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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI KULDIP SINGH, JM
O R D E R PER BENCH: 01. These are the three appeals filed by the Income Tax Officer, Ward 22(3)(1), Mumbai (the learned Assessing Officer) in case of Vikas Manohar Bafna for A.Ys. 2009-10, 2010-11 and 2011-12 on the same issue. Despite notice assessee did not turn up and therefore, the appeals are decided on the merits of the case as per information available on record.
For A.Y. 2009-10 in the learned Assessing Officer has raised following three grounds of appeal:-
“1 Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in
2. Whether, on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in restricting the disallowance to 6.5% of accommodation entries of bogus purchase bills as against addition of 100% on total bogus purchase by A.O. by taking stand that when the total sales is accepted by the AO then entire purchase cannot be added without appreciating the fact that the assessee did not even produce the stock register and, therefore, purchases in quantitative terms were never tallied with sales and, therefore, it was possible for the assessee to inflate the purchases by the complete amount in bogus purchase bills.
3 And without prejudice to the ground No. (i) & (ii), whether, on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in not going
The identical grounds were also raised for A.Y. 2010-11 and 2011-12.
We first take up the appeal of the learned Assessing Officer for A.Y. 2009-10.
Brief facts of the case shows that assessee is an individual engaged in the business of trading in imitation jewellery. He filed his return of income on 18th September, 2009 at ₹ 9,98,340/-. Subsequently, information was received by Commissioner of Income-tax (Appeals)-21, Mumbai (the learned CIT (A)) from sales tax department that the assessee has obtained accommodation entries. Accordingly, the reasons were recorded and notice under Section 148 of the Act was issued on 18th March, 2013. According to the information assessee has obtained accommodation entry from three different entities whose
The learned Assessing Officer aggrieved with the order of the learned CIT (A) with respect to restricting the addition on account of bogus purchases at 6.5% of accommodation entries. All the three grounds are related to that.
The learned Departmental Representative vehemently submitted that the assessee has failed to show the purchases and its genuineness and therefore, only 100% of the accommodation entries are required to be added. She further submitted that the learned CIT (A) restricted the addition to the profit embedded therein by not considering the decisions of Hon'ble Supreme Court. Therefore, according to her, the order of the learned CIT (A) is not sustainable.
We have carefully considered the contentions of the learned Departmental Representative and the orders of the lower authorities.
The fact shows that assessee is an individual, obtained the purchase bills from three different parties amounting to ₹27,25,493/-. These parties have admitted that they have not supplied the goods, therefore, the only issue is that in this circumstances whether 100% of the purchases should be added as income of the assessee or merely the profit embedded therein is the income. The learned CIT (A)
The learned Departmental Representative did not question the profit rate of 6.5%. We also find that the learned CIT (A) has taxed the element of profit therein. There cannot be any standard or fixed benchmark of such estimate disturbing sales, we disagree with that because some profit has already been offered by assessee by showing sales. Further, 6.5% of profit in Imitation Jewellery business also cannot be said either too low or unreasonable. In view of this, the order of the learned CIT (A) is upheld. Accordingly, Ground nos. 1 to 3, are dismissed. 014. In the result, appeal of the learned Assessing Officer is dismissed. 015. For A.Y. 2010-11, on identical facts the learned Assessing Officer made an addition of bogus purchase of ₹92,67,852/-. He also made an addition of commission expenditure for obtaining such accommodation entries. The learned CIT (A) restricted the addition to the extent of 6.5% of the accommodation entries. On similar grounds, the learned Assessing Officer challenged the order of learned CIT (A).
In view our decision in appeal of the learned Assessing Officer for A.Y. 2009-10, for the same reason, we dismiss the appeal of the learned Assessing Officer for A.Ys. 2010- 11 and 2011-12.
In the result, all these three appeals filed by the learned Assessing Officer are dismissed.
Order pronounced in the open court on 27.07.2022.