ITO 19 (1)(2), MUMBAI V. BABULAL JETHARAMJI VISHNOI, MUMBAI

ITA 6974/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8557 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 06-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , JM & SHRI M.BALAGANESH, AM ITA NO. 6974 /MUM/201 8 ( ASSESSMENT YEAR : 2010 - 11 ) ITO 19(1)(2), MUMBAI ROOM NO.204, 2 ND FLOOR MATHRU MANDIR TARDEO ROAD MUMBAI 400 00 7 VS. SHRI BABULAL JETHARAMJI VISHNOI R.NO.4, GR. FLOOR 91/95, MUKUND BHAVAN 3 RD KUMBHARWADA LANE MUMBAI 400 004 PAN/GIR NO. AEIPV2812H (APPELLANT ) .. (RESPONDENT ) REVENUE BY MS. KAVITA P. KAUSHIK ASSESSEE BY SHRI SATISH R MODY DATE OF HEARING 09 / 01/ 2020 DATE OF PRONOUNCEMENT 15 / 01 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 6974/MUM/2018 FOR A.Y. 2010 - 11 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 54, MUMBAI IN APPEAL NO. CIT(A) - 30/IT - 964/ITO - 19(1)(2)/2016 - 17 DATED 28/09/2018 (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 AS ACT) DATED 27/02/2016 BY THE LD. INCOME TAX OFFICER 19(1)(2) , MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO. 6974/MUM/2018 SHRI BABULAL JETHARAMJI VISHNOI 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE LD. AO TO ALLOW SET OFF OF THE GROSS PROFIT ALREADY SHOWN BY THE ASSESSEE FROM THE ADDITION OF PROF IT RATE AT 12.5% ON ACCOUNT OF BOGUS PURCHASE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT ASSESSEE IS AN INDIVIDUAL RUNNING PROPRIETARY CONCERN IN THE NAME OF M/S. ROSHAN STEEL INDIA ENGAGED IN THE BUSI NESS OF TRADING IN FERROUS AND NON - FERROUS METALS. WE FIND THAT ASSESSEE HAD MADE CERTAIN PURCHASES FROM CERTAIN SUPPLIERS TOTALLING TO RS.80,93,141/ - WHOSE NAMES APPEARED IN THE LIST OF HAVALA DEALERS PUBLISHED BY THE MAHARASHTRA SALES TAX DEPARTMENT AND SAID INFORMATION WAS PASSED ON TO INCOME TAX INVESTIGATION WING WHICH ULTIMATELY TRIGGERED THE REOPENING OF THE ASSESSMENT IN THE CASE OF THE ASSESSEE. 3.1. WE FIND THAT THE LD. AO TOOK DUE COGNIZANCE OF THE FACT OF VARIOUS DOCUMENTS SUBMITTED BY THE ASSE SSEE TO SUPPORT AFORESAID PURCHASES MADE TO THE TUNE OF RS.80,93,141/ - AND ULTIMATELY CONCLUDED THAT THE PURCHASES WERE INDEED ACTUALLY MADE BY THE ASSESSEE FROM GREY MARKET AND SALES WERE ALSO MADE AND DISCLOSED OUT OF SUCH PURCHASES. ACCORDINGLY, ONLY TH E PROFIT ELEMENT COULD BE BROUGHT TO TAX THEREON. THE LD. AO ESTIMATED THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES AT 12.5% AND MADE AN ADDITION OF RS.10,11,643/ - IN THE ASSESSMENT. WE FIND THAT THE LD. CIT(A) UPHELD THE ESTIMATED PERCENTAGE OF 12.5% AS PROFIT ELEMENT BUT GRANTED PARTIAL RELIEF TO THE ASSESSEE BY DIRECTING THE LD. AO TO REDUCE THE GROSS PROFIT ALREADY DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FROM THE AFORESAID ESTIMATED PROFIT OF 12.5%. AGGRIEVED BY THIS ACTION, THE REVENUE IS IN APPEAL BEFORE US. BOTH THE PARTIES BEFORE ITA NO. 6974/MUM/2018 SHRI BABULAL JETHARAMJI VISHNOI 3 US SUBMITTED THAT NO APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ACTION OF THE LD. CIT(A) BEFORE THIS TRIBUNAL. C ONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES , WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD CITA IN THIS REGARD. 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/ - ( MAHAVIR SINGH ) 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//