M/S RELIABLE BALL BEARING STORES, MUMBAI V. ITO 20 (3)91), MUMBAI

ITA 8026/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3810 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI LD
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 143(1); 147

Judgement Text

1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HO NBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 8026 /MUM/2019 ( / ASSESSMENT YEAR : 20 09 - 10 ) M/S RELIABLE BALL BEARING STORES 169, MUTTON STREET OPP. NULL BAZAR MUMBAI - 400 008 / VS. ITO - 2 0(3)(1 ) 621, 6 TH FLOOR PIRAMAL CHAMBERS LALBAUG PAREL,MUBMAI 400 012 ./ ./ PAN/GIR NO . A AFFR - 1220 - C ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI S ANJAY J. SETHI LD. DR / D ATE OF HEARING : 07/06/2021 / DATE OF PRONOUNCEMENT : 07/06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY IN SHORT] 20 09 - 10 CONTEST THE ORDER OF L D. COMMISSIONER O F INCOME TAX (APPEALS) - 28 , MUMBAI [IN SHORT CIT(A) ] DATED 14/10/2019 WHICH HAS CONFIRMED CERTAIN ADDITION OF 12.5% ON ACCOUNT OF ALLEGED BOGUS PURCHASES AS MADE BY LD. AO . 2 2. THOUGH NONE APPEARED FOR ASSESSEE, HOWEVER, MATERIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF THE APPEAL. THE LD. DR PLEADED FOR DISMISSAL OF THE APPEAL. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSE BEING RESIDENT FIRM STATED TO BE ENGAGED IN TRADING OF TOOLS AND BEARINGS WAS ASSESSED FOR THE YEAR UNDER CONSIDERATION U/S 143(3) R.W. S. 147 OF THE ACT ON 27 /03/2015. THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT. HOWEVER, PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM DGIT (INV.) / SALES TAX DEPARTMENT, MUMBAI, IT TRANSPIRED THAT THE ASSESSEE MADE ALLEGE D BOGUS PURCHASES OF RS. 34.89 LACS FROM AN ENTITY NAMELY M/S NINA ENTERPRISES WH O WAS LISTED AS HAWALA OPERATOR . ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW AND THE ASSESSEE WAS REQUIRED TO FILE REQUISITE DETAILS TO SUBSTANTIATE THE PURCHA SES. 3.2 THOUGH THE SUPPLIER M/S NINA ENTERPRISES CONFIRMED THE TRANSACTION IN RESPONSE TO NOTICE U/S 133(6) , HOWEVER , GOING BY THE FINDINGS OF THE INVESTIGATION WING, LD. AO ESTIMATED ADDITION OF 12.5% AGAINST THESE PURCHASES. THE ACTION OF LD. AO , UPON CONFIRMATION BY LD. CIT(A), IS IN FURTHER CHALLENGE BEFORE US. 4. UPON DUE CONSIDERATION OF MATERIAL FACTS, WE FIND THAT THE ASSESSEE HAS FILED CONFIRMATION LETTER OF M/S NINA ENTERPRISES ALONG WITH COPY OF PAN & TIN & LEDGER EXTRACTS. THE DETAILS OF PURCH ASES HAS ALSO BEEN SUBMITTED ALONG WITH BANK STATEMENT EVIDENCING PAYMENT TO THE STATED SUPPLIER THROUGH BANKING CHANNELS. THE COPIES OF INVOICES WERE ALSO FURNISHED AND THE PURCHASED GOODS WERE SUBSEQUENTLY EXPORTED BY THE ASSESSEE. IN SUCH A CASE, THE ON US CASTED UPON ASSESSEE WAS DULY DISCHARGED. HOWEVER, IT IS ALSO EVIDENT THAT THE ASSESSEE COULD NOT PRODUCE THE SUPPLIER AND THE SUPPLIER WAS LISTED AS HAWALA OPERATOR BY 3 THE SALES TAX AUTHORITIES. IN SUCH A CASE, A PRESUMPTION COULD BE DRAWN THAT THE GOO DS WERE PROCURED FORM THE GREY MARKET BUT THE BILLS WERE PROCURED FROM THE SAID SUPPLIER. IN SUCH A CASE, KEEPING IN VIEW THE FACTS & CIRCUMSTANCES OF THE CASE AND CONSIDERING THE GROSS PROFIT RATE REFLECTED BY THE ASSESSEE IN VARIOUS YEARS, WE RESTRICT TH E IMPUGNED ADDITIONS TO 5% OF AGGREGATE PURCHASES OF RS.34,89,307/ - WHICH COMES TO RS. 1,74,465/ - . THE BALANCE ADDITION STAND DELETED. 5. THE APPEAL STAND PARTLY ALLOWED. ORDER PRONOUNCED ON 07 TH JUNE, 2021 . SD/ - SD/ - ( VIKAS AWASTHY ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 07/06/2021 SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.