ITO 26 (2)(3), MUMBAI V. MOHD.FARROQUE MOHD. YAKUB KHAN, MUMBAI

ITA 7055/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0635 (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: 2011-2012
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA
• 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 & . ,#$#% SHRI G.MANJUNATHA, ACCOUNTANT MEMBER . 7054& 7055 / /2018(. 2010-11 &2011-12 ) ITA NO.7054 & 7055/MUM/2018(A.Y.2010-11 & 2011-12) ITO -26(2)(3), BUILDING NO.C-11, 7 TH FLOOR, ROOM NO.711, PRAYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E) MUMBAI 400 051 ...... - / APPELLANT VS. SHRI MOHD FARROQUE MOHD YAKUB KHAN, PROP. OF M/S. UNIVERSAL TUBES, R.NO.18, B BLOCK, HAROON BUILDING, 3 RD FLOOR,L NEW MILL ROAD, KURLA (W), MUMBAI 400 070 PAN:ARIPK9317M ..... .// 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: THESE APPEALS BY THE REVENUE ARE DIRECTED AGAI NST THE ORDERS OF COMMISSIONER OF INCOME TAX(APPEALS)-38, MUMBAI (IN SHORT THE CIT(A)) FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12, RES PECTIVELY. BOTH THE 2 ITA NO.7054 & 7055/MUM/2018(A.Y.2010-11 & 2011-1 2) IMPUGNED ORDERS ARE OF EVEN DATE I.E. 29/06/2018. S INCE THE FACTS IN BOTH THE IMPUGNED ASSESSMENT YEARS ARE SIMILAR AND THE GROUN DS RAISED BY THE REVENUE IN BOTH THE APPEALS ARE IDENTICAL, THESE APPEALS AR E TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED VIDE THIS COMMON ORDER . HOWEVER, FOR THE SAKE OF CONVENIENCE THE FACTS ARE NARRATED FROM THE APPEAL FOR ASSESSMENT YEAR 2010-11. ITA NO.7054/MUM/2018 (A.Y. 2010-11) 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN M.S SEAM LESS PIPES AND OTHER TYPES OF PIPES. THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEI VED FROM THE INVESTIGATION WING OF THE DEPARTMENT. AS PER THE INFORMATION REC EIVED, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS.1,2 5,07,379/- FROM THE DECLARED HAWALA DEALERS. THE ASSESSING OFFICER MAD E ADDITION TO THE EXTENT OF 12.5% OF THE ALLEGED BOGUS PURCHASES. AGGRIEVED AG AINST THE ASSESSMENT ORDER DATED 04/03/2016 PASSED UNDER SECTION 143(3) R.W. S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ), THE ASSESSEE FIL ED APPEAL BEFORE THE CIT(A). THE FIRST APPELLATE AUTHORITY AFTER CONSIDERING THE FAC TS OF THE CASE, MATERIAL AVAILABLE ON RECORD AND THE DECISION OF THE HONBL E GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH REPORTED AS 356 ITR 451 RESTRICTED THE DISALLOWANCE TO 9.5% OF THE ALLEGED BOGUS PURCHASES . AGAINST THE AFORESAID FINDINGS OF THE CIT(A), THE REVENUE IS IN APPEAL BE FORE THE CIT(A). 3 MS. R. KAVITHA, REPRESENTING THE DEPARTMENT SUBMITTED THAT ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS FROM THE DECLARED HAWALA DEALERS. THE ASSESSEE FAILED TO FURNISH DOCUMENTARY EVIDENCES/DE TAILS TO SUBSTANTIATE 3 ITA NO.7054 & 7055/MUM/2018(A.Y.2010-11 & 2011-1 2) GENUINENESS OF THE PURCHASES. NEITHER THE PARTIES FROM WHOM ALLEGED PURCHASES MADE WERE PRODUCED NOR THE TRAIL OF GOO DS WAS SHOWN BY ASSESSEE BEFORE THE ASSESSING OFFICER. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER WAS JUSTIFIED AND REASON ABLE IN ESTIMATING G.P ON IMPUGNED PURCHASES @12.5%. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPART MENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDER OF AUTHO RITIES BELOW. THE ASSESSEE HAD ALLEGEDLY OBTAINED BILLS AMOUNTING TO RS.1,25,07,379/- FROM HAWALA DEALERS. THE ASSESSING OFFICER ESTIMATED G.P @12.5% ON SUCH PURCHASES. THE CIT(A) AFTER CONSIDERING THE NET PR OFIT DECLARED BY THE ASSESSEE, REDUCED THE SAME FROM GP ESTIMATED BY ASS ESSING OFFICER. HENCE, THE CIT(A) RESTRICTED THE ADDITION TO 9.30% OF THE ALLEGED TOTAL BOGUS PURCHASES. WE DO NOT FIND ANY INFIRMITY IN THE IMPU GNED ORDER, HENCE, THE SAME IS UPHELD AND THE APPEAL OF THE REVENUE IS DIS MISSED BEING DEVOID OF ANY MERIT. ITA NO.7055/MUM/2018 (A.Y. 2011-12): 5. THE FACTS IN THE ASSESSMENT YEAR 2011-12 ARE I DENTICAL TO THE FACTS IN ASSESSMENT YEAR 2010-11, EXCEPT FOR THE AMOUNT OF ADDITION. THE ASSESSING OFFICER IN ASSESSMENT YEAR 2011-12 MADE ADDITION OF RS.4,72,039/- BY ESTIMATING GP @ 12.5% ON TOTAL BOGUS PURCHASES OF R S.37,76,309/-. THE CIT(A) REDUCED THE GP ESTIMATED BY ASSESSING OFFICER BY TH E NET PROFIT RATIO DECLARED BY THE ASSESSEE AND RESTRICTED THE DISALLOWANCE TO 9.28% OF THE TOTAL ALLEGED BOGUS PURCHASES. SINCE THE FACTS ARE SIMILAR AN D THE GROUNDS RAISED BY THE REVENUE ASSAILING FINDINGS OF CIT(A) ARE IDENTICAL TO THE ONE RAISED IN 2010-11, THE FINDINGS GIVEN WHILE ADJUDICATING THE APPEAL OF THE REVENUE FOR ASSESSMENT 4 ITA NO.7054 & 7055/MUM/2018(A.Y.2010-11 & 2011-1 2) YEAR 2010-11 WOULD MUTATIS MUTANDIS APPLY TO THE A SSESSMENT YEAR 2011-12 AS WELL. FOR THE SIMILAR REASONS, THE APPEAL OF TH E REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 6. IN THE RESULT, BOTH THE APPEALS BY REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY TH E 20TH DAY OF MARCH, 2020. SD/- SD/- (G.MANJUNATHA) (VIKAS AW ASTHY) #$ / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 6/ DATED 20/03/2020 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