NEELAM GUPTA, MUMBAI V. ITO CIRCLE-26(2)(4), MUMBAI

ITA 7494/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4042 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHARAM VEER SING H
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI N.K.PRADHAN ACCOUNTANT MEMBER ITA NO.7494/MUM/2018(A.Y.2011-12) NEELAM GUPTA, FLAT NO.1102, CHHADVA RESIDENCY, MOTIBAUG, BORLA VILLAGE, CHEMBUR (EAST), MUMBAI 400 071. PAN:AEHPG 2363R ...... APPELLANT VS. INCOME TAX OFFICER , CIR.26(2)(3), C-11,ROOM NO.711, PRATYAKSHKAR BHAVAN, BKC, BANDRA (EAST), MUMBAI 400 051 ..... RESPONDENT ITA NO.79/MUM/2019(A.Y.2011-12) INCOME TAX OFFICER , CIR.26(2)(3), C-11,ROOM NO.711, PRATYAKSHKAR BHAVAN, BKC, BANDRA (EAST), MUMBAI 400 051 .... APPELLA NT VS. NEELAM VEDPRAKASH GUPTA, FLAT NO.1102, CHHADVA RESIDENCY, MOTIBAUG, BORLA VILLAGE, CHEMBUR (EAST), MUMBAI 400 071. PAN:AEHPG 2363R 2 ITA NO.7494/MUM/2018(A.Y.2011-12) ITA NO.79/MUM/2019(A.Y.2011-12) ASSESSEE BY : NONE REVENUE BY : SHRI DHARAM VEER SING H DATE OF HEARING : 13/01/2020 DATE OF PRONOUNCEMENT : 18/02/2020 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 38, MUMBAI ( IN SHORT THE CIT(A) ) DATED 31/07/2018 FOR ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE : THE ASSESSEE IS ENGAGED IN TRADING OF TMT BARS, STEEL, ETC. ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING, THE ASSESSING OFFICER REOPENED THE ASSESSMENT. IN RE-ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS MADE BOGUS PURCHASES TO THE TUNE OF RS.1,02,24,183/- FROM VARIOUS HAWALA DEALERS. THE ASSESSING OFFICER MADE ADDITION OF 12.5% OF THE ALLEGED BOGUS PURCHASES I.E. RS.12,78,023/-. AGGR IEVED AGAINST THE ASSESSMENT ORDER DATED 25/11/2016, THE ASSESSEE FIL ED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING VARIOUS CASE LAWS ON THE ISSUE GRANTED PART RELIEF TO THE ASSESSEE BY RESTRICTING THE ADDITION TO 10.5% OF THE ALLEGED BPS. IN OTHER WORDS, THE CIT(A) RESTRICTED DISALLOWANCE OF BOGUS PURCHASES TO RS.10,73,539/-. STILL AGGRIEVED, THE ASSESSEE IS I N SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE ADDITION CONFIRMED BY THE CI T(A). THE REVENUE IS ALSO IN APPEAL AGAINST THE RELIEF GRANTED BY THE CIT(A). 3 ITA NO.7494/MUM/2018(A.Y.2011-12) ITA NO.79/MUM/2019(A.Y.2011-12) 3. A PERUSAL OF THE APPEAL FILE SHOWS THAT NOTICE O F HEARING OF THE APPEAL WAS ISSUED TO THE ASSESSEE THROUGH RPAD. THE ACKNO WLEDGEMENT CARD AVAILABLE ON RECORD INDICATES THAT THE NOTICE WAS D ULY SERVED ON THE ASSESSEE. DESPITE SERVICE OF NOTICE NEITHER THE ASSESSEE NOR ANY AUTHORIZED REPRESENTATIVE OF THE ASSESSEE IS PRESENT IN THE C OURT TODAY. NO REQUEST FOR ADJOURNMENT HAS BEEN RECEIVED EITHER. IT SEEMS THA T THE ASSESSEE IS NOT KEEN TO PURSUE HIS APPEAL. UNDER SUCH CIRCUMSTANCES, WE ARE CONSTRAINED TO DECIDE THE APPEAL WITH THE ASSISTANCE OF LD.DEPARTMENTAL R EPRESENTATIVE AND MATERIAL AVAILABLE ON RECORD. 4. SHRI DHARAM VEER SINGH, REPRESENTING THE DEPARTM ENT SUBMITTED THAT THE ASSESSING OFFICER CONSIDERING ENTIRE FACTS AND HAS ESTIMATED PROFIT ELEMENT EMBEDDED IN BOGUS PURCHASES TO 12.5%. THE ASSESSING OFFICER HAD DONE A FAIR AND JUSTIFIED ESTIMATION OF GP. THE FU RTHER RELIEF GRANTED BY THE CIT(A) IS WITHOUT ANY IMPLICATION. THE LD.DEPARTME NTAL REPRESENTATIVE PRAYED FOR RESTORING THE FINDING OF ASSESSING OFFICER AND SETTING ASIDE THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY LD.DEPARTM ENTAL REPRESENTATIVE AND HAVE EXAMINED THE ORDER OF AUTH ORITIES BELOW. THE ASSESSEE IS ENGAGED IN TRADING OF STEEL BARS, ETC. THE ASSESSING OFFICER ESTIMATED G.P @ 12.5% ON ALLEGED BOGUS PURCHASES. T HE CIT(A) HAS GRANTED RELIEF BY RESTRICTING THE G.P ON BOGUS PURCHASES TO 10.5% AFTER TAKING INTO CONSIDERATION THE GP DECLARED BY ASSESSEE AT 1.59%. THE CIT(A) HAS REDUCED THE GP DECLARED BY THE ASSESSEE FROM GP ESTIMATED B Y THE ASSESSING OFFICER. AFTER TAKING INTO CONSIDERATION ENTIRETY OF FACTS, THE NATURE OF ASSESSEES BUSINESS, THE TURNOVER DECLARED BY THE ASSESSEE AND THE GP OFFERED, WE ARE OF 4 ITA NO.7494/MUM/2018(A.Y.2011-12) ITA NO.79/MUM/2019(A.Y.2011-12) CONSIDERED VIEW THAT ENDS OF JUSTICE WOULD MEET IF THE GP ON BOGUS PURCHASES IS RESTRICTED TO 8%. WE HOLD AND DIRECT ACCORDING LY. 6. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLO WED AND APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 18 TH DAY OF FEBRUARY, 2020. SD/- SD/- (N.K.PRADHAN) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 18/02/2020 VM , SR. PS(O/S) 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