RU-MET CORPORATION, MUMBAI V. ITO WD 19(3)(2), MUMBAI

ITA 6513/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4092 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6513 //201 8 (. . 2010-11 ) ITA NO. 6513/MUM/2018 (A.Y.2010-11) M/S RU- MET CORPORATION, SHOP NO. 4/5, JANKI NIWAS, GROUND FLOOR, KHADILKAR ROAD, MUMBAI 400 004 / VS. THE ITO -19(3)(2) MATRU MANDIR, TARDEO, MUMBAI 400 007 PAN/GIR NO:AAEFM7499M ( /APPELLANT) : ( / RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI AJAY PRATAP SINGH (DR) / DATE OF HEARING : 14/10/2020 / DATE OF PRONOUNCEMENT : 26/10/2020 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-6, MUMBAI [IN SHORT THE CIT(A)] DATED 15.10.2018 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM TH E RECORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON F ERROUS METALS. THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 IN THE CASE OF ASSESSEE WAS RE- OPENED ON THE BASIS OF INFORMATION RECEIVED BY DGIT (INVESTIGATION) FROM MAHARASHTRA SALES TAX DEPARTMENT THAT THE ASSESSEE HAS INDULGED IN OBTAINING ACCOMMODATION ENTRIES TO THE TUNE OF RS. 83,38,196/ - FROM HAWALA OPERATORS. 2 ITA NO .6513/MUM/2018 (A.Y.2010-11) IN RE-ASSESSMENT PROCEEDING, THE ASSESSING OFFICER ESTIMATED GROSS PROFIT ON ALLEGED BOGUS PURCHASE BILLS @ 12.5% AND MADE ADDIT ION OF RS. 10,42,275/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 17.03. 2016 PASSED UNDER SECTION 143(3) R.W.SEC. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITI ON MADE BY ASSESSING OFFICER. AGAINST THE FINDINGS OF CIT(A), THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI AJAY PRATAP SINGH REPRESENTING THE DEPARTME NT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSI NG THE APPEAL OF ASSESSEE. THE LD. DR SUBMITTED THAT THE ASSESSING O FFICER/CIT(A) HAVE ESTIMATED REASONABLE GROSS PROFIT ON BOGUS PURCHASE S MADE BY THE ASSESSING OFFICER. 4. SUBMISSIONS MADE BY LD. DR HEARD AND ORDERS OF T HE AUTHORITIES BELOW EXAMINED. THE ASSESSEE IS A TRADER IN FERROUS AND N ON-FERROUS METALS. THE ESTIMATION OF GROSS PROFIT @ 12.5% OF THE ALLEGED B OGUS PURCHASE APPEARS TO BE ON HIGHER SIDE. I AM OF CONSIDERED VIEW THAT TH E ENDS OF JUSTICE WOULD BE MET, IF GROSS PROFIT ON BOGUS PURCHASE IS RESTRICTE D TO 5%. IN VIEW OF MY ABOVE OBSERVATION, THE GROUND NO. 2.1 AND 3.1 OF THE APPE AL ARE PARTLY ALLOWED. 5. IN GROUND NO. 1.1 TO 1.4 OF THE APPEAL, THE ASSE SSEE HAS RAISED LEGAL ISSUES CHALLENGING VALIDITY OF RE-ASSESSMENT. SINCE , THE GROUND ON MERIT HAVE BEEN ADJUDICATED GRANTING RELIEF TO THE ASSESSEE, T HE LEGAL GROUNDS ARE NOT TAKEN UP FOR ADJUDICATION AT THIS STAGE. IN GROUND NO.4 OF THE APPEAL, THE 3 ITA NO .6513/MUM/2018 (A.Y.2010-11) ASSESSEE HAS RAISED ALTERNATIVE GROUND OF REDUCING GROSS PROFIT OFFERED BY THE ASSESSEE FROM GROSS PROFIT ESTIMATED BY THE ASSESSI NG OFFICER. SINCE, GROUND NO. 2.1 AND 3.1 OF THE APPEAL ARE DECIDED IN FAVOUR OF THE ASSESSEE, THE GROUND NO.4 HAS BECOME INFRUCTUOUS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY THE 26 TH DAY OF OCTOBER, 2020. SD/- ./- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, )/ DATED: 26/10/2020 S.K., PS * , * , * , * , COPY OF THE ORDER FORWARDED TO : 1. . / THE APPELLANT , 2. */ / THE RESPONDENT. 3. 0 ( )/ THE CIT(A)- 4. 0 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI