INCOME TAX OFFICER-26(1)(3), MUMBAI vs. DATTATRAY NANDKISHOR JAGTAP, MUMBAI

It is observed, the Registry has notified delay of various dates in filing these appeals. However, the Assessing Officer (AO) has filed letter dated 26.06.2021 stating that the orders of learned Commissioner (Appeals) were received by the authority concerned on 08.08.2019 and appeals were filed on 30.09.2019. Thus, it is submitted, there is no delay in filing the appeals. Having perused the facts on record, we find that instead of mentioning the date of receipt of orders passed by learned Commissioner (Appeals), the 2 MUM/2019 Assessment Years: 2009-10, 2010-11 & 2011-12 appellant has wrongly mentioned the date of communication of the assessment order in column 3 of memorandum of appeal in form No.

Due to this inadvertent mistake, the Registry has pointed out delay in filing the appeals. However, after verifying facts on record we are convinced that there is no delay in filing the appeals. Therefore, the appeals are admitted for adjudication on merit.

The common dispute arising for consideration in all these appeals is concerning partial relief granted by learned Commissioner (Appeals) in the matter of addition made on account of alleged non-genuine purchases.

Briefly the facts are, the assessee is an individual. In all the assessment years in dispute, assessee had filed his returns of income in regular course under section 139(1) of the Income Tax Act, 1961. Subsequently, the AO received information from the Sales Tax Department through DGIT (Inv.), Mumbai that certain purchases made by the assessee in different assessment years are not genuine as the concerned selling dealers were found to be providing accommodation bills without actual sale transaction. Based on such information, the AO reopened the assessment in all the assessment years under dispute. As observed by the AO, in response to notice issued under section 142(1) of Act, the assessee appeared and furnished some evidences, such as, ledger account of the selling dealers, bank statement evidencing payment made to the parties, purchases bills etc. However, the assessee could not furnish any evidence to prove delivery of goods at its premises. Further, the AO observed, notices issued under section 133(6) of the Act seeking information from the selling dealers, returned back un-served. Thus, he was of the view that the purchase are non genuine. However, considering the fact that the assessee had furnished statement of purchases and sale transactions, the AO was of the view that the profit element embedded in the doubtful purchases has to be disallowed. Therefore, applying the gross profit rate shown by the assessee in different assessment years, the AO made disallowance as under:- Assessment Year GP Rate Amount disallowed 2009-10 18.39% 27,579/-

Contesting the aforesaid disallowances, assessee preferred appeals before learned Commissioner (Appeals). Partly accepting the submissions of the assessee, learned Commissioner (Appeals) restricted the disallowance to 12.5% in all the years under appeal.

When the appeals were taken up for hearing, no one appeared for the assessee to represent the case. Considering the nature of dispute, we proceed to dispose of the appeals ex-parte qua the assessee after hearing the learned Departmental Representative and based on materials on record. 7. We have considered the submissions of learned Departmental Representative and perused the materials on record. Though, based on certain information received from Sales Tax Department, the AO has treated certain purchases to be non-genuine, however, ultimately he has restricted the disallowance to the profit element embedded in such purchases by applying the gross profit rate shown by in the respective assessment years. Thus, the aforesaid fact reveals that the AO was convinced that the assessee had purchased the goods, though, from unverified sources. Learned Commissioner (Appeals) having found the profit rate adopted by the AO high and excessive has reduced the disallowance to 12.5%. Thus, ultimately, the dispute boils down to the reasonable profit rate which can be considered for disallowance. After considering the overall facts and circumstances of the case and the nature of business carried on by the assessee, we are of the view that the decision of learned Commissioner (Appeals) to restrict the disallowance to 12.5% of the alleged non-genuine purchases, being in conformity with various decisions of the Tribunal and higher Courts in similar nature of cases, deserves to be upheld. Accordingly, we do so. Grounds are dismissed. 8. In the result, appeals are dismissed.