ITO-19(3)(1), MUMBAI, PAREL, MUMBAI vs. SAGAR STEEL CORPORATION, MUMBAI

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ITA 2741/MUM/2023Status: DisposedITAT Mumbai22 March 2024AY 2011-128 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12.5% of the bogus purchases, noting that the assessee had provided quantitative details, stock register, and undisputed sales. The Tribunal found no merit in the Revenue's appeal.

What were the facts?

The Assessing Officer (AO) made an addition of 100% of alleged bogus purchases amounting to ₹7,804,309. The assessee had purchased from parties identified as hawala dealers by the Sales Tax Department. The CIT(A) restricted the addition to 12.5% of these bogus purchases.

What were the issues?

Whether the addition for bogus purchases should be 100% or restricted, and whether the CIT(A) erred in admitting new evidence and restricting the addition without a remand report.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 142(1),Section 145(3),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI PRASHANT MAHARISHI, AM & SHRI SANDEEP SINGH KARHAIL, JM

For Appellant: Shri vimal Punmiya, AR
For Respondent: Shri Manoj Kumar Singh, DR
Hearing: 19.03.2024Pronounced: 22.03.2024
1.

This appeal is filed by The Income Tax Officer – 19 (3) (1), Mumbai (the learned AO) for assessment year 2011 – 12 against the appellate order passed by the National Faceless Appeal Centre (NFAC), Delhi (the learned CIT – A) dated 6/6/2023 wherein the appeal filed by the assessee against the assessment order passed under section 147 read with section 144 of The Income Tax Act (The Act) dated 6/12/2016 passed by the learned assessing officer, was partly allowed.

2.

Following grounds of appeal are raised :-

2. Whether on the facts and circumstances of the case and in law the Learned. CIT (A) has erred in admitting the new evidences without asking remand report from Assessing Officer as prescribed in rule 46B of Income tax Rule, 1952?

3. Whether on the facts and circumstances of the case and in law the learned CIT (A) has erred in deleting unexplained purchase amount which was added by the Assessing Officer as the assessee was not complied to any notices and purchase was made from the parties who has indulged in bills-trading without there being no actual trading activity?

4. whether on the facts and in the circumstances of the case and in law, the learned CIT (A) has failed to appreciate that the assessee failed to produce the parties for verification, in spite of opportunity provided by the Assessing Officer.

5. Whether on the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in restricting the addition to 12.5% of the total bogus

6. Whether on the facts and in the circumstances of the case and in law, the learned CIT (A) was erred in deleting the addition made by the Assessing Officer amounting to ₹75,94,374/- without appreciating the ratio of the decision of the Hon'ble Supreme Court in case of N.K. proteins Ltd., wherein the court has held that when the purchases are from bogus suppliers the entire purchase are liable to be disallowed?

7. Whether on the facts and in the circumstances of the case and n law, the learned CIT (A) has erred in deleting the addition made by the Assessing Officer without appreciating the facts that during the assessment proceedings assessee has failed to substantiate the sales corresponding to bogus purchases whereas the learned CIT (A) has relied on the case law’s relevant to the cases wherein the assessee submitted its reply of bogus purchases and the correspondence sale with substantiate proof.

8. This appeal is being filed as it is covered under the exception provided in para 10( e) of the CBDT’s circular no.3 of 2018 dated 11.07.2018 as amended vide F.No.279/Misc.142/2007-ITJ (pt) dated 20.08.2018.”

3.

Brief facts of the case shows that assessee is a partnership firm filed return of income on 6/9/2011 at a total income of ₹ 906,720/–. The return was processed under section 143 (1) of the act , was not picked up for scrutiny.

5.

Learned assessing officer is aggrieved and is in appeal before us.

6.

The learned departmental representative supported the order of the learned assessing officer and submitted that when the assessee has failed to give any information to the assessing officer , there is no fault on the side of the learned assessing officer in making the addition to the extent of hundred percent of the bogus purchases.

7.

The learned authorized representative submitted a paper book containing 81 pages wherein he submitted the

8.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that assessee is a partnership firm engaged in the business as trader in ferrous and nonferrous metals. It filed its return of income disclosing total income of ₹ 906,720/–. The assessee is found to have indulged into bogus purchases from seven different parties amounting to ₹ 7,804,309. The assessee has submitted the copies of the purchase bills, Ledger accounts, bank statements, the Ledger of the various items purchased and as well as the quantitative details, stock register. On appeal, It is also stated by the learned CIT – A that assessee has disclosed gross profit of 9.81%, thus it is apparent corresponding sales is not disputed. The learned CIT – A upheld the addition to the

9.

In the result, appeal filed by the learned AO is dismissed.

Order pronounced in the open court on 22.03.2024.

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