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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI VIKAS AWASTHY
अपीलाथ) -ारा/ Appellant by : None *ितवाद, -ारा/Respondent by : Ms. Smita Verma सुनवाई क. ितिथ/ Date of hearing : 04/05/2021 घोषणा क. ितिथ/ Date of pronouncement : 07/06/2021 आदेश/ ORDER PER VIKAS AWASTHY, J.M: These two appeals by the assessee are directed against the order of Commissioner of Income Tax (Appeals)-6, Mumbai [hereinafter referred to as ‘the CIT(A)’]. In , the assessee has assailed the order
आअसं. 3836/मुं/2019 (िन.व.2010-11) (A.Y.2010-11) आअसं. 3837/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) of CIT(A) for AY 2010-11 and in ITA No. 3837/Mum/2019, the assessee has impugned the order of CIT(A) for AY 2011-12. Both the impugned orders are of even date i.e. 01.04.2019. Since, the facts and the grounds raised in both the appeals are identical, these appeals are taken up together for adjudication and are decided by this common order.
For the sake of convenience, facts are extracted from the appeal of assessee in AY 2010-11. The assessee is a trader in ferrous and non-ferrous metals. On the basis of information received from the Sales Tax Department, Government of Maharashtra, assessment in the case of assessee for AY 2010-11 was re-opened. During re-assessment proceedings, the AO observed that the assessee had obtained bogus purchase bills aggregating to Rs. 1,10,69,366/- from various (nine) dealers, declared as hawala operators. The AO issued notices under section 133(6) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] to the dealers from whom the assessee had obtained bogus purchase bills. The notices were received back unserved from postal authorities with remarks “not known” or “no such addresses” or “left”. No documents viz. transport receipt, inward register, stock register, etc. were produced by the assessee to conclusively prove trail of goods. The AO made addition of Rs. 13,83,671/- by estimating Gross Profit (GP) @ 12.5% on non-genuine purchases. Against the assessment order dated 17.02.2016 passed under section 143(3) read with section 147 of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of assessee and confirmed the addition. Hence, the present appeal by the assessee.
आअसं. 3836/मुं/2019 (िन.व.2010-11) (A.Y.2010-11) आअसं. 3837/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) 3. Ms. Smita Verma representing the Department strongly defended the impugned order and prayed for dismissing the appeal of assessee. The ld. DR submitted that the assessee could neither produce dealers from whom purchases were made nor any confirmations were filed by the assessee from the dealers. No document was produced by the assessee to show that the goods were indeed received by the assessee. The AO and the CIT(A) in fair and reasonable manner has estimated Gross Profit (GP) on bogus purchase at 12.5%.
Submissions made by ld. DR heard, orders of authorities below examined. The assessee is a trader in ferrous and non-ferrous metals. Undisputedly, the assessee has failed to discharge its onus in proving genuineness of the alleged bogus purchases and the dealers. At the same time, the AO has accepted the sales turnover declared by the assessee. In such circumstances, it is only the profit element embedded in bogus transactions that has to be brought to tax. Generally in trading of ferrous and non-ferrous metals, the GP ranges between 5% to 8%. The assessee has declared GP of 7.55% in AY 2010-11. The estimation of GP on bogus purchase at 12.5% is on higher side. To meet the ends of justice, the impugned order is modified and the GP on bogus purchases is restricted to 7.5% over and above the GP declared by the assessee.
The appeal by assessee is partly allowed, in the terms aforesaid.
आअसं. 3836/मुं/2019 (िन.व.2010-11) (A.Y.2010-11) आअसं. 3837/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) ITA No. 3837/Mum/2019 for AY 2011-12 6. The facts in both the appeals are identical except for the amount of bogus purchases, therefore, the findings given in appeal of assessee in ITA No.3836/Mum/2019 for AY 2010-11 would mutates mutandis apply to the present appeal. Accordingly, the appeal of assessee is partly allowed for parity of reasons.
To sum up, both the appeals by assessee are partly allowed.
Order pronounced in the open court on Monday, the 07th day of June, 2021. Sd/- (VIKAS AWASTHY) �याियक सद�य / JUDICIAL MEMBER मुंबई/Mumbai, 3दनांक/Dated: 07/06/2021 SK, PS *ितिल�प अ4े�षतCopy of the Order forwarded to : *ितिल�प अ4े�षत *ितिल�प अ4े�षत *ितिल�प अ4े�षत 1. अपीलाथ)/The Appellant , 2. *ितवाद,/ The Respondent. 3. आयकर आयु5(अ)/ The CIT(A)- 4. आयकर आयु5 CIT 5. �वभागीय *ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाड9 फाइल/Guard file. BY ORDER, //True Copy//