M/S RONAK TRADE IMPEX, Mumbai V. ITO 26(2)(5), Mumbai

ITA 740/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6663 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GIWASE ANOOP SADASHIV
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO. 597/MUM/2019 ( ASSESSMENT YEAR: 2011-12) I.T.O.-26(2)(5), ROOM NO. 506, 5 TH FLOOR, C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. VS. M/S RONAK TRADE IMPEX, 265/10, SANJOLI CHS, SION- MATUNGA ROAD, SION (W), MUMBAI-400022. PAN/GIR NO.AALFR 6702 R (APPELLANT ) .. (RESPONDENT ) ITA NO. 740/MUM/2019 ( ASSESSMENT YEAR: 2011-12) M/S RONAK TRADE IMPEX, 265/10, SANJOLI CHS, SION- MATUNGA ROAD, SION (W), MUMBAI-400022. VS. I.T.O.-26(2)(5), ROOM NO. 506, 5 TH FLOOR, C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. PAN/GIR NO.AALFR 6702 R (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI GIWASE ANOOP SADASHIV (SR.DR) ASSESSEE BY SHRI MANOJ MUNDRA (AR) DATE OF HEARING 03/02/2020 DATE OF PRONOUNCEMENT 04/02/2020 / O R D E R PER: R.C. SHARMA, A.M. THESE ARE THE APPEAL FILED BY THE ASSESSEE AND CRO SS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. C IT(A)-38, MUMBAI ITA NO. 597 & 740/MUM/2019 ITO VS M/S RONAK TRADE IMPEX 2 DATED 19/09/2018 FOR THE A.Y. 2011-12 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT, THE ACT). 2. IN THESE APPEALS, THE REVENUE AND THE ASSESSEE A RE AGGRIEVED FOR UPHOLDING ADDITION ON THE ALLEGED BOGUS PURCHAS ES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN TH E BUSINESS OF TRADING IN ELECTRICAL HARDWARE AND PNEUMATIC ITEMS. THE CAS E WAS REOPENED AS PER THE INFORMATION AVAILABLE WITH THE OFFICE FR OM DGIT(INV.), MUMBAI THAT THE ASSESSEE HAS OBTAINED BILLS OF BOGU S PURCHASES OF RS. 61,45,781/-. AFTER REOPENING THE ASSESSMENT, THE A. O. OBSERVED THAT THE PURCHASES HAVE BEEN MADE BY THE ASSESSEE NOT FR OM THE PARTIES FROM WHOM IT IS SHOWN TO HAVE BEEN PURCHASES BUT FR OM A DIFFERENT SOURCE WHICH THE ASSESSEE DID NOT DISCLOSE TO THE D EPARTMENT. ACCORDINGLY, HE COMPUTED 15% OF SUCH PURCHASES AND ADDED THE SAME IN ASSESSEES INCOME. BY THE IMPUGNED ORDER, T HE LD. CIT(A) HAS RESTRICTED THE ADDITION TO THE EXTENT OF 12.5% IN P LACE OF 15% ADDED BY THE A.O.. AGAINST THE ORDER OF THE LD. CIT(A), B OTH THE ASSESSEE AND THE REVENUE ARE IN APPEALS BEFORE THE ITAT. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM THE RECORD THAT THE ASSESSEE IS THE PROPRIETOR AND ENGAGED IN TRADING OF ELECTRICAL ITA NO. 597 & 740/MUM/2019 ITO VS M/S RONAK TRADE IMPEX 3 HARDWARE AND PNEUMATIC ITEMS. THE ASSESSMENT WAS RE OPENED ON THE INFORMATION BY THE SALES TAX DEPARTMENT REGARDING T HE ASSESSEE IS TAKING BOGUS PURCHASE BILLS. WHILE PASSING THE REAS SESSMENT ORDER, THE A.O. DID NOT DOUBT THE CORRESPONDING SALES MADE BY THE ASSESSEE. ACCORDINGLY, THE A.O. ESTIMATED PROFIT OF 15% ON SU CH BOGUS PURCHASES WHICH WAS REDUCED BY THE LD. CIT(A) TO TH E EXTENT OF 12.5%. I FOUND THAT THE ASSESSEE IS ALREADY SHOWING G.P. OF 12.95% FOR THE A.Y. 2010-11, 2012-13 AND 2013-14. AS AGAIN ST THE G.P. ALREADY DECLARED AT 12.95%, FURTHER ADDITION OF 12. 5% IS NOT JUSTIFIED IN SO FAR AS THE ASSESSEE WAS JUST A TRADER. KEEPIN G KIN VIEW THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE BEFORE T HE LOWER AUTHORITIES AS ALSO THE G.P. DECLARED BY THE ASSESS EE DURING THE YEAR UNDER CONSIDERATION AND THE EARLIER YEARS, IT WILL BE JUSTIFIED TO RESTRICT ADDITION TO THE EXTENT OF 10%. ACCORDINGLY, THE A.O . IS DIRECTED TO RESTRICT ADDITION TO THE EXTENT OF 10%. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D AND APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH FEBRUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 04/02/2020 ITA NO. 597 & 740/MUM/2019 ITO VS M/S RONAK TRADE IMPEX 4 *RANJAN 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//