ITO, WARD 3 (4), THANE V. SANJAY BHOGILAL SHAH, DOMBIVALI

ITA 6763/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3844 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase; Onus to prove
• Section: 143(3); 250

Judgement Text

P , , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6763 / / 2019 (%. 2010-11 ) ITA NO.6763/MUM/2019(A.Y 2010-11) INCOME TAX OFFICER, WARD 3(4), THANE, 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN, DIST. THANE 421 301. ...... ' / APPELLANT % VS. SHRI SANJAY BHOGILAL SHAH, PROP. OF M/S. YASH RAJ STEEL, C-312, GANESH DARSHAN, VEER SAVARKAR ROAD, NEHRU ROAD, DOMBIVLI(E) PAN:AVZPS-2981-G ..... ()/ RESPONDENT '*/ APPELLANT BY : SHRI SANJAY J. SETHI ()*/ RESPONDENT BY : NONE %+) / DATE OF HEARING : 19/07/2021 ,-. +) / DATE OF PRONOUNCEMENT : 04/10/2021 / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -1, THANE [IN SHORT THE C IT(A)] DATED 19/08/2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM R ECORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON-FERROUS METAL S. THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 IN THE CASE OF ASSESSEE WA S REOPENED ON THE BASIS OF 2 ITA NO.6763/MUM/2019(A.Y 2010-11) INFORMATION RECEIVED FROM DGIT(INVESTIGATION), PUNE . AS PER INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGR EGATING TO RS.3,18,276/- FROM SHRADHHA TRADING CO.(RS.1,63,302/-) AND SUN ENTERPR ISES (RS.1,55,974/-). BOTH THE AFORESAID PARTIES WERE DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASTHRA. DURING ASSESSMENT PRO CEEDINGS THE ASSESSEE FAILED TO DISCHARGE HIS ONUS TO PROVE GENUINENESS OF AFORE SAID DEALERS AND PURCHASES MADE FROM THEM. THUS, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE BOGUS PURCHASES. AGAINST THE ASSESSMENT ORDER DATED 13/02/2015 PASS ED UNDER SECTION 143(3) R.W.S. 147 OF INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'), THE ASSESSEE FIELD APPEAL BEFORE THE CIT(A). THE CIT(A) RESTRICTED THE DISAL LOWANCE OF BOGUS PURCHASES TO RS.39,785/- BY ESTIMATING SUPPRESSED PROFIT MARGIN ON BOGUS PURCHASES AT 12.5%. NOW, THE REVENUE IS IN APPEAL AGAINST THE RELIEF GR ANTED BY THE CIT(A). 3. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMEN T VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE F INDINGS OF CIT(A). IN SUPPORT OF HIS SUBMISSIONS THE LD. DEPARTMENTAL RE PRESENTATIVE PLACED RELIANCE ON THE DECISION OF N.K. PROTEINS LTD. VS. DCIT REPORTED AS 250 TAXMAN 22(SC). 4. SUBMISSIONS MADE BY LD. DEPARTMENTAL REPRESENTAT IVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSES SEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE DEALERS AND TH E PURCHASES MADE FROM THE SAID DEALERS. AT THE SAME TIME IT IS OBSERVED THAT THE ASSESSING OFFICER HAS ACCEPTED THE SALES TURNOVER DECLARED BY THE ASSESSE E. WITHOUT PURCHASES THERE CANNOT BE SALES. IT IS ONLY THE PROFIT MARGI N EMBEDDED IN SUCH LIKE TRANSACTIONS THAT CAN BE BROUGHT TO TAX. [ RE: PCIT VS. PARAMSHAKHTI 3 ITA NO.6763/MUM/2019(A.Y 2010-11) DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO.413 OF 2017 DECIDED ON 15/07/2019 BY HON'BLE BOMBAY HIGH COURT ]. IN THE FACTS OF THE CASE, THE ASSESSING OFFICER HAS ERRED IN MAKING DISALLOWANCE OF ENTIRE BOGUS PURCHASES. THE CIT(A) HAS ESTIMATED SUPPRESSED PROFIT MARGIN ON A LLEGED BOGUS PURCHASES @12.5% AS AGAINST G.P OF 5.47% DECLARED BY THE ASSESSEE. I FIND NO REASON TO INTERFERE WITH THE FINDING OF CIT(A), HENCE, THE IMPUGNED ORDER IS UP HELD AND APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 5. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY THE 04 TH DAY OF OCTOBER, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED 04/10/2021 VM , SR. PS (O/S) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23()% , . . . , / DR, ITAT, MUMBAI 6. 34567 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI