SION STEEL, MUMBAI V. ITO WD 26(3)(2), MUMBAI

ITA 7598/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0745 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: PRAVIN N SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.7598/MUM/2016 (ASSESSMENT YEAR 2009-10) M/S. SION STEELS, A-159, NAIK NAGAR, NEAR MAHARASHTRA- WEIGH BRIDGE, LBS MARG, SION (W), MUMBAI 400 022. PAN:AABFS 7718L ...... APPELLANT VS. THE INCOME TAX OFFICER, WARD 26(3)(2), PRATYAKSHYAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI -400 051 .... RESPONDENT APPELLANT BY : SHRI PRAVIN N. SHA H RESPONDENT BY : SHRI A.K.KARDAM DATE OF HEARING : 11/05/2017 DATE OF PRONOUNCEMENT : 17/05/2017 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-38, MUMBAI DATED 30/09/2016, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3)R.W.S.147 O F THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 23/03/2015. 2. ALTHOUGH IN ITS MEMO OF APPEAL, ASSESSEE HAS RA ISED MULTIPLE GROUNDS OF APPEAL, BUT THE SHORT POINT ARGUED AT THE TIME O F HEARING WAS WITH REGARD TO THE QUANTUM OF ADDITION MAINTAINABLE. 2 ITA NO.7598/MUM/2016 (ASSESSMENT YEAR 2009-10) 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEALER IN IRON AND STEEL . BASED ON THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, THE ASSESSI NG OFFICER TREATED THE PURCHASE OF RS.19,93,318/- MADE FROM THREE PARTIES AS BOGUS. ACCORDINGLY, THE TOTAL INCOME WAS DETERMINED BY ADDING THE AFORE SAID AMOUNT TO THE RETURNED INCOME. THE APPEAL OF THE ASSESSEE BEFORE THE CIT(A) WAS ALSO UNSUCCESSFUL, AGAINST WHICH ASSESSEE IS IN APPEAL B EFORE THE TRIBUNAL. 4. BEFORE ME, THE LIMITED PLEA RAISED BY THE ASSESS EE IS TO THE EFFECT THAT FOLLOWING THE RATIO OF THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH,356 ITR 451(GUJ), WH AT IS SUSTAINABLE IS ONLY THE ADDITION WITH REGARD TO THE ELEMENT OF PROFIT IN SU CH PURCHASES, AND, THEREFORE, THE LD.REPRESENTATIVE FOR THE ASSESSEE S UBMITTED THAT AN ADDITION EQUIVALENT TO A PROFIT RATE OF 12.50% OF THE IMPUGN ED PURCHASES BE SUSTAINED. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE POINTED OUT THAT ASSESSEE HAD FAILED TO PRODUCE THE DELIVERY CH ALLANS OR THE DOCUMENTS FOR THE TRANSPORTATION OF GOODS TO PROVE THE GENU INENESS OF THE IMPUGNED PURCHASES AND, THEREFORE ADDITION HAS BEEN CORRECTL Y SUSTAINED BY THE CIT(A). 6. I FIND THAT BEFORE THE CIT(A) ASSESSEE FILED ST OCK STATEMENT OF MOVEMENT OF GOODS, COPIES OF VAT RETURN, COPY OF AU DIT REPORT UNDER SALES TAX, ETC. EVEN IN THE COURSE OF HEARING BEFORE ME ASSESSEE HAD REFERRED TO THE COPIES OF ACCOUNTS OF THREE CONCERNS, FROM WHOM THE IMPUGNED PURCHASES HAVE BEEN EFFECTED ALONGWITH INVOICES. T HE ASSESSEE ALSO HAS REFERRED TO THE QUANTITATIVE DETAILS OF THE GOODS T RADED DURING THE YEAR. ON ALL THESE BASIS, IT IS SOUGHT TO BE CANVASSED THAT THAT EVEN IF ASSESSEE FAILS TO 3 ITA NO.7598/MUM/2016 (ASSESSMENT YEAR 2009-10) PROVE THE PURCHASES IN QUESTION, WHAT CAN BE ASSESS ED IS ONLY THE PROFIT ELEMENT OF SUCH PURCHASES AS LAID DOWN BY THE HON'B LE GUJARAT HIGH COURT IN THE CASE OF SIMIT P. SHETH(SUPRA). IN MY CONSIDERE D OPINION, UNDER SIMILAR CIRCUMSTANCES THE HON'BLE GUJARAT HIGH COURT UPHELD THE PLEA OF THE ASSESSEE FOR AN ADDITION EQUIVALENT TO THE PROFIT ELEMENT EM BEDDED IN SUCH PURCHASES. CONSIDERING THE AFORESAID RATIO, IN MY VIEW, IT WOULD BE IN THE FITNESS OF THING THAT THE ADDITION IS SUSTAINED T O THE EXTENT OF A PROFIT OF 12.50% ON THE IMPUGNED PURCHASES. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO RETAIN AN ADDITION TO THE EXTENT OF 12. 50% OF THE IMPUGNED PURCHASES AND DELETE THE BALANCE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED , AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 17/05/2017 SD/- (G.S. PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 17/05/2017 VM , SR. PS 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