M/S ROOPLAXMI STEEL, Mumbai V. ITO19(3)(1), Mumbai

MA 266/MUM/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4848 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: JAIN DIXIT
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE S/SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND S/SHRI AMARJIT SINGH, JUDICIAL MEMBER M.A. No. 266/M/2020 (Arising out of ITA No. 2240/Mum/2019) (निर्धारणवर्ा / Assessment Year: 2011-12) M/s. Rooplaxmi Steel 26, Durgadevi Street, Shop No.1, Kumbharwada, Mumbai- 400004. बिधम / Vs. ITO-19(3)(1) 2 nd Floor, Matru Mandir Bldg. Grant Road, Mumbai-400007. स्थायीलेखासं/.जीआइआरसं/.PA N/GI R No. : AAF F R8 02 1D (अपीलाथी/ Appellant)/Applicant .. (प्रत्यथी / Respondent) सुनवाईकीतारीख / Date of Hearing: 11/03/2022 घोषणाकीतारीख /Date of Pronouncement: 06/04/2022 ORDER PER AMARJIT SINGH, JM This order shall dispose off the Miscellaneous Application Bearing No. 266/Mum/2020 moved by applicant/appellant arising out of ITA. No. 2240/Mum/19 for the A.Y.2011-12 decided on dated 17.01.2020. 2. It is mentioned in the Miscellaneous Application that the order in the case bearing ITA. No.2240/Mum/2019 for the A.Y.2011-12 has been pronounced vide order dated 17.01.2020. The Hon’ble ITAT has restricted the addition to the extent of 6% of the bogus purchase on the basis of the Gross Profit (GP) estimation. The assessee submitted the decision in the case of PCIT Vs. M. Haji Adam & Co. (ITA. No. 1004 of 2016 dated 11.02.2019) decided by Hon’ble Bombay High Court but the same was not discussed and described in the order, therefore, the order dated 17.01.2020 is liable to be recalled in the interest of justice. 3. Notice given. Assessee by: Shri Jain Dixit Revenue by: Shri C.T. Mathew (Sr. AR) M.A. No.266/Mum/2020 A.Y.2011-12 4. We have heard the argument advanced by the Ld. Representative of the parties and perused the record.Before going further, we deem it necessary to advert the finding of the Hon’ble ITAT in the appeal bearing ITA. No.2240/Mum/2019 on record. The relevant finding has been given in para nos. 6 & 7 which is hereby reproduced as under: - “6. At the very outset, the Ld. Representative of the assessee has argued that the issue has duly been covered by the decision of the Hon’ble ITAT in the assessee’s own case for the A.Y. 2009-10 Bearing ITA. No.2151/M/2017 dated 30.06.2017. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. Before going further, we deem it necessary to advert the finding of the Hon’ble ITAT in the assessee’s own case in ITA. No.215/M/2017 dated 30.06.2017 which is hereby reproduced as under: - “5. I have heard the rival contentions and gone through the facts and circumstances of the case. Now, before me, assessee contended that first profit element applied by the CIT(A) is on higher side and he requested for reduction in profit rate. I find that the assessee is in the business of dealing in steel and Gross Profit declared by assessee in normal course of business has already been declared by assessee in its books of accounts. Accordingly, the profit declared on bogus purchases cannot be estimated again. I have considered the issue and find that the purchases made from these hawala parties are not proved by the assessee and he admitted. In such situation the assessee might have made purchases from grey market and obtained these bogus bills from hawala parties by paying some commission. In these circumstances the assessee might have saved VAT and also purchased material from grey market at a lower price. For that the CIT(A) has added the entire bogus purchases and according to me this is unreasonable and accordingly a reasonable profit rate is to be estimated. I find that the in the decision of the Hon’ble Gujarat High Court in the case of CIT vs. Smith P Seth 365 ITR 451(Guj), wherein the profit rate is estimated at 12.5%. Accordingly, I am of the view that profit rate at the rate applied by CIT(A) at 12.5% is on higher side for the reason that the assessee is engaged in dealing in steel where margin of profit is very less i.e. GP of 10.75% and NP at 0.90%. According to me, the profit rate in this case should be applied @ of 6% which will meet the end of justice only qua the bogus purchase. The assessee has also disclosed GP on M.A. No.266/Mum/2020 A.Y.2011-12 bogus purchases and to give credit for the same, the estimation of profit @ 6% will be sufficient. I confirm the order of CIT(A). The appeal of assessee is partly allowed.” 7. On appraisal of the above mentioned finding, we find that the under the similar circumstances, the Hon’ble ITAT has affirmed the addition to the extent of 6% of the bogus purchase. Accordingly, by honoring the decision of the Hon’ble ITAT in the Assessee own case supra, we restrict the addition to the extent of 6% of the bogus purchase. Accordingly, this issue is decided in favour of the assessee against the revenue.” 5. On appraisal of the above mentioned finding, we find that the Hon’ble ITAT followed the assessee’s own case for the A.Y. 2009-10 bearing ITA. No.2151/Mum/2017 dated 30.06.2017. The finding has been reproduced above, therefore, there is no need to discussed again. Accordingly, the Hon’ble ITAT has confirmed the addition to the extent of 6% of the bogus purchase. The appeal file has thoroughly examined and we find that the assessee nowhere produced the copy of judgement in the case of PCIT Vs. Mohommad Haji Adam & Co (supra). Nor any written submission has been produced in which the said judgment is mentioned. We nowhere found any error in the order passed by Hon’ble ITAT bearing ITA. No.2240/Mum/2019 dated 17.01.2020. Accordingly, we dismissed the present Miscellaneous Application. In the result, the miscellaneous application filed by the assessee is hereby ordered to be dismissed. Order was pronounced in the open court on 06/04/2022 Sd/- Sd/- (OM PRAKASH KANT) (AMARJIT SINGH) लेखासदस्य / ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER Mumbai, Dt: 06/04/2022 Vijay Pal Singh, (Sr. PS) M.A. No.266/Mum/2020 A.Y.2011-12 आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent. 3. आयकरआयुक्त(अपील)/ The CIT(A)- 4. आयकरआयुक्त/ CIT 5. यवभागीयप्रयतयनयध,आयकरअपीलीयअयधकरण ,मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल/ Guard file. आदेशधिुसधर/ BY ORDER, सत्यायपतप्रयत //True Copy// उि/सहधयकिंजीकधर/(Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण ,मुंबई / ITAT, Mumbai