Income Tax Appellate Tribunal - Mumbai
Ito 32(1)(5), Mumbai vs Hitesh R. Shah, Mumbai on 26 May, 2017
ु ई यायपीठ,'आई',मंब आयकर अपील य अ धकरण, मंब ु ई।
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, 'I' MUMBAI ी जो ग दर संह, या यक सद य एवं ी मनोज कुमार अ वाल, लेखा सद य, के सम Before Shri Joginder Singh, Judicial Member, and Shri Manoj Kumar Aggarwal, Accountant Member ITA Nos.2322 & 3148/Mum/2015 Assessment Years: 2005-06 & 2006-07 Income Tax Officer-32(1)(5), Shri Hitesh R. Shah, Room No.203, C-11, बनाम/ 1804, Mayur Tower, Pratyaksh Kar Bhavan, Bandra Chandavarker Road, Kurla Complex, Bandra (E), Vs. Borivali West, Mumbai-400051 Mumbai-400092 (राज व /Revenue) ( नधा$%रती /Assessee) PAN. No. AMCPS3162M राज व क ओर से / Revenue by Shri Saurabh Kumar Rai नधा$%रती क ओर से / Assessee by Shri Virag H. Shah & Vidhya Chandra ु वाई क' तार(ख / Date of Hearing:
सन 18/05/2017
आदे श क' तार(ख /Date of Order: 26/05/2017
2 ITA No.2322 & 3148/Mum/2015
Hitesh R. Shah
आदे श / O R D E R
Per Joginder Singh(Judicial Member) These two appeals are by the Revenue against the impugned orders dated 04/02/2015 and 20/02/2015 of the Ld. First Appellate Authority, Mumbai. The common ground raised pertains to restricting the profit margin to Rs.7,57,135/- i.e. at the rate of 0.1% (Assessment Year 2005-
06), instead of Rs.75,71,357/- and Rs.5,34,852/- instead of Rs.53,48,521/- i.e. at the rate of 1% calculated by the Assessing Officer, without appreciating the facts that the assessee himself accepted that he indulged in providing accommodation entries and charging commission and further overlooking the statement tendered by the parties as is explicit from the investigation carried out by the Sales Tax Department.
2. During hearing, the Ld. DR, Shri Surabh Kumar Rai, defended the assessment order by contending that the Assessing Officer made enquiries, recorded the statement, wherein, it was categorically accepted that he was entry provider. The commission at the rate of 1%, therefore, was rightly added by the Assessing Officer, since, these are cases of bogus purchases, the assessment order may be restored.
2.1. On the other hand, Shri Virag H. Shah along with Vidhya Chandra, ld. counsel for the assessee, defended the impugned order by contending that the Ld. Commissioner of 3 ITA No.2322 & 3148/Mum/2015 Hitesh R. Shah Income Tax (Appeal) has passed a judicious order by placing reliance upon the decision in Gaurav Kumar Sharma vs ACIT (2014) 49 taxman.com 189 (Jaipur Trib.).
2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that for Assessment Year 2005-06, the assessee declared income of Rs.5,66,524/-. The Assessing Officer received information from Income Tax Officer-24(1)(3), Mumbai, regarding bogus entries of purchase and sales by the assessee (proprietor M/s Jainam Trading Company), therefore, the Ld. Assessing Officer recorded the reasons as mentioned in the assessment order. The case of the assessee was reopened u/s 148 of the Income Tax Act, 1961 (hereinafter the Act) and thereafter notices u/s 143(2) and 142(1) of the Act along with questionnaire were issued on 10/10/2012. The assessee attended the proceedings and filed objections as has been mentioned in the assessment order. Summons u/s 131 of the Act were issued upon the assessee and the statement under oath was recorded on 18/12/2009, which has been reproduced in the assessment order. In reply to question no.2, with respect to nature of business of M/s Jainam Trading Co., it was replied that it is dealing in trading iron and steel. In reply question no. 3, it was tendered as under:-
"M/s Jainam Trading Company is indulged in the business of trading in iron and steel. However, due to deep financial crunch, I have indulged in the business 4 ITA No.2322 & 3148/Mum/2015 Hitesh R. Shah of billing to certain portions. However, I am not able to ascertain the portion of billing at this juncture. I will provide the same on 21/12/2009."
2.3. In reply to question no.5, it was explained by the assessee Saving Bank Account no.79553 was not part of regular books of accounts and some portion of the transaction in these bank accounts are made for accommodation purposes. In para-8 of the assessment order, there is a mention of letter dated 24/12/2009, the assessee has stated that the earlier statement was factually incorrect and denied accommodation bills or any business. The Bench during hearing, raised questions with respect to the business of the assessee, it was fairly agreed that the assessee is partially indulged in providing accommodation entries but the books of accounts claimed to be lost. The Bench asked the assessee as to how much could be the profit margin. The ld. Counsel fairly agreed to increase the profit margin at the rate of 0.25% as against 0.1% restricted by the Ld. Commissioner of Income Tax (Appeal) and 1% added by the Assessing Officer. Considering the totality of facts admission during recording the statement, thereafter, retracting the same and the material facts available on record, we are of the view that it will meet the end of justice to increase the profit margin at the rate of 0.25% (as agreed by the ld. counsel from both sides) as against 0.1% adopted by the Ld. Commissioner of Income Tax (Appeal). Thus, both the appeals of the Revenue are partly allowed. This order was 5 ITA No.2322 & 3148/Mum/2015 Hitesh R. Shah orally pronounced in the open court at the conclusion of hearing.
Finally, both the appeals of the Revenue are partly allowed.
Order was pronounced in the open court on 26/05/2017.
Sd/- Sd/-
(Manoj Kumar Aggarwal) (Joginder Singh)
लेखा सद#य / ACCOUNTANT MEMBER या$यक सद#य /JUDICIAL MEMBER
मब
ुं ई Mumbai; *दनांक Dated : 26/05/2017 f{x~{tÜ? P.S/. न.स.
आदे श क %$त'ल(प अ)े(षत/Copy of the Order forwarded to :
1. अपीलाथ. / The Appellant (Respective assessee)
2. /0यथ. / The Respondent.
3. आयकर आय1 ु त(अपील) / The CIT, Mumbai.
4. आयकर आय1 ु त / CIT(A)- , Mumbai,
5. 3वभागीय / त न ध, आयकर अपील(य अ धकरण, मब ुं ई / DR, ITAT, Mumbai
6. गाड$ फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, स0या3पत / त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मब ुं ई / ITAT, Mumbai