VIKESH BABULAL JAIN, MUMBAI v. ITO 19 (3)(5), MUMBAI

ITA 6450/MUM/2019 | 2009-2010
Pronouncement Date: 05-05-2021 | Result: Partly Allowed

Appeal Details

RSA Number 645019914 RSA 2019
Assessee PAN AGPKJ6664K
Bench Mumbai
Appeal Number ITA 6450/MUM/2019
Duration Of Justice 1 year(s) 6 month(s) 25 day(s)
Appellant VIKESH BABULAL JAIN, MUMBAI
Respondent ITO 19 (3)(5), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 05-05-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 05-05-2021
Last Hearing Date 05-05-2021
First Hearing Date 05-05-2021
Assessment Year 2009-2010
Appeal Filed On 10-10-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI VIKAS AWASTHY JUDICIAL MEMBER . 6450 //2019 (. . 2009-10 ) ITA NO.6450/MUM/2019 (A.Y.2009-10) VIKESH BABULAL JAIN (PROP. OF B.J. METAL & ALLOYS) R. NO. 8 1 ST FLOOR 59/65 GURUKRUPA BUILDING DURGADEVI STREET MUMBAI- 400004 PAN: AGPKJ6664K ...... ) / APPELLANT VS. ITO WARD-19(3)(5) MATRU MANDIR TARDEO MUMBAI-400007. ..... * / RESPONDENT ) -/ APPELLANT BY : SH. SATISH R. MODY * -/ RESPONDENT BY : MS. SMITA VERMA . / DATE OF HEARING : 05/05/2021 . / DATE OF PRONOUNCEMENT : 05/05/2021 / ORDER PER VIKAS AWASTHY J.M: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-29 MUMBAI [HEREINAFTER REF ERRED TO AS THE CIT(A)] DATED 09.08.2019 FOR THE ASSESSMENT YEAR (AY) 2009- 10. 2. SHRI SATISH R. MODY APPEARING ON BEHALF OF THE A SSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN TRADING OF FERROUS AND NON-F ERROUS METALS. THE ASSESSMENT IN THE CASE OF ASSESSEE FOR AY 2009-10 WAS RE-OPENE D ON THE BASIS OF INFORMATION 2 . 6450 //2019 (. .2009-10 ) ITA NO.6450/MUM/2019 (A.Y.2009-10) RECEIVED FROM THE SALES TAX DEPARTMENT THAT THE AS SESSEE HAS OBTAINED BOGUS PURCHASE BILLS AGGREGATING TO RS. 1 32 99 451/- FRO M VARIOUS (10) DEALERS DECLARED AS HAWALA OPERATORS BY THE SALES TAX DEPARTMENT GO VERNMENT OF MAHARASHTRA. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE FURNISH ED COPIES OF LEDGER ACCOUNTS COPY OF PURCHASE INVOICES BANK STATEMENT S ETC. TO PROVE GENUINENESS OF THE PURCHASES. HOWEVER THE AO DISALLOWED 12.5% OF THE TOTAL ALLEGED BOGUS PURCHASES AND MADE ADDITION OF RS. 16 62 430/-. 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 23.03.20 15 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT 1961 ( HEREINAFTER REFERRED TO AS THE ACT). THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) WITHOUT APPRECIATING FACTS AND THE GROSS PROFIT (GP) DECLAR ED BY THE ASSESSEE CONFIRMED THE ADDITION AT 12.5%. THE LD. AR POINTED THAT THE ASSESSEE HAS DECLARED GP OF 2.85% OF THE TOTAL SALES. THE GP EARNED BY THE WHOL ESALERS IN THIS LINE OF BUSINESS IS 2.5% TO 3.5%. THE LD. AR FURTHER SUBMITTED THAT THE APPEAL MAY BE DECIDED IN ACCORDANCE WITH THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. MOHD. HAJI ADAM & CO. IN ITA NO. 1004 OF 2016 D ECIDED ON 11.02.2019. 4. PER CONTRA MS. SMITA VERMA REPRESENTING THE DEP ARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSI NG THE APPEAL OF ASSESSEE. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED T O DISCHARGE HIS ONUS IN PROVING GENUINENESS OF THE PURCHASES AND THE DEALERS. NOTIC ES WERE ISSUED TO THE DEALERS UNDER SECTION 133(6) OF THE ACT BY THE AO ON THE AD DRESSES FURNISHED BY THE ASSESSEE. NOTICES WERE RECEIVED BACK UNSERVED AS TH E ADDRESSES WERE EITHER INCOMPLETE OR INCORRECT. FURTHER THE ASSESSEE FAIL ED TO PROVE TRAIL OF GOODS AS NO OCTRY RECEIPT TRANSPORT RECEIPT DELIVERY CHALLANE S INWARD REGISTER ETC. WERE 3 . 6450 //2019 (. .2009-10 ) ITA NO.6450/MUM/2019 (A.Y.2009-10) PRODUCED BY THE ASSESSEE. THE ESTIMATION OF GP ON B OGUS PURCHASES AT 12.5% IS FAIR AND REASONABLE HENCE THE SAME SHOULD BE SUST AINED. . 5. BOTH SIDES HEARD ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSEE HAS ALLEGEDLY OBTAINED BOGUS PURCHASE BILLS AMOUNTING T O RS. 1 32 99 452/- FROM DECLARED HAWALA OPERATORS. DURING ASSESSMENT PROCEE DINGS THE ASSESSEE COULD NEITHER PRODUCE DEALERS NOR ANY CONFIRMATIONS FROM THE DEALERS WERE FURNISHED BY THE ASSESSEE. THUS THE ASSESSEE FAILED TO PROVE THE AUTHENTICITY OF THE DEALERS AND GENUINENESS OF THE PURCHASES. 6. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PCI T VS. PARAMSHAKTI DISTRIBUTORS PVT. LTD. IN ITA NO. 413 OF 2017 DECID ED ON 15.07.2019 HAS HELD THAT IN THE CASE OF BOGUS PURCHASE TRANSACTIONS IT IS O NLY THE PROFIT EMBEDDED IN SUCH PURCHASES HAS TO BE BROUGHT TO TAX. IN THE PRESENT CASE ESTIMATION OF GP ON BOGUS PURCHASE AT 12.5% BY THE AO/CIT(A) IS ON THE HIGHER SIDE. GENERALLY IN TRADING OF FERROUS AND NON-FERROUS METALS THE GP R ANGES BETWEEN 5 TO 8%. TAKING INTO CONSIDERATION ENTIRETY OF FACTS I AM OF CONS IDERED VIEW THAT ESTIMATION OF GP AT 5.5% OF TOTAL BOGUS PURCHASES WOULD MEET THE END S OF JUSTICE. THE IMPUGNED ORDER IS MODIFIED ACCORDINGLY. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY THE 5 TH DAY OF MAY 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI 3/ DATED: 05/05/2021 SK PS 4 . 6450 //2019 (. .2009-10 ) ITA NO.6450/MUM/2019 (A.Y.2009-10) * 4 * 4 * 4 * 4 COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT 2. * / THE RESPONDENT. 3. 5 ( )/ THE CIT(A)- 4. 5 CIT 5. * . . . / DR ITAT MUMBAI 6. 9 / GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT MUMBAI