CHANDAN STORES,PUNE vs. INCOME-TAX OFFICER, WARD - 9(1), PUNE

आदेश / ORDER PER ANIL CHATURVEDI, AM :

This appeal filed by the assessee is emanating out of the order 1. of Commissioner of Income Tax (A) – 8, Pune dt.18.06.2018 for the assessment year 2012-13.

2.1 Assessee is a partnership firm stated to be dealing in hardware and Paints. Assessee electronically filed its return of income for A.Y. 2012-13 on 25.09.2012 declaring total income of Rs.8,29,200/-. ADIT (Inv.), Kolhapur had forwarded the information regarding accommodation entries provided by Sangli based hawala dealers to

ITA No.1401/PUN/2018

various business entities. From the details, it was seen that

assessee’s name was appearing as one of the beneficiaries of such

accommodation entries. Accordingly, the case was taken up for

scrutiny and assessment was framed u/s 143(3) r.w.s. 147 of the Act

vide order dt.29.12.2016 and thereafter total income was determined

at Rs.18,69,620/-. Aggrieved by the order of AO, assessee carried the

matter before Ld.CIT(A), who vide order dt.18.06.2018 (in appeal

No.PN/CIT(A)-8/ITO, Wd.9(1)/805/2017-18) dismissed the appeal of

the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now

before the Tribunal and has raised the following effective ground :

“The learned CIT-A-8 erred on facts and in law in making addition of Rs.10,40,491/- as Disallowance as per provision of section 69C of Income Tax Act.”

ADIT (Inv.,), Kolhapur had examined the bank account of the Sangli

based hawala operators Shri Suresh Parekh and Shri Sushant Ladda.

It was noted by him that the hawala operator group had utilized

various concerns standing in their name for providing accommodation

entries. Statement u/s 131 of the Act of the alleged Hawala Operators

was recorded on 18.03.2014 wherein they admitted all the

accommodation entries provided by them and also admitted earning

commission @ 1% on such accommodation entries. On the basis of

the information provided by the hawala operators, it was noticed that

assessee had made purchases aggregating to Rs.10,40,491/- from the

alleged hawala operators. AO noted that since assessee could not

produce any information about the delivery of the goods to the

customers, the purchases aggregating to Rs.10,40,491/- was held to

ITA No.1401/PUN/2018

be non-genuine and accordingly it was treated as bogus purchases

and addition was u/s 69C of the Act. Ld.CIT(A) upheld the order of

AO. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal.

material directly to the Government Departments. She pointed to the

details placed in the Paper Book. She further submitted that no

opportunity of cross-examination of the alleged hawala dealers was

given to the assessee and in such a situation no addition is called for.

In the alternative, she submitted that Pune Tribunal in the case of

M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT and others (in ITA No.

795/PUN/2014 for A.Y. 2010-11 dated 28.04.2017) has upheld the

addition to the extent of 10% of the purchases. She further submitted

that 10% of the hawala purchases if made would be acceptable to the

assessee. Ld.D.R. on the other hand supported the order of lower

authorities.

record. The issue in the present case is with respect to making

addition of Rs.10,40,491/- to the total income on account of bogus

purchases. I find that AO in the order has noted that assessee had

failed to prove the entire purchases amounting to Rs.10,40,491/-

made from Mahalaxmi Electricals and Samarth Enterprises and

accordingly the addition was made by AO. The addition was upheld

by Ld.CIT(A). I find that various scenarios of bogus purchase issue

was adjudicated in series of decisions by the Pune Benches of

Tribunal with lead order in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT

and others (in ITA No. 795/PUN/2014 for A.Y. 2010-11 dated

ITA No.1401/PUN/2018

28.04.2017). In the case similar to assessee, the Co-ordinate Bench

of the Tribunal in the case of M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT (supra) had upheld the addition of 10% of the bogus purchases.

In view of the aforesaid facts and following the decision of the Co-

ordinate Bench of the Tribunal in the case of Chhabi Electricals

(supra) and in view of the alternate submission of Ld.A.R., I uphold

the addition to the extent of 10% of such purchases made by AO. I therefore direct accordingly. Thus, the ground of the assessee is

partly allowed.

Order pronounced on the 25th day of March, 2019.

Sd/-/- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 25th March, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.