SANDHYA RAM JOGDAND,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX,, PUNE

The assessee has raised the following grounds of appeal:- 1. The learned CIT(A)-2, Pune erred in law and on facts in sustaining the addition made on account of alleged bogus purchases of Rs.56,42,510/- made by learned DCIT, Circle-3, Pune (hereinafter referred to as the learned AO). 2. Without prejudice to the Ground No.1, the learned CIT(A)-2 and ld. AO erred in law and on facts in not sustaining the addition to the extent of average gross profits regarding the alleged bogus / hawala purchases.

Despite service of notice, none appeared on behalf of assessee nor any application for adjournment was moved. However, we find that the issue raised in the present appeal is against alleged bogus purchases which were detected by the Maharashtra Sales Tax Department on the ground that VAT had not deposited against aforesaid purchases.

The said issue has been decided by Pune Bench of Tribunal in series of cases including M/s. Chhabi Electricals Pvt. Ltd. and others Vs. DCIT in ITA No.795/PUN/2014, relating to assessment year 2010-11, order dated 28.04.2017. Hence, we proceed to decide the present appeal after hearing the learned Departmental Representative for the Revenue.

The issue which arises in the present appeal is against addition made on account of alleged bogus purchases. The Tribunal in series of decisions have decided the issue with lead order in M/s. Chhabi Electricals Pvt. Ltd. and others Vs. DCIT (supra). The Tribunal in the said decision had held that the addition is to be restricted to 10% of Gross Profit over and above the Gross Profit declared by the assessee in its books of account, on the alleged bogus purchases. Accordingly, the Assessing Officer is directed to restrict the addition to 10% of

In the result, the appeal of assessee is partly allowed.