DILIP J BOKADIA, MUMBAI V. ITO 19 (1)(4), MUMBAI

ITA 7167/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0346 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 133(6); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 7167 //20 19 (. . 2010-11 ) ITA NO.7167/MUM/2019 (A.Y.2010-11) DILIP J. BOKADIA, PROP. OF NISHANT METAL, ROOM NO.48, 3 RD FLOOR, BANSI BHAVAN, 3 RD KHETWADI LANE, MUMBAI-400004. PAN: AIIPB2434K ...... ' / APPELLANT VS. ITO-19(1)(4) INCOME TAX OFFICE, MATRU MANDIR, TARDEO ROAD, MUMBAI-400007. ..... (*/ RESPONDENT ' +/ APPELLANT BY : NONE (* +/ RESPONDENT BY : MS. SMITA VERMA , / DATE OF HEARING : 06/05/2021 , / DATE OF PRONOUNCEMENT : 12/07/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-30, MUMBAI [HEREINAFTER REFERR ED TO AS THE CIT(A)] DATED 28.08.2019 FOR THE ASSESSMENT YEAR (AY) 2010- 11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON-FERROUS ME TALS. THE ASSESSMENT FOR 2 . 7167 //20 19 ( . .2010-11 ) ITA NO.7167/MUM/2019 (A.Y.2010-11) THE ASSESSMENT YEAR (AY) 2010-11 IN THE CASE OF ASS ESSEE WAS RE-OPENED ON THE GROUND THAT THE ASSESSEE HAS INDULGED IN OBTAIN ING BOGUS PURCHASE BILLS AGGREGATING TO RS. 2,99,86,362/- FROM VARIOUS (8) D EALERS, DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT O F MAHARASHTRA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) ISSUED NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 [H EREINAFTER REFERRED TO AS THE ACT] TO THE SUSPICIOUS DEALERS FROM WHOM THE ASSESSEE HAD ALLEGEDLY OBTAINED ACCOMMODATION ENTRIES. THE NOTICES WERE RE TURNED BACK UNSERVED BY THE POSTAL AUTHORITY WITH REMARKS NOT KNOWN OR NO SUCH ADDRESS OR LEFT. NO CONFIRMATIONS FROM THE DEALERS WERE EITH ER PRODUCED BY THE ASSESSEE. FURTHER, THE ASSESSEE FAILED TO FURNISH D OCUMENTS SUCH AS TRANSPORT RECEIPTS, OCTROI RECEIPTS, DELIVERY CHALLENS, STOCK REGISTER, ETC. TO PROVE TRAIL OF GOODS. THE AO ESTIMATED GROSS PROFIT (GP) @ 12.5% O N NON-GENUINE PURCHASES AND MADE ADDITION OF RS. 37,48,295/-. AGGRIEVED BY THE ASSESSMENT ORDER DATED 04.03.2016 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT, TH E ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) NOT ONLY UPHELD THE F INDINGS OF AO WITH REGARD TO ASSESSEES INVOLVEMENT IN OBTAINING BOGUS PURCHASE BILLS BUT ENHANCED THE DISALLOWANCE TO 100% OF THE ALLEGED BOGUS PURCHASES . HENCE, THE PRESENT APPEAL BY THE ASSESSEE. 3. MS. SMITA VERMA REPRESENTING THE DEPARTMENT VEHE MENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT SINCE THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE DE ALERS AND PURCHASES MADE FROM THEM DURING THE PERIOD RELEVANT TO AY UNDER AP PEAL, THE CIT(A) MADE 100% DISALLOWANCE OF THE BOGUS PURCHASES. THE LD. D R PLACED RELIANCE ON THE 3 . 7167 //20 19 (. .2010-11 ) ITA NO.7167/MUM/2019 (A.Y.2010-11) DECISION OF HONBLE SUPREME COURT OF INDIA IN THE C ASE OF N.K. PROTEINS LTD. V/S DCIT [84 TAXMANN.COM 195] AND PRAYED FOR DISMISSING APPEAL OF THE ASSESSEE. 4. SUBMISSIONS MADE BY LD. DR HEARD, ORDERS OF AUTH ORITIES BELOW EXAMINED. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISC HARGE HIS ONUS IN PROVING AUTHENTICITY OF THE DEALERS AND THE ALLEGED PURCHAS ES MADE FROM THE SAID DEALERS. AT THE SAME TIME, IT IS OBSERVED THAT THE AO AND THE CIT(A) HAS ACCEPTED THE SALES TURNOVER DECLARED BY THE ASSESSE E. WITHOUT PURCHASE, THERE CANNOT BE SALES, THEREFORE, ENTIRE ALLEGED BOGUS PU RCHASES CANNOT BE DISALLOWED. IT IS THE PROFIT ELEMENT EMBEDDED IN UN PROVED TRANSACTIONS THAT CAN BE BROUGHT TO TAX ( RE: PCIT VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD. IN INCOME TAX APPEAL NO. 413 OF 2017 DECIDED ON 15.07.2019 ). IN THE LIGHT OF THE FACTS OF THE CASE AND THE AFORESAID DECISION RENDERED BY HON BLE JURISDICTIONAL HIGH COURT, I AM OF CONSIDERED VIEW THAT THE CIT(A) HAS ERRED IN MAKING 100% DISALLOWANCE OF ALLEGED BOGUS PURCHASES. GENERALLY, IN TRADING OF FERROUS AND NON-FERROUS METALS, THE GROSS PROFIT RANGES BETWEEN 5% TO 8%. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, I DEEM IT APPROPRI ATE TO ESTIMATE SUPPRESSED PROFIT MARGIN AT 7.5% ON UNPROVED PURCHASES. 5. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLO WED IN THE TERM AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 12 TH DAY OF JULY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 1/ DATED: 12/07/2021 SK, PS 4 . 7167 //20 19 (. .2010-11 ) ITA NO.7167/MUM/2019 (A.Y.2010-11) ( 2 ( 2 ( 2 ( 2 COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. (* / THE RESPONDENT. 3. 3 ( )/ THE CIT(A)- 4. 3 CIT 5. ( , . . . , / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI