INCOME TAX OFFICER 32 (2) (4) , MUMBAI vs. SHRI NILESH M JAINQ, MUMBAI

Shri Ashok Sharma appearing on behalf of the assessee submitted that the assessee is a building material supplier. The assessment in the case of assessee for assessment year 2010-11 was reopened on the ground that the assessee has obtained bogus purchase bills amounting to Rs.49,11,365/- from various (13) hawala dealers. The assessee furnished relevant documents Including purchase bills, and details of payments made through cheque to substantiate genuineness of purchases. After considering the details furnished by the assessee, the Assessing Officer made addition of Rs.6,13,924/- by estimating G.P @ 12.5% on alleged bogus purchases. In first appeal, the CIT(A) took cognisance of G.P declared by the assessee and restricted the addition to 9% of bogus purchases. The same has been accepted by the assessee. The ld.Authorized Representative of the assessee defended the order of CIT(A) and prayed for dismissing appeal of the Revenue.

Per contra, Ms. Smita Verma representing the Department vehemently defended the assessment order. The ld.Departmental Representative submitted that the assessee has failed to prove genuineness of purchases and the dealers. The notices issued under section 133(6) of the Income Tax Act,1961 ( in short 'the Act') by the Assessing Officer were returned back by the postal authorities with the remarks ‘left’. Neither any confirmation from the dealers were filed by the assessee nor any documentary evidence to substantiate trail of goods was produced by the assessee. The ld. Departmental Representative prayed for reversing the findings of CIT(A) and upholding the addition on account of bogus purchases made by Assessing Officer.

Both sides heard, orders of authorities below examined. Undisputedly, the assessee failed to prove genuineness of the dealers and the purchase made from them. The Assessing Officer made estimated addition of 12.5% on alleged bogus purchases. The CIT(A) has restricted the addition to 9%. The assessee has declared over all G.P of 8.11%. I find no infirmity in the impugned order, the same is upheld and appeal of the Revenue is dismissed, being devoid of any merit.