INCOME TAX OFFICER-25(3)(3), MUMBAI vs. RAMESH MADHAVJI DOSHI, MUMBAI

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ITA 5665/MUM/2019Status: DisposedITAT Mumbai28 May 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 found the disallowance made by the AO to be on the higher side. The GP estimated at 12.5% by the CIT(A) was considered reasonable and accepted by the assessee.

What were the facts?

The Revenue appealed against the CIT(A)'s order which restricted the disallowance on bogus purchases from 25% to 12.5%. The assessee failed to prove the genuineness of purchases and dealers, but the AO accepted the sales declared.

What were the issues?

Whether the disallowance on account of bogus purchases was correctly estimated by the lower authorities.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI VIKAS AWASTHY

Hearing: 30/03/2021Pronounced: 28/05/2021

अपीलाथ) -ारा/ Appellant by : Shri Sushil Kumar Mishra *ितवाद, -ारा/Respondent by : None सुनवाई क. ितिथ/ Date of hearing : 30/03/2021 घोषणा क. ितिथ/ Date of pronouncement : 28/05/2021 आदेश/ ORDER PER VIKAS AWASTHY, J.M: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-53, Mumbai [hereinafter referred to as ‘the CIT(A)’] ' dated 14.06.2019 for the Assessment Year (AY) 2011-12.

2.

The brief facts of the case as emanating from records are: The assessee is engaged in manufacturing and trading in Iron & Steel. On the basis of information

आअसं. 5665/मुं/2019 (िन.व.2011-12) (A.Y.2011-12) received from the Sales Tax Department, Government of Maharashtra, the assessment in the case of assessee for AY 2011-12 was re-opened. As per information received, the assessee had obtained bogus purchase bills amounting to Rs. 39,69,888/- from M/s Jindutt Steel, a declared hawala operator by the Sales Tax Department, Government of Maharashtra. During assessment proceedings, the assessee could not prove genuineness of the dealers and the trail of goods. No stock register, lorry receipt, etc. were furnished by the assessee. The AO accepted the sales and estimated Gross Profit (GP) on bogus purchases @ 25%. Thus, the AO made addition of Rs. 9,92,472/- on account of bogus purchase transactions.

Aggrieved by the assessment order dated 17.03.2016 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). In first appellate proceedings, the CIT(A) restricted the disallowance on bogus purchase by estimating GP at 12.5%. Hence, the present appeal by the Revenue.

3.

Shri Sushil Kuamr Mishra representing the Department vehemently defended the assessment order and prayed for reversing the findings of CIT(A).

4.

Submissions made by ld. DR heard, orders of authorities below examined. Undisputedly, the assessee failed to prove genuineness of the purchases and the dealers. At the same time, the AO accepted the sales declared by the assessee. The AO estimated GP on bogus purchases at 25%. In first appeal the CIT(A) restricted the same to 12.5%. I am of considered view that disallowance made by the AO in respect of bogus purchase was on the higher side. The GP estimated at 12.5% by the CIT(A) is reasonable and the same has been accepted by the आअसं. 5665/मुं/2019 (िन.व.2011-12) (A.Y.2011-12)

assessee. I see no reason to interfere with the findings of CIT(A). Therefore, the impugned order is upheld and the appeal of Revenue is dismissed.

Order pronounced in the open court on Friday, the 28th day of May, 2021.

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