G.M. EXPORTS,MUMBAI vs. ACIT-19(1), MUMBAI

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ITA 5506/MUM/2019Status: DisposedITAT Mumbai05 April 2021AY 2009-103 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found that the Commissioner of Income-Tax (Appeals) correctly estimated the addition at 4% on the bogus purchases. They also found no infirmity in the reopening of the case as the AO had tangible material indicating escapement of income.

What were the facts?

The assessee, a diamond dealer, was assessed after the investigation wing found accommodation purchases of Rs. 71.91 Lacs from a specific group. The Assessing Officer (AO) estimated an addition of 6.99% on these purchases.

What were the issues?

Whether the reopening of the assessment was valid and if the addition on account of bogus purchases was justified and at a reasonable rate.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: HON’BLE SHRI SAKTIJIT DEY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Respondent: Ms. Smita Verma – Ld. Sr. DR

आयकर अपीलीय अधिकरण “एक-सदस्य मामला” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI माननीय श्री शक्तिजीत दे, न्याययक सदस्य एवुं माननीय श्री मनोज कुमार अग्रवाल ,लेखा सदस्य के समक्ष। BEFORE HON’BLE SHRI SAKTIJIT DEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing Through Video Conferencing Mode) आयकरअपील सं./ (धििाारण वर्ा / Assessment Year: 2009-10) G.M. Exports ACIT-19(1) बिाम/ 2nd Floor , Matru Mandir CW-4150, Bharat Diamond Bourse Bandra Kurla Complex Tardeo Road Vs. Bandra (E), Mumbai – 400 051. Mumbai – 400 007. स्थायीलेखासं./जीआइआरसं./PAN/GIR No. AAAFG-1496-J (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : Assessee by : None Revenue by : Ms. Smita Verma – Ld. Sr. DR सुनवाई की तारीख/ : 24/03/2021 Date of Hearing घोषणा की तारीख / 05/04/2021 : Date of Pronouncement आदेश / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)

1.

At the time of hearing, none appeared for assessee. However, the material on record was sufficient for disposal of the appeal. The Ld. DR pleaded for dismissal of the appeal. The assessee is aggrieved by confirmation of certain addition on account of alleged bogus purchases vide order dated 28/06/2019 as passed by Ld. Commissioner of Income- Tax (Appeals)-29, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No.CIT(A)-29/IT-19(1)/IT-683/2017-18. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 2.1. The material facts are that the assessee being resident firm stated to be engaged as dealer of diamond was assessed u/s 143(3) r.w.s. 147 on 06/12/2016. The assessment was so framed pursuant to receipt of certain information from investigation wing wherein it transpired that the assessee procured accommodation purchase bills of Rs.71.91 Lacs from 2 entities belonging to Shri Bhanwarlal Jain Group as detailed in the assessment order. Accordingly, the case was reopened as per law and notice u/s 148 was issued on 11/03/2016 which was followed by statutory notices u/s 143(2) & 142(1) calling for requisite details from assessee to substantiate the purchases so made. 2.2 Though the assessee filed certain documentary evidences in support of purchases, however, going by the findings of investigation wing in the case of Shri Bhanwarlal Jain Group, Ld. AO estimated an addition of 6.99% against these purchase. This was in view of the fact that the assessee had demonstrated corresponding sales against the purchases. 3. Upon further appeal, Ld. CIT(A) while rejecting legal grounds raised

by the assessee, directed Ld. AO to restrict the addition to the extent of 4%. Still aggrieved, the assessee is in further appeal before us.

4. Upon perusal of impugned order, we find that Ld. CIT(A) has clinched the issue in the right perspective. The factual matrix of the case made it a fit case for estimating additions against tainted purchases. The rate of 4% as estimated by Ld. CIT(A) was quite fair & reasonable. The assessee has also raised legal grounds before us. However, we find no infirmity in reopening the case since Ld. AO was in possession of tangible material which indicated possible escapement of income in the hands of the assessee. Nothing more was required at this stage to reopen the case. Finding no reasons to interfere in the impugned order, in any manner, we dismiss the appeal.

5. The appeal stands dismissed. Order pronounced on 5th April, 2021.

Sd/- Sd/- (Saktijit Dey) (Manoj Kumar Aggarwal) न्याययक सदस्य / Judicial Member लेखा सदस्य / Accountant Member मुंबई Mumbai; यदनांक Dated : 05/04/2021 Sr.PS, Jaisy Varghese आदेशकीप्रधिधलधपअग्रेधर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुि(अपील) / The CIT(A) 4. आयकरआयुि/ CIT– concerned 5. यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशाि सार/ BY ORDER,

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