HANSABEN A SHAH,MUMBAI vs. ITO WD 19(1)(5), MUMBAI

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ITA 1979/MUM/2017Status: DisposedITAT Mumbai28 September 2018AY 2010-114 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 upheld the addition made by the Assessing Officer on account of bogus purchases, estimating profit at 12.5%. The assessee's failure to prove the genuineness of purchases before any authority led to this decision.

What were the facts?

The assessee, engaged in steel trading, had her assessment reopened based on information about bogus purchases from hawala operators. Despite furnishing some details, she failed to conclusively prove the genuineness of purchases to the Assessing Officer and the Commissioner (Appeals).

What were the issues?

The primary issue was the genuineness of purchases made by the assessee, which were alleged to be accommodation entries from hawala operators.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY

For Respondent: Shri Swapan Kumar Bepari

Aforesaid appeal has been filed by the assessee challenging the order dated 20th February 2017, passed by the learned Commissioner (Appeals)–29, Mumbai, for the assessment year 2010–11.

2.

The dispute in the present appeal is confined to the addition made on account of bogus purchases.

3.

Brief facts are, the assessee an individual is engaged in the business of trading in steel and alloy steel. For the assessment year

2 Hansaben A. Shah under dispute, the assessee filed her return of income on 13th October 2010, declaring income of ` 13,23,080. The return of income filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 (for short “the Act”) accepting the returned income. Subsequently, on the basis of information received from DGIT (Inv.), Mumbai and the Sales Tax Department Maharashtra Government that the assessee is a beneficiary of accommodation entries provided by hawala operators towards bogus purchase invoices, re–opened the assessment under section 147 of the Act. During the assessment proceedings, the Assessing Officer noticing that as per the information from the Sales Tax Department purchases worth ` 14,43,676 made by the assessee from various parties are non–genuine, called upon the assessee to prove the genuineness of purchases by producing necessary details as mentioned in the assessment order. As observed by the Assessing Officer, the assessee, though, furnished some details, however, the assessee could not conclusively prove the genuineness of purchases. Accordingly, the Assessing Officer proceeded to treat the purchases made by the assessee as non–genuine and estimated profit @ 12.5% on the total non–genuine purchases of ` 2,60,27,352 which worked out to ` 32,53,420. Being aggrieved of such addition, though, the assessee preferred appeal before the first appellate authority, however, the learned Commissioner (Appeals) also sustained the addition made by the Assessing Officer.

3 Hansaben A. Shah

4.

When the appeal was called for hearing, no one was present for the assessee in spite of service of notice which is evident from the postal acknowledgment kept on record. Therefore, I proceed to dispose off the appeal ex parte qua the assessee after hearing the learned Departmental Representative.

5.

I have heard the learned Departmental Representative and perused the material on record. As could be seen from the facts on record, the Assessing Officer had in his possession specific information/material indicating that the assessee is a beneficiary of accommodation entries provided by entities which are identified as hawala operators by the Sales Tax Department of Maharashtra Government. Neither before the Assessing Officer nor before the first appellate authority the assessee could conclusively prove the genuineness of purchases claimed to have been made from the concerned parties. Even before me, by remaining absent assessee has not controverted the factual finding of the Departmental Authorities. In the aforesaid facts and circumstances, I am inclined to uphold the addition made @ 12.5% of the bogus purchases. Grounds raised are dismissed.

4 Hansaben A. Shah

6.

In the result, assessee’s appeal is dismissed. Order pronounced in the open Court on 28.08.2018

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