ITO 33 (2)(2), MUMBAI V. KALPESH DHIRAJLAL PATEL, MUMBAI

ITA 8057/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9569 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase

Judgement Text

, , #,$% $& IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER . 8057 / / 2019 (. 2011-12 ) ITA NO.8057/MUM/2019(A.Y 2011-12 ) ITO-33(2)(2), ROOM NO.846, 8 TH FLOOR, KAUTILYA BHAVAN, BKC, MUMBAI 400 051, ...... + / APPELLANT VS. KALPESH DHIRAJLAL PATEL, 4C/401, PARAS NAGAR, SHANKER LANE, KHANDIVALI (W), MUMBAI 400 067. PAN: AKNPP-9059-M ..... ,-/ RESPONDENT +./ APPELLANT BY : SHRI SANJAY J. SETHI ,-./ RESPONDENT BY : SHRI VISHWAS MEHENDALE /- / DATE OF HEARING : 10/06/2021 01 /- / DATE OF PRONOUNCEMENT : 28/07/2021 $/ ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER COMMISSIONER OF INCOME TAX(APPEALS)-45, MUMBAI [IN SHORT 'THE CIT(A )] DATED 24/10/2019 FOR THE ASSESSMENT YEAR 2011-12. 2. SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMEN T SUBMITTED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2011-12 IN THE CASE OF ASSESSEE WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM DGIT (INV), MUMBAI. AS PER THE INFORMATION RECEIVED, THE ASSESSEE HAD OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO 2 ITA NO.8057/MUM/2019(A.Y 2011-12) RS.15,96,010/- FROM SIX DEALERS, DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. DURING AS SESSMENT PROCEEDINGS, THE ASSESSEE COULD NEITHER PRODUCE SUSPICIOUS DEALERS N OR ANY CONFIRMATIONS FROM THE SAID DEALERS WERE FILED. NO DOCUMENTARY EVIDENCE I N THE FORM OF DELIVERY CHALLAN, LORRY RECEIPT, OCTROI RECEIPT, ETC. WERE FURNISHED BY THE ASSESSEE TO SHOW TRAIL OF GOODS. SINCE, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURCHASES AND THE DEALERS, THE ASSESSING OFFICER DI SALLOWED 25% OF BOGUS PURCHASES AND MADE ADDITION OF RS.3,99,,002/-. IN FIRST AP PELLATE PROCEEDINGS, THE CIT(A) RESTRICTED THE DISALLOWANCE TO 12.5% OF BOGUS PURCH ASES. NOW, THE REVENUE IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE CIT(A). T HE LD.DEPARTMENTAL REPRESENTATIVE PRAYED FOR REVERSING THE FINDINGS OF CIT(A) AND CON FIRMING THE ADDITION MADE IN ASSESSMENT ORDER. 3. ON THE OTHER HAND, SHRI VISHWAS MEHENDALE APPEARING ON BEHALF OF THE ASSESSEE STRONGLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING APPEAL BY THE DEPARTMENT THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING OF PVC COM POUND/GRANULES. THE DISALLOWANCE MADE BY ASSESSING OFFICER ON ALLEGED B OGUS PURCHASES WAS VERY MUCH ON THE HIGHER SIDE. THE LD.AUTHORIZED REPRESENTATI VE OF THE ASSESSEE CONTENDED THAT THOUGH THE PURCHASES WERE GENUINE, HOWEVER, TO SETT LE DISPUTE, THE ASSESSEE HAS ACCEPTED THE ADDITION CONFIRMED BY CIT(A). 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. UNDISPUTEDLY, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN PROVING AU THENTICITY OF SUSPICIOUS DEALERS AND GENUINENESS OF PURCHASES MADE FROM THEM DURING T HE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL. THE ASSESSING OFFICE R AFTER ACCEPTING THE SALES TURNOVER DECLARED BY ASSESSEE, DISALLOWED 25% O F ALLEGED BOGUS PURCHASES. WE ARE OF CONSIDERED VIEW THAT DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS ON HIGHER SIDE. IT IS ONLY THE PROFIT ELEMENT EMBEDDE D IN SUCH TRANSACTIONS THAT CAN BE BROUGHT TO TAX. THE CIT(A) HAS ESTIMATED SUPPRESSE D PROFIT MARGIN ON BOGUS 3 ITA NO.8057/MUM/2019(A.Y 2011-12) PURCHASES AT 12.5% . THE SAME HAS BEEN ACCEPTED BY THE ASSESSEE. WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A), HE NCE, IMPUGNED ORDER WARRANTS NO INTERFERENCE. 5. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D, SANS MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY, THE 28 TH DAY OF JULY, 2021 SD/- SD/- (MANOJ KUMAR AGGARWAL) (VIKAS AWASTHY) $% / ACCOUNTNT MEMBER / JUDICIAL MEMBER / MUMBAI, 3/ DATED 28/07/2021 VM , SR. PS (O/S) COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT , 2. ,- / THE RESPONDENT. 3. 4- ( )/ THE CIT(A)- 4. 4- CIT 5. 56,- , . . . , / DR, ITAT, MUMBAI 6. 6789: / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI