THE DCIT CENTRAL -CIR -5(1) , MUMBAI vs. M/S. ARCH PHARMALABS LTD, MUMBAI

O R D E R

PER PAVAN KUMAR GADALE JM:

1.1 At the time of hearing, the Ld.DR of the revenue submitted that there is a delay of 30 days in filing the appeal before the Hon’ble Tribunal and explained that due to Covid-19 pandemic, the filling was delayed and relied on the decision of Hon’ble Supreme Court in M/s Arch Pharmalabs Ltd., Mumbai. - 2 - respect of extension of period of limitation. Contra, the Ld.AR has no specific objections. We found the facts mentioned are reasonable and accordingly we condone the delay and admit the appeal. The revenue has raised the following grounds of appeal:

Grounds of appeal: i. On the facts and circumstances of the case and in law, the Ld. CIT (A) is not correct in restricting the amount of addition on issue of bogus purchase, without appreciating the fact that the entire purchases of Rs 1,87,47,906/ - are proved as bogus in the assessment order. ii. On the facts and circumstances of the case and in law, the Ld. CIT (A) is not correct in restricting the amount of addition on issue of bogus purchase by relying on the case of CIT us Nikunj Eximp Enterprises Put Id and CIT us. Ashish International of the Hon 'ble Bombay High Court, without appreciating the fact that the facts of the present case are different from the cases on which Ld. CIT(A) was relied, because the assessee is a manufacturer while the above decisions were given in the cases of traders.

III. On the facts and circumstances of the case and in law, the Ld. CIT (A) is not correct, as Ld. CIT(A) has not taken into consideration the order passed by Hon'ble Apex Court in case of N K Protein Put Ltd us. Dy. CIT on issue of addition on ground of bogus purchase.

M/s Arch Pharmalabs Ltd., Mumbai. - 3 -

IV. The appellant craves to leave, to add, to amend and / or to alter any of the ground of appeal

, if need be.

2. The brief facts of the case are that the assessee company is engaged in the business of manufacturing and trading of pharmaceuticals and intermediates and others. The assessee has filed return of income for the A.Y 2012-13 on 29.09.2012 disclosing a total income of Rs.97,83,98,610/-. Subsequently the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued. In compliance of the notice, the Ld. AR of the assessee appeared from time to time and submitted the details and the case was discussed. There was a survey u/sec133A of the Act on 15.02.2013 and the Assessing Officer(A.O) find that the assessee has made bogus purchases from parties aggregating to Rs.1,87,47,906/-.The A.O after recording the statement of the director has issued a show cause notice. In compliance, the assessee has submitted the explanations and details vide letter dated 05.03.2015 referred at page 2 of the assessment order. The A.O after verifying details and to test check the genuineness of the transactions has issued notice

M/s Arch Pharmalabs Ltd., Mumbai. - 4 - u/s 133(6) of the Act on the parties, whereas only one notice was served and the details were filed. In respect of other notices sent, no reply was filed and in one case the notice returned un served. The A.O has called for additional details and was complied by the assessee. Finally the A.O. was not satisfied with the explanations and genuineness of the transactions and made addition of Rs. 1,87,47,906/- and assessed the total income of Rs.99,71,46,510/- and passed the order u/s 143(3) of the Act dated 30.03.2015.

4. At the time of hearing, the Ld.DR submitted that the CIT(A) has erred in restricting the addition @ 4%

M/s Arch Pharmalabs Ltd., Mumbai. - 5 - irrespective of facts that no proper information was filed in the Assessment proceedings. Contra, the Ld.AR supported the order of the CIT(A) and substantiated the submissions relying on the judicial decisions and factual paper book.