ITO 26 (2)(1), MUMBAI V. KUTUBBUDDIN Z. BHOPALWALA, MUMBAI

ITA 7047/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0636 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & . ,#$#% SHRI G.MANJUNATHA, ACCOUNTANT MEMBER . 7047 / /2018(.) ITA NO.7047/MUM/2018(A.Y.2010-11) ITO -26(2)(1) BUILDING NO.C-11, 7 TH FLOOR, ROOM NO.709, PRAYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E) MUMBAI 400 051 ...... - / APPELLANT VS. SHRI KUTUBDDIN Z. BHOPALWALA, PROP. JAMALI SCREEN PRINTER,A-102, MAIMOON MANZIL CHS,SAIFEE PARK CHURCH ROAD, MAROL, ANDHERI (E), MUMBAI 400 059 PAN:AEWPB2552A ..... .// RESPONDENT -0/ APPELLANT BY : MS. R.KAVITHA ./0/ RESPONDENT BY : NONE 1/ / DATE OF HEARING : 17/02/2020 234 1/ / DATE OF PRONOUNCEMENT : 20/03/2020 #/ ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-38, MUMBAI (IN SHORT CIT(A)) DATED 26/06/2018 FOR THE ASSESSMENT YEAR 2010-11. 2 ITA NO.7047/MUM/2018(A.Y.2010-11) 2. NOTICE OF APPEAL WAS SENT TO THE ASSESSEE THROUG H RPAD. THE ACKNOWLEDGEMENT CARD AVAILABLE ON RECORD SHOWS THAT THE NOTICE WAS DULY SERVED ON THE ASSESSEE . DESPITE SERVICE OF NOTICE , NEITHER THE ASSESSEE NOR ANY AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS PRESENT IN THE COURT. IT SEEMS THAT THE ASSESSEE IS NOT KEEN PURSUE THE APP EAL. UNDER SUCH CIRCUMSTANCES WE ARE CONSTRAINED TO TAKE UP THE APP EAL FOR ADJUDICATION WITH THE ASSISTANCE OF LD. DEPARTMENTAL REPRESENTATIVE A ND THE MATERIAL AVAILABLE ON RECORD. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SCREEN PRINT ING & OFFSET PRINTING JOB WORK ON CONTRACT BASIS, ETC. THE ASSESSMENT FOR ASS ESSMENT YEAR 2010-11 WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF I NFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT. AS PER T HE INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGR EGATING TO RS.6,57,188/- FROM THE DECLARED HAWALA DEALERS. THE ASSESSING OF FICER MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 23/12/2015 PASSED UNDER SECTION 143(3) R.W.S. 147 O F THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ) THE ASSESSEE FILED APP EAL BEFORE THE CIT(A). THE FIRST APPELLATE AUTHORITY AFTER CONSIDERING THE FACTS OF THE CASE, MATERIAL AVAILABLE ON RECORD AND THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REPORTED AS 356 ITR 451 RESTRICT ED THE DISALLOWANCE TO 20% OF THE ALLEGED BOGUS PURCHASES. AGAINST THE AFORESAID FINDINGS OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. MS. R.KAVITHA, REPRESENTING THE DEPARTMENT SUBM ITTED THAT THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS FROM THE HAWALA DEALERS. THE ASSESSEE FAILED TO FURNISH DOCUMENTARY EVIDENCES/DE TAILS TO SUBSTANTIATE 3 ITA NO.7047/MUM/2018(A.Y.2010-11) GENUINENESS OF THE PURCHASES. NEITHER THE PARTIES FROM WHOM ALLEGED PURCHASES MADE WERE PRODUCED NOR QUANTITATIVE DETAI LS OF THE STOCK AND THE TRAIL OF GOODS WAS FURNISHED BY ASSESSEE BEFORE THE ASSESSING OFFICER. THUS, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE UNPROVED/SUSPICIOUS PURCHASES. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPART MENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDERS OF AUTH ORITIES BELOW. THE ASSESSEE HAD ALLEGEDLY OBTAINED BILLS AMOUNTING TO RS.6,57,188/- FROM HAWALA DEALERS. THE ASSESSING OFFICER MADE ADDITION OF 10 0% OF SUCH BOGUS PURCHASES. IT IS NOW A WELL SETTLED LEGAL PROPOSIT ION THAT THE ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED, IT IS ONLY THE PRO FIT ELEMENT EMBEDDED IN SUCH ALLEGED BOGUS PURCHASES THAT HAS TO BE BROUGHT TO TAX. THE REVENUE HAS NOT RAISED ANY DOUBT OVER THE TURNOVER OF THE ASSES SEE. THUS, WITHOUT INPUTS THERE CANNOT BE PRODUCTION AND PROCESSING. THE CIT (A) AFTER CONSIDERING ALL THESE FACTS AND THE GP DECLARED BY THE ASSESSEE IN THE PRECEDING ASSESSMENT YEAR ESTIMATED GP ON THE ALLEGED BOGUS PURCHASES @ 20%. WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAM E IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT . 6. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 20TH DAY OF MARCH, 2020. SD/- SD/- (G.MANJUNATHA) (VIKAS AW ASTHY) #$ / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 6/ DATED 20/03/2020 4 ITA NO.7047/MUM/2018(A.Y.2010-11) VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. - / THE APPELLANT , 2. ./ / THE RESPONDENT. 3. 7/ ( )/ THE CIT(A)- 4. 7/ CIT 5. 89./ , . . . , / DR, ITAT, MUMBAI 6. 9:;<= / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI