ITO 26 (3)(7), MUMBAI V. SHRI. VARGHESE GEORGE PADIPURACKAL , MUMBAI

ITA 7696/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1763 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: AJAY GOSALIA
• Keywords: Bogus purchase; Accommodation entries
• Section: 133(6); 13; 147; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 7696 //2019 (. . 2010-11 ) ITA NO.7696/MUM/2019 (A.Y.2010-11) ITO -26(3)(7), ROOM NO. 418, 4 TH FLOOR, KAUTILYA BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E)-400051 ...... ) / APPELLANT VS. SHRI VARGHESE GEORGE PADIPURACKAL M/S TASC ENGINEERING, DS/4, USHA NAGAR, KHANDELWAL MARG, BHANDUP (W), MUMBAI-400078. PAN: ADYPP4959J ..... *,/ RESPONDENT ) -/ APPELLANT BY : SH. SANJAY J. SETHI *, -/ RESPONDENT BY : SH. AJAY GOSALIA . / DATE OF HEARING : 01/06/2021 . / DATE OF PRONOUNCEMENT : 10/06/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-40, MUMBAI [HE REINAFTER REFERRED TO AS THE CIT(A)] DATED 09.09.2019 FOR THE ASSESSMENT Y EAR (AY) 2010-11. 2 . 7696 //2019 (. .2010-11 ) ITA NO.7696/MUM/2019 (A.Y.2010-11) 2. SHRI AJAY GOSALIA APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN TRADING OF PIPES AND PIPE FI TTINGS. THE AO MADE ADDITION OF RS. 20,32,677/- ON ACCOUNT OF ALLEGED BOGUS PURC HASES FROM THREE DEALERS DURING THE PERIOD RELEVANT TO AY UNDER APPEAL. THE AO MADE ADDITION ON ENTIRE ALLEGED BOGUS PURCHASES. THE ASSESSEE FILED APPEAL AGAINST THE ASSESSMENT ORDER DATED 23.03.2015. THE CIT(A) AFTER EXAMINING THE FACTS RESTRICTED THE ADDITION TO RS. 2,54,087/- BY ESTIMATING GP OF 12.5 % ON ALLEGED BOGUS PURCHASES, THE SAME HAS BEEN ACCEPTED BY THE ASSESS EE. 3. PER CONTRA, SHRI SAJNAY SETHI REPRESENTING THE D EPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERS ING THE FINDINGS OF CIT(A) ON THIS ISSUE. THE LD. DR SUBMITTED THAT THE ASSESS EE NEVER APPEARED BEFORE THE AO, THEREFORE, THE AO WAS CONSTRAINED TO PASS A SSESSMENT ORDER UNDER SECTION 144 READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE DEALERS AND THE PURCHASE S MADE FROM THEM. THE NOTICES ISSUED UNDER SECTION 133(6) TO THE DEALERS WERE RETURNED BACK UNSERVED BY THE POSTAL AUTHORITIES. THE NAME OF THE DEALERS FROM WHOM THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES APPEAR IN THE LIST OF HAWALA OPERATORS DECLARED BY THE SALES TAX DEPARTMENT, GOV ERNMENT OF MAHARASHTRA. 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. IT IS AN UNDISPUTED FACT THAT THE SALES TURNOVER DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE AO. WITHOUT PURCHASES, THERE CANNOT BE SALES, THEREFORE, ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE DISALLOWED . IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS THAT HAS TO B E BROUGHT TO TAX (RE: PCIT 3 . 7696 //2019 (. .2010-11 ) ITA NO.7696/MUM/2019 (A.Y.2010-11) VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD. IN ITA NO. 4 13 OF 2017 DECIDED ON 15.07.2019). THE CIT(A) HAS ESTIMATED GP ON BOGUS P URCHASES AT 12.5%. THE SAME HAS BEEN ACCEPTED BY THE ASSESSEE. I FIND NO I NFIRMITY IN THE IMPUGNED ORDER, HENCE, THE SAME IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED, BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 10 TH DAY OF JUNE, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 3/ DATED: 10/06/2021 SK, PS * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *, / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * , . . . , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI