ITO-32(3)(2), MUMBAI, MUMBAI vs. SMT. RUPA J. SHAH, MUMBAI, MUMBAI

आअसं. 5770/मुं/2019 (िन.व.2010-11) (A.Y.2010-11) various (nine) dealers, declared as hawala operators by the Sales Tax Department, Government of Maharashtra. The assessee has failed to prove genuineness of dealers and the purchases made from them. No confirmations were filed by the assessee from the dealers nor any documentary evidence was furnished by the assessee to prove trail of goods. The Assessing Officer (AO) made disallowance of Rs. 3,09,348/- by estimating margin @ 25% on bogus purchases. In first appellate proceedings, the CIT(A) has restricted the disallowance to 12.5%. The ld. Departmental Representative (DR) pointed that estimation made by AO is reasonable and fair, therefore, the same should be upheld.

Submissions made by ld. DR heard, orders of the authorities below examined. Undisputedly, the assessee failed to discharge his onus in proving genuineness of the dealers and the alleged purchases made from them. It is only the profit element embedded in such unproved purchases that can be brought to tax. The AO made estimated disallowance of 25% on bogus purchases. The CIT(A) after examining the facts and after placing reliance on the order of CIT(A) in AY 2011-12 in assessee’s own case on identical facts restricted the addition to 12.5% of bogus purchases. I am of considered view that disallowance of 25% by the AO is on higher side. I see no reason to interfere with the estimation made by CIT(A). The appeal of Revenue is dismissed, sans merit. Order pronounced in the open court on Friday, the 02nd day of July, 2021.