ITO WD-4(2), THANE V. SHRI MILIND M MESTRY, MUMBAI

MA 218/MUM/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3645 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 29-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) MA No. 218/MUM/2021 (ITA No. 5948/MUM/2018) Assessment Year: 2010-11 Principal Commissioner of Income Tax-1, Thane, 6 th floor, Ashar IT Park, ‘A’ Wing, Road No. 16Z, Wagle Industrial Estate, Thane (W)-400 604. Vs. Shri Milind M. Mestry, Prop: M/s Harsh Metals, Gala No. 2, Rajprabha Industrial Estate-3, Naikpada, Vasai Road (East), Mumbai-401 208. PAN No. AFUPM 0879 A Appellant Respondent Assessee by : None Revenue by : Mr. Tejinder Pal Singh Anand, DR Date of Hearing : 10/06/2022 Date of pronouncement : 06/07/2022 ORDER PER OM PRAKASH KANT, AM By way of this Miscellaneous Application, the Revenue is seeking rectification in the order of the Tribunal dated 22.10.2019 in ITA No. 5948/M/2018 for assessment year 2010-11. 2. At the outset, we may like to mention that despite notifying on 04.03.2022, 25.03.2022, 29.04.2022, 20.0 neither anyone attended on behalf of the assessee nor any adjournment was sought. In the facts and circumstances, we the opinion that assessee is not in interest in prosecutin Miscellaneous Application, qua the assessee after hearing the arguments of the Revenue. 3. We find that in the Miscellaneous Application, Revenue has sought to rectify the para 5 of the order of the Tribunal. In said para, the Tribunal has sustained disallowanc in final finding, however, in the last line directed the AO to make addition @ 4%. 4. The Ld. DR submitted disallowance has been made therefore, the error occurred addition @ 4% need to be rectified. At the outset, we may like to mention that despite notifying on 04.03.2022, 25.03.2022, 29.04.2022, 20.05.2022 and 10.06.2022 neither anyone attended on behalf of the assessee nor any adjournment was sought. In the facts and circumstances, we the opinion that assessee is not in interest in prosecutin Miscellaneous Application, therefore, the same was heard qua the assessee after hearing the arguments of the Revenue. We find that in the Miscellaneous Application, Revenue has sought to rectify the para 5 of the order of the Tribunal. In said para, the Tribunal has sustained disallowance of bogus purchases @ 6% in final finding, however, in the last line directed the AO to make The Ld. DR submitted that since in the preceding sentence has been made @ 6% of bogus purchases and occurred in last line of the para 5 for directing addition @ 4% need to be rectified. Shri Milind M. Mestry MA No. 218/M/2021 2 At the outset, we may like to mention that despite notifying on 5.2022 and 10.06.2022 neither anyone attended on behalf of the assessee nor any adjournment was sought. In the facts and circumstances, we were of the opinion that assessee is not in interest in prosecuting the e was heard ex-parte qua the assessee after hearing the arguments of the Revenue. We find that in the Miscellaneous Application, Revenue has sought to rectify the para 5 of the order of the Tribunal. In said para, e of bogus purchases @ 6% in final finding, however, in the last line directed the AO to make since in the preceding sentence @ 6% of bogus purchases and in last line of the para 5 for directing 5. We have heard submissions of the Ld. DR and perused the relevant order of the Tribunal. The relevant para 5 of the Tribunal is reproduced as under: “5. After hearing ld DR and perusing the material on record, we observe that in this case, undisputedly, assessee is beneficiary of bogus hawala purchase entries. We note that the assessee is engaged in manufacturing and dealing in precision Die and Sheet M purchases to the income of the assessee by treating them as non genuine despite assessing filing all the information on the ground that the assessee failed to produce the supplier. Though the assessee did not show up before th dismissed ex-parte. In our opinion even in the case of bogus purchases where the sales are not disputed by the AO, 100% is excessive and unreasonable in view of the nature of business of the assessee and pro in that line of assessee. However we certainly feel that some estimated profit on the said bogus purchases has to be brought to tax as the AO has not disputed the corresponding sales. reasonable and fair if 6% is applied on the assess