ITO 33 (2)(2), MUMBAI V. KIRIT RASHIKLAL DOSHI, MUMBAI

ITA 8058/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9568 (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; Accommodation entries

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 . 8058 / / 2019 (. 2011-12 ) ITA NO.8058/MUM/2019(A.Y 2011-12 ) ITO-33(2)(2), ROOM NO.846, 8 TH FLOOR, KAUTILYA BHAVAN, BKC MUMBAI 400 067 ...... + / APPELLANT VS. KIRIT RASHIKLAL DOSHI, ROOM NO.8, 1 ST FLOOR, PODDAR BHUVAN, PAREKH LANE, KANDIVALI (W), MUMBAI 400 067. PAN: AAAPD-7604-H ..... ,-/ RESPONDENT +./ APPELLANT BY : SHRI SANJAY J. SETHI ,-./ RESPONDENT BY : NONE /- / DATE OF HEARING : 10/06/2021 01 /- / DATE OF PRONOUNCEMENT : 28/07/2021 $/ ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE 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 2 ITA NO.8058/MUM/2019(A.Y 2011-12) INFORMATION RECEIVED, THE ASSESSEE HAD INDULGED IN OBTAINING BOGUS PURCHASE BILLS FROM NINE DEALERS DECLARED AS HAWALA OPER ATORS BY THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. DURING AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE H AD OBTAINED ACCOMMODATION ENTRIES TO THE TUNE OF RS.28,85,753/- FROM SIX HAWALA OPERATORS. THE ASSESSEE COULD NEITHER PRODUCE SUS PICIOUS DEALERS NOR ANY CONFIRMATIONS FROM THE SAID DEALERS. NO DOCUMENTAR Y EVIDENCE IN THE FORM OF DELIVERY CHALLAN, LORRY RECEIPT, OCTROI RECEIPT, ET C. WERE FURNISHED BY THE ASSESSEE TO SHOW TRAIL OF GOODS. SINCE, THE ASSESS EE FAILED TO DISCHARGE HIS ONUS IN PROVING GENUINENESS OF PURCHASES AND THE DE ALERS, THE ASSESSING OFFICER DISALLOWED ENTIRE BOGUS PURCHASES. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) GRANTED RELIEF TO THE ASSESSEE BY EST IMATING PROFIT MARGIN ON BOGUS PURCHASES TO 5%. THUS, THE CIT(A) RESTRICTED THE ADDITION TO RS.1,44,287/- ONLY. NOW, THE REVENUE IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE CIT(A). THE LD.DEPARTMENTAL REPRESENTATIVE PRA YED FOR REVERSING THE FINDINGS OF CIT(A) AND CONFIRMING THE ADDITION MADE IN ASSESSMENT ORDER. TO SUPPORT HIS SUBMISSIONS THE LD.DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF N.K. PROTEINS VS. DCIT IN SLP NO.(C) 769 OF 2017 DECIDED ON 16/01/201 7. 3. SUBMISSIONS BY LD.DEPARTMENTAL REPRESENTATIVE HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE / RESPOND ENT IS ENGAGED IN TRADING OF ELECTRICAL GOODS. UNDISPUTEDLY, THE ASSESSEE FAI LED TO DISCHARGE HIS ONUS IN PROVING AUTHENTICITY OF SUSPICIOUS DEALERS AND THE PURCHASES MADE FROM THEM. THE SALES TURNOVER DECLARED BY THE ASSESSEE WAS A CCEPTED BY THE ASSESSING 3 ITA NO.8058/MUM/2019(A.Y 2011-12) OFFICER, STILL THE ASSESSING OFFICER DISALLOWED 100 % ALLEGED BOGUS PURCHASES. ONCE THE SALES TURNOVER IS ACCEPTED ENTIRE BOGUS PU RCHASES CANNOT BE DISALLOWED. IT IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH TRANSACTIONS THAT CAN BE BROUGHT TO TAX. THE CIT(A) HAS ESTIMATED SU PPRESSED PROFIT MARGIN ON UNPROVED PURCHASES AT 5%. WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A), HENCE, IMPUGNED ORDER IS UPHELD. 4. 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) $% /ACCOUNTANT 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