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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: HON’BLE SHRI AMARJIT SINGH, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
Assessee by : None Revenue by : Ms. Smita Verma-Ld. DR सुनवाई की तारीख/ : 05/07/2021 Date of Hearing घोषणा की तारीख / : 05/07/2021 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue is a recalled matter since the appeal was disposed-off by Tribunal vide order dated 30/01/2019 on account of low tax effect. However, the order was recalled at revenue’s instance vide order dated 10/05/2021 since the matter was found to be covered under exception 10(e) of CBDT Circular No. 03/2018 dated 11/07/2018. Accordingly, the appeal has come up for fresh hearing before this bench.
None has appeared for assessee. The perusal of order sheet entries would reveal that none is appearing for assessee since last many ocassions. Even none was present when the appeal was heard on 28/01/2019 and also when revenue’s misc. application was heard on 05/03/2021. Left with no option, we proceed to adjudicate the appeal after hearing Ld. Sr. DR who pleaded for restoration of assessment framed by Ld. AO. The only issue involved in the appeal is estimated addiitons on account of alleged bogus purchases.
The material facts are that the assessee being resident individual stated to be engaged in trading of chemicals was assessed for the year under consideration u/s 144 r.w.s. 147 on 25/02/2015. Pursuant to receipt of certain information from DGIT (Inv.) / Sales Tax Department, Mumbai, it was alleged that the assessee made suspicious purchases aggregating to Rs.43.94 Lacs from 14 entities as detailed in the assessment order. Accordingly, the case was reopened as per due process of law and the assessee was required to file requisite details to substantiate these purchases. Since the assessee failed to attend the assessment proceedings, these purchases were disallowed and added back to the income of the assessee. 4. During appellate proceedings, the assessee submitted that corresponding sales were affected and the payment to the suppliers was through banking channels. The attention was drawn to the fact that similar addition in AYs 2010-11 & 2011-12 were estimated by Ld. AO @12.5%. The Ld. CIT(A), in the light of factual matrix as well as assessee’s submissions, opined that there could be no sales without purchases and therefore, entire purchases could not be disallowed. Finally, the estimation was made @12.5% to plug the revenue leakage. Aggrieved, the revenue is in further appeal before us. 5. Going by the factual matrix as enumerated in the orders of lower authorities, we concur with findings of Ld. CIT(A) that there could be no sales without purchases keeping in view the fact that the assessee was engaged in trading activities. Similar estimation was made by Ld. AO in earlier years @12.5%. Therefore, to plug the revenue leakage, estimation of 12.5% was quite fair and reasonable. By confirming the same, we dismiss the appeal. 6. The appeal stands dismissed.