the profits. Accordingly, we set aside the order of CIT(A) and direct the AO to make addition @4% on the same.” 5.1 We find that while concluding reasonable and fair to a We have heard submissions of the Ld. DR and perused the relevant order of the Tribunal. The relevant para 5 of the Tribunal is reproduced as under: 5. After hearing ld DR and perusing the material on record, we observe that in this case, undisputedly, assessee is beneficiary of bogus hawala purchase entries. We note that the assessee is engaged in manufacturing and dealing in precision Die and Sheet Metal. The AO added the entire purchases to the income of the assessee by treating them as non genuine despite assessing filing all the information on the ground that the assessee failed to produce the supplier. Though the assessee did not show up before the ld CIT(A) to attend the hearing the appeal was parte. In our opinion even in the case of bogus purchases where the sales are not disputed by the AO, 100% is excessive and unreasonable in view of the nature of business of the assessee and pro in that line of assessee. However we certainly feel that some estimated profit on the said bogus purchases has to be brought to tax as the AO has not disputed the corresponding sales. In our view it would be reasonable and fair if 6% is applied on the said bogus purchases to assess the profits. Accordingly, we set aside the order of CIT(A) and direct the AO to make addition @4% on the same.” (emphasis supplied externally) We find that while concluding, the Tribunal has found reasonable and fair to apply @ 6% on the bogus purchases for Shri Milind M. Mestry MA No. 218/M/2021 3 We have heard submissions of the Ld. DR and perused the relevant order of the Tribunal. The relevant para 5 of the Tribunal is 5. After hearing ld DR and perusing the material on record, we observe that in this case, undisputedly, assessee is beneficiary of bogus hawala purchase entries. We note that the assessee is engaged in manufacturing etal. The AO added the entire purchases to the income of the assessee by treating them as non genuine despite assessing filing all the information on the ground that the assessee failed to produce the supplier. Though the assessee did not e ld CIT(A) to attend the hearing the appeal was parte. In our opinion even in the case of bogus purchases where the sales are not disputed by the AO, 100% is excessive and unreasonable in view of the nature of business of the assessee and profit in that line of assessee. However we certainly feel that some estimated profit on the said bogus purchases has to be brought to tax as the AO In our view it would be said bogus purchases to assess the profits. Accordingly, we set aside the order of CIT(A) and (emphasis supplied externally) the Tribunal has found pply @ 6% on the bogus purchases for assessing the profit of the assessee. Therefore, mention of the r 4% in subsequent para is a therefore, we accordingly direct to substitute the same with 6%. The relevant sentence of the para 5, therefore shall “accordingly, we set aside the order of the Ld. CIT(A) and direct the AO to make addition @ 6% on the same 6. The Miscellaneous Application of the Revenue is disposed off as directed above. Order pronounced in the Court on Sd/- (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 06/07/2022 Rahul Sharma, Sr. P.S. assessing the profit of the assessee. Therefore, mention of the r 4% in subsequent para is a mistake apparent from record and therefore, we accordingly direct to substitute the same with 6%. The f the para 5, therefore shall be “accordingly, we set aside the order of the Ld. CIT(A) and direct the AO to make addition @ 6% on the same”. The Miscellaneous Application of the Revenue is disposed off ed in the Court on 06/07/2022. Sd/- RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Shri Milind M. Mestry MA No. 218/M/2021 4 assessing the profit of the assessee. Therefore, mention of the rate @ mistake apparent from record and therefore, we accordingly direct to substitute the same with 6%. The be read as under: “accordingly, we set aside the order of the Ld. CIT(A) and direct the The Miscellaneous Application of the Revenue is disposed off OM PRAKASH KANT) MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Shri Milind M. Mestry MA No. 218/M/2021 5 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai