ITO-42(1)(2), MUMBAI vs. GAUTAM MOHANLAL PARMAR, MUMBAI

This appeal is filed by the revenue against order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 07.12.2022 for the A.Y.2011-12 in restricting the disallowance to 12.5% of purchases of (A.Y: 2011-12) Shri Gautam Mohanlal Parmar ₹.9,24,144/- as against the entire purchases disallowed as non- genuine/bogus by the Assessing Officer.

Brief facts of the case are, the assessee is a proprietor of M/s. Metro Aluminium & Doors and has been trading in Alluminium frames and doors, filed return of income for the A.Y.2011-12 on 30.09.2011 declaring income of ₹.5,49,147/- and the return was processed u/s. 143(1) of the Act. Subsequently, Assessing Officer received information from the DGIT(Inv.)., Mumbai about the accommodation entries provided by various dealers and assessee was also one of the beneficiary from those dealers. The assessment was reopened u/s. 147 of the Act based on the information received from DGIT(Inv.)., Mumbai, that the assessee has availed accommodation entries from M/s. Power Tech Trading Co., who is said to be providing accommodation entries without there being transportation of any goods. In the reassessment proceedings, the assessee was asked to prove the genuineness of the purchases made from M/s. Power Tech Trading Co., amounting to ₹.9,24,144/-. Since, assessee could not submitted relevant documents and produced the parties before Assessing Officer. Accordingly, Assessing Officer treated the purchases as non-genuine and he was of the opinion that assessee had obtained only accommodation entries without there being any transportation of (A.Y: 2011-12) Shri Gautam Mohanlal Parmar materials and the assessee inflated the purchases. Assessing Officer observed that the notices issued u/s. 133(6) of the Act to the party are returned unserved and the assessee has not produced the party before the Assessing Officer. It is the finding of the Assessing Officer that the assessee failed to produce the parties in support of its claim that purchases are genuinely made from the party. Therefore, Assessing Officer treated purchases of ₹.9,24,144/- as non-genuine and added to the income of the assessee.

Aggrieved assessee preferred an appeal before the Ld.CIT(A) and filed detailed submissions, Ld.CIT(A) considering the evidences and various submissions of the assessee restricted the disallowance to the extent 12.5% of the non-genuine purchases.

Aggrieved revenue is in appeal before us raising following grounds in its appeal: - “1) "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition to 12.5% of bogus purchases from M/s Power Tech Trading Co. as profit embedded therein without appreciating that the assessee had obtained bogus bills from M/s Power Tech Trading Co. (TIN 27900637131V) who was held to be a mere accommodation entry provider by the Sales Tax Department after conducting enquiries and recording statements of its main persons?"

Inspite of issue of notice none appeared on behalf of the assessee nor any adjournment was sought. Therefore, I proceed to dispose of this appeal with the assistance of Ld.DR.

Ld. DR brought to our notice relevant facts of the case and he vehemently supported the orders of the Assessing Officer. Ld. DR prayed that the order of the Ld.CIT(A) be set-aside.

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