INCOME TAX OFFICEER -27(1) (1), NAVI MUMBAI vs. M/S. DURA OPTO TECHNOLOGIES, MUMBAI

The revenue has filed the appeal against the orders of the Commissioner of Income Tax (Appeals)-50, Mumbai passed u/s 143(3) and 147 of the Act. The revenue has raised the following grounds of appeal:

The brief facts of the case are that the assessee is engaged in the business of trading in industrial and electronic components. The assessee has filed the return of income electronically on 17.09.2009 for the A.Y 2009-10 disclosing a total loss of Rs. 32,36,684/-. The Assessing officer (A.O) has received information from DGIT(Inv), Mumbai were the sales tax department Maharashtra has carried out investigation and found that there are list of parties who provides accommodation entries and the assessee is one of the beneficiary of accommodation entries of bogus purchases. The Assessing officer (A.O) find that the M/s Dura Opto Technologies, Mumbai. - 3 - assessee has transactions with three parties and is of the opinion that the income has escaped the assessment and the notice u/sec 148 of the Act was issued. Subsequently notice u/s 143(2) and 142(1) of the Act are issued. In compliance, the Ld. AR of the assessee has submitted the audited financial statements and details. The A.O. called for additional information to substantiate the genuineness of purchases. Since partial information was filed by the assessee and the A.O. has relied on the information available on record and is of the opinion that the genuineness of transactions could not be accepted and made an addition of Rs.8,44,392/-. Further the A.O. has disallowed 20% of conveyance expanses, motor car expenses and sales promotion expenses in the absence of evidences Rs. 31,677/- and assessed the total loss of Rs. 23,60,615/- and passed the order u/s 143(3) r.w.s 147 of the Act dated 23.03.2015.

Aggrieved by the order, the assessee has filed an appeal before the CIT(A). The CIT(A) in the appellate proceedings considered the grounds of appeal, findings of the A.O in the scrutiny assessment, submissions of the assessee on the disputed issue. Finally the CIT(A)

At the time of hearing, the Ld.DR submitted that the CIT(A) has erred in restricting the addition to 12.5% irrespective of facts that no proper information was filed in the Assessment proceedings.

The Ld. AR relied on the order of the CIT(A) and judicial decisions and prayed for dismissal of revenue appeal.

We heard the rival submissions and perused the material on record. The sole crux of the disputedissue envisaged by the Ld.DR that the CIT(A) has restricted the addition to the extent of 12.5% of the bogus purchases considering profit element embedded. We

We find that the Ld.CIT(A) took a reasonable view that the only profit percentage has to be added and estimated @ 12.5% of bogus purchases. The Ld.DR could not controvert the observations of the Ld. CIT(A) with any new cogent evidence and material but relied only on the A.O order. The CIT(A) in respect of disallowance of expenses has considered the nature of business activities and restricted the addition to meet the ends of justice. We are of the opinion that the CIT(A) dealt on the facts and considered the profit element in the bogus purchases and also the A.O has not disputed the sales. The Ld.CIT(A) has relied on the decisions of Hon’ble High Court & Honble Tribunal and passed a reasoned order. Accordingly, we do not find any infirmity in the order of the CIT(A) and uphold the M/s Dura Opto Technologies, Mumbai. - 6 - same and dismiss the grounds of appeal raised by the revenue.

In the result, the appeal filed by the revenue is dismissed.