ITO 25 (2)95), MUMBAI V. SHRI. PRAGARAM G PRAJAPATI , MUMBAI

ITA 7982/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3744 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 26-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHILD DR
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.7982/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) I TO - 20(2)(5) ROOM NO.208, 2 ND FLOOR PIRAMAL CHAMBERS, LALBAUG PAREL, MUMBAI-400 012 / VS. SHRI PRAGARAM G. PRAJAPATI PROP. M/S. GOPAL FORGE INDUSTRIES 34, VAIBHAV BHAWAN, 4 TH KAMATHIPURA LANE MUMBAI-400 004. ./ ./ PAN/GIR NO. AIRPP-4520-D ( + / APPELLANT ) : ( ./+ / RESPONDENT ) + 0/ APPELLANT BY : SHRI SANJAY SETHI-LD.DR ./+ 0 / RESPONDENT BY : NONE /DATE OF HEARING : 08/06/2021 / DATE OF PRONOUNCEMENT : 08/06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY IN SHORT] 2010- 11 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI [IN SHORT CIT(A) ] DATED 23/10/2019 WHICH HA S PROVIDED CERTAIN RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2 2. THOUGH NONE APPEARED FOR ASSESSEE, HOWEVER, MATE RIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR PLEADED FOR RESTORATION OF ASSESSMENT FRAMED BY LD. AO. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN TRADING OF METALS UNDER PRO PRIETORSHIP CONCERN NAMELY M/S GOPAL FORGE INDUSTRIES WAS ASSESSED FOR THE YEAR UNDER CONSIDERATION U/S 143(3) R.W.S. 147 ON 11/02/2016. THE ORIGINAL RETURN FILED BY ASSESSEE WAS PROCESSED U/S 143(1). HOWEVER, PURS UANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INV.) / SALES TAX DE PARTMENT, MUMBAI, IT TRANSPIRED THAT THE ASSESSEE MADE ALLEGED BOGUS PUR CHASES OF RS.55.48 LACS FROM SEVEN ENTITIES AS DETAILED IN THE ASSESSM ENT ORDER. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS REQUIRED TO FILE REQUISITE DETAILS TO SUBSTANTIATE THESE PURCHASES. 3.2 IN SUPPORT OF PURCHASES, THE ASSESSEE FURNISHED CERTAIN DOCUMENTS LIKE COPIES OF INVOICES, LEDGER EXTRACTS AND BANK S TATEMENTS EVIDENCING PAYMENT TO THE SUPPLIERS THROUGH BANKING CHANNELS. HOWEVER, NOTICES ISSUED U/S 133(6) TO ALL THESE SUPPLIERS DID NOT EL ICIT ANY SATISFACTORY RESPONSE WHICH LED LD. AO TO DISBELIEVE THE GENUINE NESS OF THESE PURCHASES. FINALLY, LD. AO ESTIMATED AN ADDITION OF 12.5% AGAINST THESE PURCHASES. 4. THE LD. CIT(A), CONSIDERING THE NATURE OF ASSESS EES BUSINESS AS WELL AS DOCUMENTARY EVIDENCES, RESTRICTED THE ADDITIONS TO 5%. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. GOING BY THE FACTUAL MATRIX AS ENUMERATED IN THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT ASSESSEES SALES TURNOVER WAS NOT IN DOUBT AND 3 THE ASSESSEE WAS IN POSSESSION OF PRIMARY PURCHASE DOCUMENTS. THE PAYMENT TO THE SUPPLIERS WAS THROUGH BANKING CHANNE LS. THERE COULD BE NO SALE WITHOUT ACTUAL PURCHASE OF MATERIAL KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. THE FACTS OF THE CASE MADE IT A FIT CASE TO ESTIMATE THE PROFIT ELEMENT EMBEDDED IN THESE TRANSACTIONS. THE LD. CIT(A), AFTER DUE CONSIDERATION OF ASSESSEES SUBMISSIONS AS WELL AS MATERIAL ON RECORD, ESTIMATED THE ADDITIONS @5% WHICH IS MORE THAN ENOU GH TO TAKE CARE OF THE LEAKAGE OF REVENUE. THEREFORE, THE ESTIMATION COULD NOT BE TERMED AS UNJUSTIFIED, IN ANY MANNER. FINDING NO REASON TO IN TERFERE IN THE IMPUGNED ORDER, WE DISMISS THE APPEAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 08 TH JUNE, 2021. SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) HI / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; I DATED : 08/06/2021 SR.PS, JAISY VARGHESE 01234514 / COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT 2. ./+ / THE RESPONDENT 3. K ( ) / THE CIT(A) 4. K / CIT CONCERNED 5. I LM .I?IIN , IN , / DR, ITAT, MUMBAI 6. MOPQ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.