ITO 9 (3)(1), MUMBAI vs. M/S DHARIA SWITCHGEAR & CONTROLS PVT LTD., MUMBAI

PDF · subscribers
ITA 7732/MUM/2019Status: DisposedITAT Mumbai01 June 2021AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the sales turnover was not in doubt, primary purchase documents were available, and payments were made through banking channels, the addition should be an estimation of the profit element. The CIT(A)'s estimation of 12.5% was deemed sufficient.

What were the facts?

The assessee, engaged in manufacturing electric panels, faced allegations of bogus purchases amounting to Rs. 23.84 Lacs. The assessee provided purchase bills and bank statements, but failed to produce suppliers for confirmation.

What were the issues?

Whether disallowance of purchases is justified when primary documents and banking channel payments are available, and if so, to what extent. The issue is about estimating profit on alleged bogus purchases.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Respondent: Shri Bharat Andhale, Ld. Sr. DR

आयकर अपीलीय अधिकरण “डी” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI माननीय श्री महावीर स िंह, उपाध्यक्ष एवुं माननीय श्री मनोज कुमार अग्रवाल ,लेखा दस्य के मक्ष। BEFORE HON’BLE SHRI MAHAVIR SINGH, VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing Through Video Conferencing Mode) 1. आयकरअपील िं./ (धििाारण वर्ा / Assessment Year: 2011-12) ITO 9(3)(1), M/s Dharia Switchgear & R. No. 419, 4th floor Controls Pvt. Ltd. बिाम/ Aaykar Bhavan, Churchgate, 38, Mistry Industrial Complex, Vs. Mumbai-400 020 Cross Road, MIDC Andheri (East),Mumbai-400 053 स्थायीलेखा िं./ जीआइआर िं./ PAN/GIR No. AAACD-1380-M (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : Assessee by : None Revenue by : Shri Bharat Andhale, Ld. Sr. DR ुनवाई की तारीख/ : 01/06/2021 Date of Hearing घोषणा की तारीख / : 01/06/2021 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)

1.

Aforesaid appeal by revenue for Assessment year [AY in short] 2011-12 contest the order of Ld. Commissioner of Income Tax (Appeals)-16, Mumbai [in short CIT(A) ] dated 30/09/2019 which has provided certain relief to the assessee on account of alleged bogus purchases.

2.

Though none appeared for assessee, however, material on record was sufficient for disposal of the appeal. The Ld. DR pleaded for restoration of assessment framed by Ld. AO. 3.1 The material facts are that the assessee being resident corporate assessee stated to be engaged in manufacturing of electric panel etc. was assessed for the year under consideration u/s 143(3) r.w.s. 147 on 30/12/2016. The original return filed by assessee was processed u/s 143(1). However, pursuant to receipt of certain information from DGIT (Inv.) / Sales Tax Department, Mumbai, it transpired that the assessee made alleged bogus purchases of Rs.23.84 Lacs from two entities as detailed in the assessment order. Accordingly, the case was reopened as per due process of law and the assessee was required to file requisite details to substantiate the purchases. 3.2 In support of purchases, the assessee furnished copies of purchase bills and bank statements evidencing payment through banking channels. However, Ld.AO disallowed these purchases and added the same to the income of the assessee. 4. Before Ld. CIT(A), the assessee relied on the documentary evidences furnished in support of the purchase transactions but it failed to produce any of the suppliers for confirmation of transactions. The Ld. CIT(A), inter-alia, considering catena of judicial decisions including the decision of Hon’ble Gujarat High Court in Simit P.Sheth V/s CIT (2012; 356 ITR 451), restricted the additions to 12.5% and granted partial relief. Aggrieved, the revenue is in further appeal before us. 5. Going by the factual matrix as enumerated in the orders of lower authorities, we find that the Sales Turnover was not in doubt and the assessee was in possession of primary purchase documents. The payment to the suppliers was through banking channels. There could be no sale without actual purchase of material keeping in view the assessee’s nature of business. The facts of the case made it a fit case to estimate the profit element embedded in these transactions. The Ld. CIT(A), after due consideration of assessee’s submissions as well as material on record, estimated the additions @12.5% which is more than enough to take care of the leakage of revenue. Therefore, the estimation could not be termed as unjustified, in any manner. Finding no reason to interfere in the impugned order, we dismiss the appeal. 6. The appeal stands dismissed.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →