ACIT 21(3), MUMBAI SHRI ZAVERCHAND DAMJI HARIA, MUMBAI

This Income Tax Appellate Tribunal (ITAT) ruling addresses an appeal by the revenue department concerning alleged bogus purchases made by Shri Zaverchand Damji Haria for the assessment year 2011-12. The Assessing Officer (AO) had initially estimated an addition of 25% on purchases from suspicious dealers. However, following a previous tribunal decision in the assessee's own case, the Commissioner of Income-Tax (Appeals) had restricted this addition to 12.5%. The ITAT upheld this decision, dismissing the revenue's appeal as the estimation aligned with prior rulings.

IN THE INCOME TAX APPELLATE TRIBUNAL
“G” BENCH, MUMBAI

BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
AND HON’BLE SHRI RAVISH SOOD, JM
(Hearing Through Video Conferencing Mode)

I.T.A. No.3902/Mum/2019
Assessment Year: 2011-12)

ACIT- 21(3)
Room No.209, 2nd Floor
Piramal chambers, Parel
Mumbai-400 012
PAN/GIR No. AALPH-7225-H
Appellant)

Vs.

Shri Zaverchand Damji Haria
124, Ashish Industrial Estate
Gokhale Road, Mumbai-400 025
 Respondent)

Assessee by : Shri Chhangur Shrikant Chauhan-Ld. AR
Revenue by : Shri T.S. Khalsa- Ld. Sr.AR

Date of Hearing : 11/02/2021
Date of Pronouncement : 11/02/2021
 O R D E R

Manoj Kumar Aggarwal (Accountant Member)

1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2011-12 contest the order of Ld. Commissioner of Income-Tax (Appeals)-33 Mumbai [in short referred to as‘CIT(A)’], Appeal No.CIT(A)-33/Rg.21/696/2016-17 dated 13/03/2019 which has restricted the addition on account of alleged bogus purchases to the extent of 12.5% by relying upon certain order of the Tribunal in assessee’s own case for same year. 

2. We have carefully heard the rival submissions and perused therelevant material on record. The Ld. DR pleaded for confirmation ofaddition as made by Ld. AO whereas Ld. AR relied upon the estimation made in the impugned order. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

3.1 The material facts are that the assessee being resident individual engaged in manufacturing of garments underproprietorship concern namely M/s Zeal Apparel was assessed forthe year under consideration u/s 143(3) r.w.s. 147 vide order dated 15/12/2016. This was second reopening in case of assessee, since the assessment was already framed u/s 143(3) r.w.s. 147 on 31/03/2015.

3.2 The second reopening stem from the fact that pursuant toreceipt of certain information from Sales tax Department regardingprocurement of bogus bills by assessee from suspicious dealers, itwas alleged that the assessee made bogus purchases aggregatingto Rs. 45.02 Lacs from two entities, the details of which has already been extracted in para 3.1 of the assessment order. Though, theassessee stated that the purchases were genuine and payment to the suppliers was through banking channels, however, observing that the assessee could not conclusively co-relate the purchaseswith utilization of the material, Ld. AO estimated addition of 25% against these purchases.

3.3 It could be observed that similar additions were made in the first round of re-opened assessment framed u/s 143(3) r.w.s. 147 on 31/03/2015, wherein the assessee was saddled with similar disallowances of purchases. However, Ld. CIT(A) restricted theaddition to 25%. Upon further appeal, the co-ordinate bench, videITA No.300/Mum/2017 order dated 19/09/2018, relying upon the decision of Hon’ble Gujarat High Court in the case of CIT Vs SimitP.Sheth (356 ITR 451) restricted the addition to the extent of 12.5% of the purchases under consideration.

4. Following the said decision of Tribunal in ITANo.300/Mum/2017, Ld. CIT(A) directed Ld. AO to estimate theadditions @12.5%. Though the assessee has accepted the verdictof Ld. CIT(A), however, the revenue is in further appeal before us by way of present appeal.

5. Upon perusal of impugned order, it is quite evident that the estimations as made by Ld.CIT(A) is in line with the estimation made by the Tribunal in first round in assessee’s own case. Facts being quite similar, we do not find any reason to deviate from the same. Therefore, we dismiss the revenue’s appeal.

6. The appeal stand dismissed in terms of our above order.

Order pronounced on 11th February, 2021.

 Sd/-                                             Sd/-
 (Ravish Sood)                           (Manoj Kumar Aggarwal)
 Judicial Member                       Accountant Member

Mumbai Dated : 11/02/2021
Sr.PS, Kasarla Thirumalesh

Copy of the Order forwarded to :
1.The Appellant
2.The Respondent
3.The CIT(A)
4. CIT– concerned
5. DR, ITAT, Mumbai
6.Guard File 

 BY ORDER,
(Dy./Asstt.Registrar)
ITAT, Mumbai.