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Income Tax Appellate Tribunal, मुंबई पीठ “एसएमसी”
Before: SHRI VIKAS AWASTHY & SHRI G.MANJUNATHA
अपीलाथ� �वारा/ Appellant by : Ms. R.Kavitha ��तवाद� �वारा/Respondent by : None सुनवाई क� �त�थ/ Date of hearing : 17/02/2020 घोषणा क� �त�थ/ Date of pronouncement : 20/03/2020 आदेश/ ORDER PER VIKAS AWASTHY, JM:
These appeals by the Revenue are directed against the orders of Commissioner of Income Tax(Appeals)-38, Mumbai (in short ‘the CIT(A)’) for the assessment years 2010-11 and 2011-12, respectively. Both the impugned orders are of even date i.e. 29/06/2018. Since the facts in both the impugned assessment years are similar and the grounds raised by the Revenue in both the appeals are identical, these appeals are taken up together for adjudication and are decided vide this common order. However, for the sake of convenience the facts are narrated from the appeal for assessment year 2010-11.
ITA NO.7054/Mum/2018 (A.Y. 2010-11)
The brief facts of the case as emanating from records are: The assessee is engaged in the business of trading in M.S Seamless Pipes and other types of Pipes. The assessment for assessment year 2010-11 was reopened by the Assessing Officer on the basis of information received from the Investigation Wing of the Department. As per the information received, the assessee had obtained bogus purchase bills aggregating to Rs.1,25,07,379/- from the declared hawala dealers. The Assessing Officer made addition to the extent of 12.5% of the alleged bogus purchases. Aggrieved against the assessment order dated 04/03/2016 passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 ( in short ‘the Act’ ), the assessee filed appeal before the CIT(A). The first appellate authority after considering the facts of the case, material available on record and the decision of the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth reported as 356 ITR 451 restricted the disallowance to 9.5% of the alleged bogus purchases. Against the aforesaid findings of the CIT(A), the Revenue is in appeal before the CIT(A).
3 Ms. R. Kavitha, representing the Department submitted that assessee had obtained bogus purchase bills from the declared hawala dealers. The assessee failed to furnish documentary evidences/details to substantiate genuineness of the purchases. Neither the parties from whom alleged purchases made were produced nor the trail of goods was shown by assessee before the Assessing Officer. The ld.Departmental Representative submitted that the Assessing Officer was justified and reasonable in estimating G.P on impugned purchases @12.5%.
We have heard the submissions made by ld. Departmental Representative and have examined the order of authorities below. The assessee had allegedly obtained bills amounting to Rs.1,25,07,379/- from hawala dealers. The Assessing Officer estimated G.P @12.5% on such purchases. The CIT(A) after considering the Net Profit declared by the assessee, reduced the same from GP estimated by Assessing Officer. Hence, the CIT(A) restricted the addition to 9.30% of the alleged total bogus purchases. We do not find any infirmity in the impugned order, hence, the same is upheld and the appeal of the Revenue is dismissed being devoid of any merit.
The facts in the assessment year 2011-12 are identical to the facts in assessment year 2010-11, except for the amount of addition. The Assessing Officer in assessment year 2011-12 made addition of Rs.4,72,039/- by estimating GP @ 12.5% on total bogus purchases of Rs.37,76,309/-. The CIT(A) reduced the GP estimated by Assessing Officer by the Net Profit ratio declared by the assessee and restricted the disallowance to 9.28% of the total alleged bogus purchases. Since the facts are similar and the grounds raised by the Revenue assailing findings of CIT(A) are identical to the one raised in 2010-11, the findings given while adjudicating the appeal of the Revenue for assessment year 2010-11 would mutatis mutandis apply to the assessment year 2011-12 as well. For the similar reasons, the appeal of the Revenue is dismissed being devoid of any merit.
In the result, both the appeals by Revenue are dismissed.
Order pronounced in the open court on Friday the 20th day of March, 2020.