MOHAMMED HUSSAIN KHAN,MUMBAI vs. INCOME TAX OFFICER-26(2)(3), MUMBAI

PDF · subscribers
ITA 6163/MUM/2017Status: DisposedITAT Mumbai12 January 2018AY 2009-105 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to allow credit for the Gross Profit declared by the assessee and estimate the remaining profit at 8% of the total bogus purchases.

What were the facts?

The Assessing Officer made additions on account of alleged bogus purchases after the assessee failed to produce the parties for verification. The CIT(A) had confirmed additions at 15% of the bogus purchases.

What were the issues?

Whether the addition on account of bogus purchases was justified and if so, to what extent.

Which sections of the Income-tax Act were involved?

Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI D.T. GARASIA

For Appellant: Shri S.M. Makhija, A.R., Shri Krunal Suchak, A.R
For Respondent: Ms. N. Hemalatha, D.R
Hearing: 27.11.2017Pronounced: 12.01.2018

Per D.T. Garasia, Judicial Member:

1.

The above titled appeals have been preferred by two different assessees against the orders of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] dated 13.07.2017 in 2 & ors Shri Anil Dadarao Garad & ors ITA No.6161/M/2017, dated 30.06.2017 in ITA No.6163/M/2017 and dated 14.07.2017 in ITA Nos.6164 & 6165/M/2017.

2.

During the course of hearing we find that the ITA No.6163/M/2017 is time barred by 11 days, ITA Nos.6164 & 6165/M/2017 are time barred by 17 days. The assessee has given the affidavit and stated that assessee was busy in business work and he was out of station for some time. Therefore, there was delay of 11 to 17 days. Therefore, we condone the delay.

ITA No.6161/M/2017 for A.Y. 2009-10

3.

The brief facts of the case are that during the year under consideration the Assessing Officer (hereinafter referred to as the AO) found that assessee had made bogus purchases from following parties: Sr. Name of the party Amount of No. Purchase (Rs) 1. M/s. Ami Traders 3,03,909/- 2. M/s. Smartlink Tradex Pvt. Ltd. 98,227/- 3. M/s. Bhumi Enterprises 8,81,530/- 4. M/s. Magnum Enterprises 3,24,881/- 5. M/s. Liberty Traders 3,77,541/- 6. M/s. Shah Enterprises 3,42,521/- 7. M/s. Shah Industries 3,47,306/- Total 26,75,915/-

3. The assessee was asked to produce the above parties for verification. There was no compliance of notice under section 133(6). Therefore, the AO has made the addition on account of bogus purchases of Rs.26,75,915/-.

3 & ors Shri Anil Dadarao Garad & ors 4. Matter carried to the Ld. CIT(A) and the Ld. CIT(A) has partly allowed the claim of the assessee by confirming the addition @ 15% of the bogus purchases.

5.

I have heard the rival contentions of both the parties. Looking to the facts and circumstances of the case I find that the assessee has already declared the GP. Hence, AO is directed to allow the credit of GP declared by the assessee and deduct the same from 15% and estimate the GP @ 8% of total bogus purchases which comes to Rs.2,14,073/-.

6.

In the result, assessee’s appeal is partly allowed. for A.Y 2009-10 7. In this appeal, during the year, the AO found that assessee had made purchases from following parties: Sr. Name of the company Amount of No. Purchase (Rs)

1. M/s. Siddhi Vinayak Steel 4,48,183/- 2. M/s. Chanchal Tube Corporation 3,58,077/- 3. M/s. Surat Tube Corporation 5,74,548/- 4. M/s. Asian Steel 5,85,329/- 5. M/s. Shiv Industries 8,28,204/- 6. M/s. Rehbar Enterprises 8,31,316/- 7. M/s. BPT Tube Corporation 8,57,763/- 8 M/s. Maruti Steel Traders 17,88,660/- Total 62,72,080/-

8.

I find that similar grounds have been taken in for A.Y. 2009-10. Hence, following the same ratio I decide this appeal also. Accordingly, the AO is directed to estimate the GP @ 8% which comes to Rs.5,01,766/-. for A.Y 2010-11 10. In this appeal, during the year, the AO found that assessee had made purchases from following parties: Sr. Name of the company Amount of No. Purchase (Rs)

1. M/s. Siddhi Vinayak Steel 9,18,436/- 2. M/s. Chanchal Tube Corporation 7,87,420/- 3. M/s. Surat Tube Corporation 5,10,123/- 4. M/s. Asian Steel 5,32,221/- 5. M/s. BPT Tube Corporation 6,01,499/- 6. M/s. Rehbar Enterprises 6,95,666/- 7. M/s. Maruti Steel Traders 15,66,825/- 8 M/s. Shiv Industries 19,66,896/- Total 75,79,086/-

8. I find that similar grounds have been taken in for A.Y. 2009-10. Hence, following the same ratio I decide this appeal also. Accordingly, the AO is directed to estimate the GP @ 8% which comes to Rs.6,06,327/-.

9.

In the result, the appeal of the assessee is partly allowed. for A.Y 2011-12 10. In this appeal, during the year, the AO found that assessee had made purchases from following parties: Sr. Name of the company Amount of No. Purchase (Rs)

1.

M/s. S.K. Trading Co. 6,35,254/- 2. M/s. Siddhi Vinayak Steel 8,40,297/- 3. M/s. Chanchal Tube Corporation 4,00,038/- 4. M/s. Surat Tube Corporation 6,80,199/- 5. M/s. Radhika Enterprises 5,56,131/- 6. M/s. Golden Enterprises 6,20,116/- 7. M/s. Shree Vinayak Enterprises 7,12,397/- 8. M/s. Rehbar Enterprises 10,04,567/-

8. I find that similar grounds have been taken in for A.Y. 2009-10. Hence, following the same ratio I decide this appeal also. Accordingly, the AO is directed to estimate the GP @ 8% which comes to Rs.8,75,969/-.

9. In the result, all the four appeals of the assessee are partly allowed.

Order pronounced in the open court on 12.01.2018.

More judgments on Section 133(6)

All 7,227 judgments and leading authorities on Section 133(6) →

Recent GST High Court judgments

Search GST case law →