BHIKHABHAI SOMABHAI PATEL,MUMBAI vs. ITO 19(1) (2), MUMBAI

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ITA 2006/MUM/2021Status: DisposedITAT Mumbai30 August 2022AY 2009-105 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A) which had restricted the addition to 1% of the alleged bogus purchases, finding it to be a reasoned order. The assessee failed to provide any material to challenge the appellate authority's decision.

What were the facts?

The assessee, a diamond trader, was found to have obtained bogus purchase bills. The Assessing Officer (AO) made an addition of 3% of these alleged bogus purchases. The CIT(A) reduced this addition to 1%.

What were the issues?

Whether the addition for bogus purchases made by the AO and confirmed by the CIT(A) at a reduced rate was justified. The assessee's failure to substantiate their challenge to the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Respondent: Shri RP Veena.DR
Hearing: 25.08.2022Pronounced: 29.08.2022

PAN/GIR No. : ABBPP1621Q Appellant .. Respondent Appellant by : None Respondent by : Shri RP Veena.DR Date of Hearing 25.08.2022 Date of Pronouncement 29.08.2022 आदेश / O R D E R

PER PAVAN KUMAR GADALE JM:

1.

The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-52, Mumbai passed u/s 143(3) r.w.s 147 and 250 of the Act. The assessee has raised the following grounds of appeal:

1. The Hon'ble CIT(A)-52, Mumbai was not justified in confirming addition of Rs.7,44,771/- being 3% of alleged

Bhikhabhai Somabhai Patel., Mumbai. - 2 - bogus purchases of Rs.2,48,25,686/- even though as per our observations in para 11 of the Order, she intended to add only 1% of the impugned purchases.

2. The Hon'ble CIT(A)-52, Mumbai was not justified in confirming addition of Rs.7,44,771/- being 3% of alleged bogus purchases of Rs.2,48,25,686/- purely based on suspicion, surmises and conjectures in spite of the fact documents in support of the genuineness of the purchases have been filed.

3. The Hon'ble CIT(A)-52, Mumbai was not justified in confirming addition of Rs.7,44,771/- being 3% of alleged bogus purchases of Rs.2,48,25,686/- without furnishing a copy of the statement of Shri Bhanwarlal Jain and his associates on which the Ld. AO has riled for making the impugned addition.

4.

The appellant reserves the right to add, alter, amend or withdraw any grounds of appeal.

2.

The brief facts of the case are that the assessee is engaged in the business of trading in diamonds and filed the return of income for the A.Y 2009-10 on 26.09.2009 declaring a total income of Rs. 5,18,298/-.

Bhikhabhai Somabhai Patel., Mumbai. - 3 - Subsequently, the return of income was processed u/s 143(1) of the Act and the assessment was completed u/s 143(3) of the act determing the total income of Rs. 5,18,298/- on 05.12.2011.Subsequently, the Assessing Officer (A.O.) has received the information from the DDIT(Inv), Mumbai that the assessee has obtained the bogus purchases bills from party/ entry provider and the A.O. has reason to believe that the income has escaped assessment. The A.O. after recording the reasons for reopening has issued notice u/s 148 of the Act.

3.

In compliance, the Ld.AR of the assessee appeared from time to time and furnished the information and the case was discussed. The AO has dealt exhaustively on the details, facts and modus operandi of entry providers in obtaining bogus purchase bills and estimated GP/margin@3% of Rs. 2,48,25,688/- which works out to Rs.7,44,771/- and assessed the total income of Rs. 12,63,070/- and passed the order u/s 143(3) r.w.s 147 of the Act dated 24.12.2016.

4. Aggrieved by the order, the assessee has filed an appeal with the CIT(A), whereas the CIT(A) has Bhikhabhai Somabhai Patel., Mumbai. - 4 - considered the grounds of appeal, findings of the AO, submissions of the assessee, judicial decisions, GP rate and has directed the AO to restrict the addition @ 1% as against @ 3% and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Honble Tribunal.

5. At the time of hearing, none appeared on behalf of the assessee and similarly on the earlier dates of hearing also. The Ld.DR made the submissions on facts and supported the order of the CIT(A).

6. We heard the Ld.DR and perused the material on record. The sole crux of disputed issue that the assessee has challenged the action of the CIT(A).We find that the CIT(A) has considered the factual aspects , judicial decisions and directed the assessing officer to restrict the addition@1% of the total transaction and partly allowed the appeal. Further the assessee has not filed any material information to substantiate/ challenge the action of the appellate authority. We find the CIT(A) considering the circumstances of the case

Bhikhabhai Somabhai Patel., Mumbai. - 5 - has passed a reasoned order and accordingly we uphold the same and dismiss the grounds of appeal.

7.

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

Order pronounced in the open court on 29.08.2022.

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