ACIT, CIRCLE-6(2)(1),MUMBAI, MUMBAI vs. M/S. CREO LIFESTYLES P. LTD., MUMBAI

(A.Y: 2010-11) ACIT – 6(2)(1) Vs. M/s Creo Lifestyle Pvt Room No. 504, Ltd, Aayakar Bhavan, 161, 2nd Floor, Starcity MK Road, Manmala Tank Road, Mumbai – 4000 020 Mahim West Mumbai – 400016. �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AABCI8961N Appellant .. Respondent Appellant by : None Respondent by : Shri R.A. Dhyani.Sr. DR Date of Hearing 24.02.2022 Date of Pronouncement 25.02.2022 आदेश / O R D E R

PER PAVAN KUMAR GADALE JM:

(i). On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition of Rs. 1,68,339/- on account of bogus purchases to only 12.5% of the M/s Creo Lifestyle Pvt Ltd., Mumbai. - 2 - such bogus purchase, without giving any findings as to how 12.5% has been worked out and also ignoring that the assessee failed to discharge the onus on it to establish during the assessment proceedings, the genuineness of purchase which were made through bogus parties.

(ii). On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition on account of bogus purchase to only 12.5% of the bogus purchase, without appreciating the ratio of the decision of the Hon'ble Gujarat High Court in the case of N.K. Protiens Ltd, wherein it has been held that in the event of bogus purchases, the addition of whole of such purchases is required to be made and this decision has been confirmed by the Hon'ble Supreme Court in SLP No. CC No. 769 of 2017, by dismissing the SLP of that assesee.

(iii). The information was generated by Maharashtra Sales Tax Department and received through the Investigation Wing of the Income Tax Department. As such, the case squarely falls under the exception 10(e) of Circular No. 312018 dated 1110712018 and amendment thereto dated 2010812018.

(iv). The Appellant prays that the order of the CIT (Appeals) on the above grounds be set aside and that of the AO be restored.

(v). The Appellant craves leave to amend or alter any ground or to submit additional new ground, which may be necessary.

The Brief facts of the case are that the assessee is 2. engaged in the business of buying and selling of readymade garments and accessories. The assessee

M/s Creo Lifestyle Pvt Ltd., Mumbai. - 3 - has filed the return of income on 13.10.2010 for the A.Y 2010-11 declaring total loss of Rs. (-) 56,49,374 and the return of income was processed u/s 143(1) of the Act. Subsequently the Assessing officer (A.O.) has received information that the assessee is the beneficiary in obtaining the accommodation entries/bills from the bogus parties as per the information from Sales Tax Department Maharashtra. The A.O. has observed that the assessee has obtained the purchase bills from M/s. Siddhivinayak Corporation of Rs. 13,46,712/-. Therefore, the A.O has reason to believe that the income has escaped assessment and issued notice u/s 148 of the Act. In compliance, the assessee has filed a letter dated 07.09.2014 to treat the return of income filed earlier for the A.Y 2009-10 as due compliance. Further, the A.O. has issued notice u/s 143(2) and 142(1) of the Act and called for the information. In compliance, the Ld. AR of the assessee appeared from time to time and the case was discussed. The A.O in order to check the transactions of the purchases has called for the information and documents to be produced. Further the A.O to test check the genuineness of the transactions has issued notice u/s 133(6) of the Act on the party parties and the said notice was returned unserved by M/s Creo Lifestyle Pvt Ltd., Mumbai. - 4 - the postal authorities. Finally, the A.O. has dealt on the information and the available evidences and is of the opinion that the assessee has indulge in bogus purchases and made 100% addition of bogus purchases and passed the order u/s 143(3) r.w.s 147 of the Act dated 23.03.2016.

4. At the time of hearing, none appeared on behalf of the assessee and the Ld.DR submitted that the CIT(A) has erred in restricting the addition to 125% irrespective of facts that no proper information was filed in the Assessment proceedings.

M/s Creo Lifestyle Pvt Ltd., Mumbai. - 5 -

Order pronounced in the open court on 25.02.2022.

Sd/- Sd/- (S RIFAUR RAHMAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 25.02.2022 KRK, PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / The CIT(A) 4. आयकर आयु�त(अपील) / Concerned CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Mumbai 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// ( Asst. Registrar)

ITAT, Mumbai