ITO 26 (3)(5), MUMBAI V. ZUBER SEHRULLAH KHAN, MUMBAI

ITA 6981/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9095 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Keywords: Bogus purchase
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 6981/MUM/2018(A.Y.2010-11) ITA NO. 6982/MUM/2018(A.Y.2011-12) INCOME TAX OFFICER 26(3)(5), ROOM NO.504,5 TH FLOOR, C-11, BANDRA KURLA COMPLEX, PRATYAKSHAKAR BHAVAN, BANDRA(E), MUMBAI 400 051 ...... APP ELLANT VS. MR. ZUBER SHRULLAH KHAN, 504, NEW DWARAKA PURI, ABOVE MOOGAVEERA CO-OP BANK, LBS MARG, KURLA(W), MUMBAI 400 070 PAN: AHTPK 6149E ..... RESPONDENT APPELLANT BY : SHRI R. BHOOPATI RESPONDENT BY : NONE DATE OF HEARING : 18/12/2019 DATE OF PRONOUNCEMENT : 06/01/2020 ORDER THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AG AINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)- 38 [IN SHO RT THE CIT(A) ],MUMBAI FOR THE ASSESSMENT YEARS 2010-11 AND 2011- 12, RESPECTIVELY. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 21/0 6/2018. SINCE THE ISSUE RAISED IN BOTH THE APPEALS IS ARISING FROM S AME SET OF FACTS AND IDENTICAL ISSUE IS INVOLVED, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATIO N AND ARE DISPOSED OF BY THIS COMPOSITE ORDER. 2 ITA NO. 6981/MUM/2018(A.Y.2010-11) ITA NO. 6982/MUM/2018(A.Y.2011-12) 2. NOTICE OF HEARING WAS SENT TO THE ASSESSEE /RESP ONDENT THROUGH RPAD ON 20/11/2019 FOR 18/12/2019. AS PER ACKNOWLE DGEMENT AVAILABLE ON RECORD, THE NOTICE OF HEARING OF APPEAL WAS DUL Y SERVED ON THE ASSESSEE. DESPITE SERVICE OF NOTICE NEITHER THE A SSESSEE NOR ANY AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS PRESE NT AT THE TIME OF HEARING OF APPEAL. THEREFORE, APPEAL WAS TAKEN UP FOR HEARING WITH THE ASSISTANCE OF LD.DEPARTMENTAL REPRESENTATIVE AND TH E MATERIAL AVAILABLE ON RECORD. 3. SHRI R. BHOOPATI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ASSESSEE IS ENGAGED IN TRADING OF IRON AND STEEL. INFORMATION WAS RECEIVED FROM DGIT(INV) WING THAT THE ASSESSEE HAS INDULGED IN PROCURING BOGUS PURCHASES BILLS FROM VARIOUS HAWALA DEALERS IN ASSE SSMENT YEAR 2010-11 AND 2011-12. THE ASSESSEE OBTAINED BOGUS PURCHAS ES BILLS TO THE TUNE OF RS.65,37,141/- IN ASSESSMENT YEAR 2010-11 AND RS. 52,39,154/- IN ASSESSMENT YEAR 2011-12. ON THE BASIS OF THE AFOR ESAID INFORMATION FROM DGIT (INV), ASSESSMENTS FOR ASSESSMENT YEAR 2010-1 1 AND 2011-12 WERE REOPENED. THE ASSESSING OFFICER IN REASSESSMENT PR OCEEDINGS, INTER-ALIA, MADE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO THE EXTENT OF12.5% OF THE BOGUS PURCHASES I.E. 8,17,143/- IN ASSESSMENT YEAR 2010-11. ON SIMILAR LINES ADDITION WAS MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2011-12 VIDE ASSESSMENT ORDER DATED 23/02/201 6 PASSED UNDER SECTION 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT), ON ACCOUNT OF BOGUS PURCHASES I.E. 6,54,894/-. THE ASSESSEE ASSAILED THE ADDITIONS IN APPEASL BEFORE THE CIT(A). THE CIT(A ) VIDE IMPUGNED ORDER RESTRICTED THE ADDITION TO THE DIFFERENCE BETWEEN N ET PROFIT DECLARED BY THE ASSESSEE AND THE GROSS PROFIT ESTIMATED BY THE ASSESSING OFFICER. 3 ITA NO. 6981/MUM/2018(A.Y.2010-11) ITA NO. 6982/MUM/2018(A.Y.2011-12) THUS, FOR ASSESSMENT YEAR 2010-11, THE CIT(A) REST RICTED THE ADDITION TO 10.33% OF THE BOGUS PURCHASES AND FOR 2011-12, THE CIT(A) RESTRICTED THE ADDITION TO 9.8% OF THE BOGUS PURCHASES. THE LD. D EPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE FINDINGS OF THE CIT(A). 4. I HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPAR TMENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUT HORITIES BELOW. THE ADDITION ON ACCOUNT OF BOGUS PURCHASES HAVE BEEN MA DE BY ASSESSING OFFICER BY ESTIMATING GROSS PROFIT @ 12.5% OF ALLE GED BOGUS PURCHASES . IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) HAS REDUCED THE ESTIMATION OF GROSS PROFIT BY THE NET PROFIT ALREADY DECLARED BY THE ASSESSEE. THE CIT(A) RESTRICTED THE THE ADDITION TO 10.33% IN ASS ESSMENT YEAR 2010-11 I.E.(12.5% - 2.17%) AND 9.80% IN ASSESSMENT YEAR 2 011-12 I.E. (12.5% - 2.70%). TAKING INTO CONSIDERATION, ENTIRETY OF FA CTS, I FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A). THE ORDER O F FIRST APPELLATE AUTHORITY IS REASONABLE AND JUSTIFIED, HENCE, THE SAME IS U PHELD. THE APPEALS OF THE REVENUE ARE WITHOUT ANY MERIT AND THE SAME ARE DISMISSED. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 06TH DAY OF JANUARY,2020. SD/- (VIKAS AWASTHY) JUDICIAL MEMBER MUMBAI, DATED 06/01/2020 VM , SR. PS(O/S) 4 ITA NO. 6981/MUM/2018(A.Y.2010-11) ITA NO. 6982/MUM/2018(A.Y.2011-12) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI