ACIT, CIRCLE-14(1)(2), MUMBAI vs. M/S D RAVILAL RESOURCE MANAGEMENT PVT LTD, MUMBAI

आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the Revenue against the order dated 30/09/2022 passed by NFAC, Delhi for the quantum of assessment passed u/s. 143(3) r.w.s. 147 for the A.Y.2010-11.

2 M/s. D. Ravilal Resource Management Pvt. Ltd 2. In the grounds of appeal

3. The facts in brief are that assessee has filed the return of income on 13/10/2010 declaring total income of Rs.96,80,322/-. Later on assessee’s case was selected for scrutiny and assessment order was passed u/s.143(3) on 10/01/2013 determining total income at Rs.1,02,19,420/-. Later on assessee’s case was reopened u/s.147 by issuance of notice u/s.148 dated 18/03/2015, which was based on some information from Sales Tax authorities that some of the parties were found to be engaged in providing bills as per the requirement of the customer and no goods were transacted in these transactions. Since, assessee was also found to have carried out purchases for sum aggregating to Rs.65,88,578/- from six of those parties, therefore, assessee’s case was reopened u/s 147 and accordingly, addition has also been made by the ld. AO by disclosing that the entire purchases are made from six parties.

4. Ld. CIT(A) after considering the various submissions and following various decisions of the Tribunal, held that only gross profit should be added and he held that 12.5% of GP on the

5. After considering the findings given in the impugned orders as well as the submissions incorporated in the appellate order, we find that assessee is engaged in the business of civil contractor and the infrastructure development. During the course of assessment proceedings, assessee has filed ledger confirmations, copy of invoices and the bills raised and the copy of bank statements highlighting the said purchase transaction from all the parties including six parties. Thus, the source of purchases has been shown from the books and the payments have been made by account payee cheques. At the most it could be a case where assessee might have paid the cheque for purchase and thereafter purchased goods from grey market only to suppress gross profit. Once, the corresponding sales have not been doubted or the contract receipts, then the entire purchases cannot be disallowed. Accordingly, addition on account of GP rate of 12.5% on said purchases as done by the ld. CIT (A) following the decisions of the Tribunal and the Hon’ble High Court is confirmed and the appeal of the Revenue is dismissed.