M/S PRAJ ENGINEERS,NASHIK vs. INCOME TAX OFFICER, WARD-2(2), NASHIK, NASHIK
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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER
PER R.S. SYAL, VP:
This appeal by the assessee arises out of the order dated
02-05-2023 passed by the CIT(A) in National Faceless Appeal
Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also
called ‘the Act’) in relation to the assessment year 2011-12.
This appeal is time barred by about 44 days. The assessee has
filed an affidavit stating the reasons which led to the late filing of the
appeal. The ld. DR did not seriously object to the delay. Therefore,
the delay is condoned and the instant appeal is admitted for disposal
on merits.
2 ITA No. 903/PUN/2023 M/s. Praj Engineers
There is no appearance from the side of assessee despite notice.
I am, therefore, proceeding to dispose off the appeal ex parte qua the
assessee.
The only issue involved in this appeal is against the
confirmation of addition of Rs.3,51,088/- made by the Assessing
Officer (AO) on account of bogus purchases.
Briefly stated, the facts of the case are that the assessee is
engaged in the business of metal photo and all types of lable
manufacturing. The AO, on verification of information received
from the Maharashtra Sales Tax Department, observed that the
assessee was one of the beneficiaries of Hawala purchases. He
observed that the assessee made unsubstantiated purchases
amounting to Rs.3,51,088/- from M/s. Dinesh Industrial Corporation,
Mumbai, which were in the nature of accommodation entries. The
assessee was called upon to prove the genuineness of the recorded
purchases. The assessee submitted certain details. Notice u/s.133(6)
was also issued to M/s. Dinesh Industrial Corporation, Mumbai
(seller party) who had provided accommodation entries. However, it
was returned by postal authority with remarks “Not known”. The
AO has recorded in his order that the assessee expressed his inability
3 ITA No. 903/PUN/2023 M/s. Praj Engineers
to produce the above said party. This led the AO to make the
addition equal to the amount of Hawala purchases, which got echoed
in the first appeal. Aggrieved thereby, the assessee has approached
the Tribunal.
Having heard the ld. DR and gone through the relevant material
available on record, it is observed that the assessee allegedly
purchased aluminum sheets from M/s. Dinesh Industrial Corporation
and thereafter utilized the same in the manufacture of the finished
goods. In such a situation, the entire amount of purchase bill does
not requires addition, but only the profit element because the
aluminum sheets must have been actually purchased albeit at lower
prices in lieu of which hawala bills were recorded, which were used
in producing the finished goods. The Hon’ble jurisdictional High
Court in Pr.CIT Vs. Paramshakti Distributors Pvt. Ltd., vide its
judgment dated 15.07.2019 in ITA No.413/2017, has sustained the
addition @ 10% of the amount of purchases, being, the profit
element involved therein. Respectfully following the precedent, I
deem it appropriate to restrict the addition to 10% of the amount of
purchases. It is ordered accordingly.
4 ITA No. 903/PUN/2023 M/s. Praj Engineers
In the result, the appeal is partly allowed. 7.
Order pronounced in the Open Court on 28th August, 2023.
Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 28th August, 2023 सतीश आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The Respondent 2. 3. The Pr.CIT concerned 4. DR, ITAT, ‘SMC’ Bench, Pune गाड� फाईल / Guard file. 5.
आदेशानुसार/ BY ORDER,
/ Tue Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
Date 1. Draft dictated on 28-08-2023 Sr.PS 2. Draft placed before author 28-08-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *
