAN/GIR NO. ALQPS0537B (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI KAMAL MANGAL ASSESSEE BY NONE DATE OF HEARING 13 / 01 /2020 DATE OF PRONOUNCEMENT 15 / 01 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 6504/MUM/2018 FOR A.Y. 2010 - 11 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 45, MUMBAI IN APPEAL NO. CIT(A) - 45/ITO - 33(1)(4)/ITA - 324/2015 - 16 DATED 25/07/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO ITA NO .6504/MUM/2018 SHRI DEVENDRA P. SHETH 2 AS ACT) DATED 17/02/2016 BY THE LD. INCOME TAX OFFICER 33(1)(4), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). 2. THE ONLY ISS UE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE MADE ON ACCOUNT OF BOGUS PURCHASES TO 8% OF VALUE OF PURCHASES AS AGAINST 12.5% ADDED BY THE LD. AO IN THE ASSESSMENT. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL. IT IS NOT IN DISPUTE THAT ASSESSEE HAD MADE PURCHASES OF RS.60,55, 355/ - FROM CERTAIN PARTIES WHOSE NAMES APPARENTLY APPEARED IN THE LIST OF HAWALA DEALERS PREPARED BY THE MAHARASHTRA SALES TAX DEPARTMENT, WHICH INFORMATION WAS PASSED ON TO INVESTIGATION WING OF INCOME TAX DEPARTMENT WHICH ULTIMATELY TRIGGERED THE REOPENI NG OF ASSESSMENT. IT IS NOT IN DISPUTE THAT THE GOODS SO PURCHASED FROM THE ALLEGED SUPPLIERS HAVE BEEN SOLD BY THE ASSESSEE. BASED ON THIS, THE LD. AO CATEGORICALLY GAVE A FINDING THAT ASSESSEE COULD HAVE MADE PURCHASES FROM GREY MARKET AND ACCORDINGLY , B ROUGHT TO TAX THE PROFIT ELEMENT EMBEDDED IN THE VALUE OF SUCH PURCHASES AT 12.5% AND COMPLET ED THE ASSESSMENT. THE LD. CIT( A ) CONSIDERING THE INDUSTRY IN WHICH THE ASSESSEE IS INVOLVED I.E. TRADING IN IRON AND STEEL , REDUCED THE ADDITION MADE TOWARDS PRO FIT ELEMENT TO 8% FROM 12.5%. 3.1. THE LD. DR STATED THAT ASSESSEE HAD NOT PREFERRED ANY APPEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER OF THE LD. CIT(A). ACCORDINGLY, WE DEEM IT FIT AND APPROPRIATE TO HOLD THAT THE PROFIT ELEMENT IN THE INSTANT ITA NO .6504/MUM/2018 SHRI DEVENDRA P. SHETH 3 CASE SHOUL D BE RESTRICTED TO 8% WHICH HAD BEEN DONE BY THE LD. CIT(A). THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 01 /2020 SD/ - ( SAKTI JIT DEY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 01 / 2020 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//