VINAY BANSAL,GHAZIABAD vs. CIT(A), DELHI

Heard both the parties at length and perused the relevant records.

It is noted that AO treated the purchases made by the assessee of Rs. 35,68,523/- as bogus and added the same to the income of the assessee and in appeal Ld. CIT(A) confirmed the action of the AO. Against the above, assessee appealed before the Tribunal.

At the time of hearing, Ld. AR has submitted that assessee was engaged in trading of plastic waste and pet scrap during the year under consideration. It was submitted that the assessee earned income of Rs. 723646/- during the year. He further submitted that Ld. CIT(A) is not justified in treating purchase from Raj Trading Company as bogus purchase of Rs. 35,68,523/- and affirmed the action of the AO in treating the said purchases as bogus. He submitted that there are various Hon’ble High Court decisions wherein, it has been held that no adhoc addition of bogus purchases should be made, but however, he has requested to restrict the addition to some reasonable percentage. Ld. DR relied upon the orders of the authorities below.

I have heard both the parties and perused thee records. I have given my thoughtful consideration to the assessee’s arguments and Revenue’s contention in support of the impugned addition. I find no reason to accept either parties stand in entirety. This is for the precise reason that neither the assessee has been able to properly explain the purchase nor the department could simply brush aside all the relevant evidence at one go. Be that as it may, the tribunal is of the considered view that in these peculiar facts, it is deemed appropriate in the larger interest of justice to restrict the disallowance to 15% of purchases as against the entire purchases disallowed as bogus purchases by the Assessing Officer. Necessary computation shall follow as per law.