RAMNIKLAL S. SAVLA,MUMBAI vs. ITO-19(3)(1), MUMBAI

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ITA 4239/MUM/2017Status: DisposedITAT Mumbai23 November 2017AY 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 found no infirmity in the order of the CIT(A), who had confirmed the addition of 12.5% of the alleged bogus purchases but directed a reduction of the Gross Profit already shown by the assessee on such purchases.

What were the facts?

The Assessing Officer (AO) received information that the assessee had availed accommodation entries for purchases totaling Rs. 2,33,89,804/- from six parties. Despite attempts to verify, the AO found the parties to be untraceable and no supporting documents for genuine transactions were produced.

What were the issues?

Whether purchases from parties providing accommodation entries are genuine, and the validity of additions made by the AO based on such information.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 148,Section 142(1),Section 143(3),Section 147,Section 133(6)

AI-generated summary — verify with the full judgment below

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

Before: SHRI D.T. GARASIA

For Respondent: Smt. N. Hemalatha, D.R
Hearing: 06.11.2017Pronounced: 23.11.2017

Per D.T. Garasia, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order dated 03.03.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2010-11.

2.

The short facts of the case are that the assessee filed his return of income for the A.Y.2010-11 on 22.9.2010 declaring total income of Rs.3,56,462/-. The return of income was processed u/s.143(1) of the I.T Act. Subsequently, the Assessing Officer (hereinafter referred to as the AO) received information from the DGIT(Inv.), Mumbai who in turn received information from the sales tax department about some parties who were providing hawala entry/accommodation 2 Shri Ramniklal S. Savla entries for purchases. The information in possession of the AO was that the assessee has availed of accommodation entries for purchases from 6 parties totaling to Rs.2,33,89,804/- The details of the parties are as under :- Sr. Name of the party Amount No.

1.

Mumbai Metal Corporation 3,54,640/- 2. Monu Metal 4,24,037/- 3. Mona Metals Metalex Metal 6,41,946/- Corporation 4. Goodluck Metals 77,80,44/- 5. Good Luck Industries 58,41,639/- 6. Mahalaxmi Steel (India) 83,47,102/- Total 2,33,89,804/-

3.

On the basis of this information, the AO issued notice u/s.148 which was subsequently followed by notice u/s.142(1) and 143(2) and completed the assessment u/s.143(3) r.w.s.147 on 20.1.2016. The AO had information that the assessee had made purchases from the above mentioned 6 parties to the tune of Rs.2,33,89,804/- and that these parties were involved in providing mere accommodation entries with no genuine transactions. In order to verify the genuineness of the purchases claimed by the assessee from these parties, the AO asked the assessee to furnish supporting documents for corresponding sales affected. The assessee has furnished the addresses of the above mentioned parties. The AO therefore issued notices u/s. 133(6) to the above parties, but the same were returned back unserved by the postal authorities with the remarks 'not known' or 'left'. The AO further held that no documents such as delivery challans, octroi receipts, transportation details etc. were produced

3 Shri Ramniklal S. Savla during the course of assessment proceedings. The AO further held that mere filing of evidences in support of purchases and payments made through account payee cheques cannot be conclusive in a case where genuineness of delivery/transaction is in doubt and held that the payments made through account payee cheques are not sacrosanct and further relying on the Gujarat High Court decision of CIT vs. Simit P. Sheth 356 ITR 451 proceeded to make an addition @12.% of the total purchases of Rs.2,33,89,804/- which comes to Rs.29,23,7267/-

4.

Matter carried to the Ld. CIT(A) and the Ld. CIT(A) has partly allowed the claim by observing as under:

“3.3.2. The action of the AO in making an addition of 12.5% of the alleged bogus purchases is confirmed. However, the AO is directed to reduce the GP already shown by the appellant on such purchases. This ground of appeal is partly allowed.”

5. Before me none appeared on behalf of the assessee. I find that Ld. CIT(A) has discussed various laws. I find no infirmity in the order of the Ld. CIT(A). Hence, I have no alternative but to accept the order of the Ld. CIT(A).

6.

In the result, appeal of the assessee is dismissed.

Order pronounced in the open court on 23.11.2017.

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