ACIT 24 (2), MUMBAI vs. MOHD. RAFIQ NAVLAKHIYA, MUMBAI

PDF · subscribers
ITA 893/MUM/2019Status: DisposedITAT Mumbai26 October 2020AY 2010-114 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 upheld the order of the CIT(A), finding that the 8% gross profit estimated by the CIT(A) was close to the assessee's declared gross profit of 8.98% for the relevant period. Therefore, there was no reason to disturb the CIT(A)'s findings.

What were the facts?

The assessee, a trader of telecommunication equipment, was found to have obtained bogus purchase bills from hawala dealers. The Assessing Officer estimated a 13% gross profit on these purchases and made an addition. The CIT(A) reduced this addition to 8% gross profit.

What were the issues?

Whether the CIT(A) was justified in reducing the estimated gross profit on bogus purchases from 13% to 8%.

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 “D”, MUMBAI

Before: SHRI VIKAS AWASTHY & SHRI RAJESH KUMAR

Hearing: 19/10/2020Pronounced: 26/10/2020

आदेश/ ORDER PER VIKAS AWASTHY, JM:

1.

This appeal by the revenue is against the order of Commissioner of Income-Tax (Appeals)-36, Mumbai [In short ‘(CIT(A)’] dated 28.11.2018 for the Assessment Year 2010-11.

2.

The brief facts of the case as emanating from records are: The assessee is a trader and dealer of telecommunication equipments. On the basis of information received from Maharashtra Sales Tax Department the assessment for A.Y. 2010-11 was re-opened on the ground that the assessee has obtainined bogus purchase bills to the tune of Rs. 2,81,77,639/- from notified hawala dealers. The Assessing Officer estimated gross profit on bogus purchases @ 13% and made addition of Rs. 36,63,093/-.

Aggrieved against the assessment order dated 11.02.2016 passed under section 143(3) r.w. section 147 of the Income Tax Act, 1961 (hereinafter referred ‘the Act’), the assessee filed appeal before the CIT(A). The First Appellate Authority after examining the fact of case and considering the average gross profit in the line of electronic trade restricted the addition to 8% gross profit on bogus purchases. Against the findings of CIT(A), the revenue is in appeal before the Tribunal.

3.

Shri Vijay Jaiswal representing the department vehemently defended the assessment order and prayed for setting-aside the findings of CIT(A) and restoring the addition made in assessment order.

5.

Per contra, Shri Virag Shah appearing on behalf of the assessee vehemently defended the order of CIT(A). The ld. AR submitted that Gross Profit @ 13% estimated by Assessing Officer was very much on the higher side. The AR furnished Trading, Profit & Loss A/c for the Financial Year ended on 31.03.2010 to show that the Gross Profit of assessee for the impugned Assessment Year was 8.98% and the CIT(A) has made addition in line with the Gross Profit of the assessee.

6.

We have heard the submissions made by rival sides and have examined the orders of authorities below. Admittedly, the assessee had indulged in obtaining bogus purchase bills from hawala dealers. The assessee could not furnish the documents viz. Delivery challans, Lorry receipts, stock register etc. to substantiate trail of goods. The Assessing Officer estimated Gross Profit on such unproved purchases @ 13%. In first appellate proceedings, the CIT(A) reduced the Gross Profit to 8%. The assessee has filed copy of audited accounts for the Financial Year 2009-10. As per the documents furnished by the assessee, the Gross Profit for the period relevant to Assessment Year under appeal is 8.98%.

7.

We are of considered view that the Gross Profit estimated by CIT(A) is nearly the same as declared by the assessee. We find no reason to disturb the order of CIT(A), hence, the same is upheld and the appeal of revenue is dismissed sans merit.

8.

In the result, appeal of the revenue is dismissed.

Order pronounced in open Court on Monday the 26th day of October, 2020.

More judgments on Section 147

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

Recent GST High Court judgments

Search GST case law →