ASST. CIT CIRCLE-9 (3)(1), MUMBAI vs. M/S DEVU TOOLS PVT LTD., MUMBAI

Aforesaid appeal by Revenue for AY 2010-11 contest the order of Ld. Commissioner of Income Tax (Appeals)-16 Mumbai [CIT(A)] dated 30/07/2019 which has granted partial relief to the assessee on account of alleged bogus purchases.

At the time of hearing, none appeared for assessee. However, the material on record was sufficient for disposal of the appeal. The Ld. DR pleaded for restoration of assessment as framed by Ld. AO u/s 143(3) r.w.s. 147 on 30/03/2016. The assessee being resident corporate assessee is stated to be engaged as manufacturer and exporter of molds & dyes. 3. The original return of income filed by the assessee was scrutinized u/s 143(3) on 31/12/2012. However, the case was reopened pursuant to receipt of certain information from Sales Tax Department, Maharashtra, wherein it transpired that the assessee made suspicious purchases of Rs.638.05 Lacs from 9 entities as detailed in the assessment order. Accordingly, notice u/s 148 was issued on 20/03/2015. During assessment proceedings, the assessee was directed to substantiate these purchases. 4. The assessee could not produce any of the parties nor could it file any confirmation letters from the suppliers. The assessee was unable to produce various documents like purchase orders, transport receipts, inspection report, copies of invoice, delivery challan, ledger account, payment details and reconciliation of the same with the bank statements. Notices issued u/s 133(6) to all the suppliers did not elicit any satisfactory response. Therefore, aforesaid purchases were disallowed and added back to the income of the assessee. 5. The Ld. CIT(A), after considering assessee’s submissions and relying upon Tribunal’s order in assessee’s own case for AY 2008-09, estimated the additions @10%. It was noted that Ld. AO had not doubted the consumption / sales and therefore, the motive behind obtaining bogus purchase bills was to suppress true profits. Aggrieved, the revenue is in further appeal before us. 6. After going impugned order, we find that Ld. CIT(A) has clinched the issue in the right perspective. The sales / consumption of material