ITO 17 (1)(2), MUMBAI vs. BHAVESH N. SHAH, MUMBAI

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ITA 6905/MUM/2018Status: DisposedITAT Mumbai20 December 2019AY 2009-104 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 CIT(A)'s order, which had restricted the addition to 8% of the alleged bogus purchases. The Tribunal found this estimation to be fair and reasonable.

What were the facts?

The Assessing Officer re-opened the assessment of an iron and steel trader based on information about bogus purchase bills from hawala dealers. The AO made an addition by estimating Gross Profit at 12.5% on these alleged non-genuine purchases.

What were the issues?

Whether the estimation of Gross Profit on non-genuine purchases made by the Assessing Officer was justified, and if the reduction made by the CIT(A) was appropriate.

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 BENCHES “SMC”, MUMBAI

Before: SHRI VIKAS AWASTHY

For Respondent: Shri R.Bhoopathi, DR

Revenue by : Shri R.Bhoopathi, DR Assessee by : NONE Date of Hearing : 17-12-2019 Date of Pronouncement : 20-12-2019 O R D E R This appeal by the Revenue is directed against the order of the Commissioner of Income Tax(Appeals)-55, Mumbai, dated 28-09-2018, for the AY.2009-10.

2.

The brief facts of the case as emanating from records are: The assessee, an individual, is engaged in the business of trading in Iron & Steel. On the basis of the information received from DGIT (Inv.), Mumbai, the assessment of assessee for the AY.2009-10 was re-opened. In the re-assessment proceedings, the Assessing Officer (AO) held that the assessee has indulged in obtaining bogus purchase bills from the following hawala dealers, aggregating to Rs.1,44,41,696/- :

: 2 : S.No Name of the Party Bill Amount Rs. 1 Dhruv Sales Corporation 17,48,727 2 Naman Enterprises 12,72,754 3 C.K.Enterprises 14,31,669 4 Navdeep Trading Corpn., 9,21,431 5 D.K.Enterprise 26,80,351 6 Grifton India Riddhi Enterprise 42,61,643 7 Siddhi Enterprises 21,25,121 Total Rs. 1,44,41,696 The AO vide order dt.09-02-2015 passed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’) made an addition of Rs.18,05,212/- by estimating Gross Profit (GP) @12.5% on non-genuine purchases. Aggrieved against the assessment order, the assessee filed appeal before the CIT(A).

3.

The CIT(A) vide impugned order, partly allowed the appeal of assessee, restricting the addition to the extent of 8% of the alleged bogus purchases. Against the order of First Appellate Authority (FAA), the Revenue is in appeal before the Tribunal.

4.

Shri R.Bhoopathi, representing the Department, vehemently defended the assessment order. The ld.DR submitted that the assessee has failed to substantiate genuineness of the purchases. The assessee could not establish trial of goods originating from suppliers to the godown of the assessee. The ld.DR prayed for modifying the order of CIT(A) and confirming the addition made by AO.

5.

None appeared on behalf of the assessee.

: 3 : 6. The submissions made by ld.DR heard and the material available on record perused. After taking into consideration entire facts and material available on record, I am of considered view that the order of CIT(A) is fair and reasonable and hence, warrants no interference. Estimation of GP @8% over and above the GP declared by assessee on alleged bogus purchases is justified. The impugned order is upheld and the appeal of Revenue is dismissed.

Order pronounced in the open court on Friday the 20th day of December, 2019 (VIKAS AWASTHY) "या"यक सद"य/JUDICIAL MEMBER मुंबई/Mumbai; "दनांक/Dated : 20-12-2019 TNMM आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to :

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