INCOME-TAX OFFICER, WARD - 14 (2),, PUNE vs. YUSUF ISMAIL SHAIKH,, PUNE

The only issue involved in both the appeals is against restricting the addition made by the AO on account of bogus purchases.

Briefly the facts for the assessment year 2009-10 are that the Assessing Officer, on verification of information received from the Maharashtra Sales Tax Department, observed that the assessee was one of the beneficiaries of Hawala purchase bills. Such amount of bills stood at Rs.12,81,137/-. He made the addition equal to the amount of Hawala purchase bills, which got restricted to 15% in the first appeal. 4. The facts of the appeal for the assessment year 2011-12 are similar. For this year, the assessee was found to have procured Hawala purchase bills for a sum of Rs.3,49,783/-. The Assessing Officer made addition for the equal sum, which got restricted to 15% in the first appeal. 5. The Revenue is aggrieved by the deletion of the part addition for both the years. 6. Having heard both sides and gone through the relevant material available on record, it is observed that the assessee allegedly purchased raw material through the Hawala purchase bills and thereafter consumed the same in the manufacture of finished goods. In such a situation, it cannot be said that the entire amount of purchase bills requires addition. The Hon’ble jurisdictional High Court in Pr.CIT Vs. Paramshakti Distributors Pvt. Ltd., vide its judgment dated 15.07.2019 in has sustained the addition @ 10% of the amount of purchases, being, the profit element involved therein. Since the ld. CIT(A) in these appeals has restricted the addition to 15%, which is higher than that approved in the above precedent, in my considered opinion, there can be no grievance at the end of the Revenue. 7. In the result, the appeals are dismissed. Order pronounced on 17th day of January, 2020.

Date 1 Draft dictated on 17.01.2020 Sr. PS/PS 2 Draft placed before author 17.01.2020 Sr. PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr. Sr. PS/PS PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order **