OM BSA ENTERPRISES,MUMBAI vs. ITO 26 (2)(6), MUMBAI

The Ld. AR submitted that the appellate order has not considered the outcome of remand proceedings wherein the assessee substantiated these purchase to a great extent. In the alternative, Ld. AR pleaded for certain estimation considering the factual matrix and keeping in mind the assessee‟s nature of business. The Ld. DR, on the other hand, pleaded for dismissal of the appeal.

The material facts are that the assessee being resident firm stated to be engaged as manufacturer of engineering goods was assessed for the year under consideration u/s 143(3) on 22/03/2013. During assessment proceedings, to verify the purchases made by the assessee, notices were issued to seven parties u/s 133(6) as detailed in para-4 of the assessment order. However, the same were returned back by the postal authorities. The assessee could produce only two suppliers. However, it was submitted that the purchases were genuine and the payments were through banking channels. Rejecting the same, Ld. AO made aggregate addition of Rs.22.90 Lacs with respect to 4 entities. 4. Though the assessee preferred further appeal, however, the appeal was disposed-off by Ld. CIT(A) ex-parte qua the assessee on 23/10/2019 wherein the additions so made by Ld. AO were confirmed. From the impugned order, it is quite evident that the order has not considered the outcome of remand proceedings. Aggrieved, the assessee is in further appeal before us. 5. From the material on record, we find that the assessee, vide letter dated 26/09/2018 has filed confirmation of accounts from 4 parties under consideration. The ledger extracts as placed on record would reveal that the assessee has made the payment to these parties though banking channels. Going by the factual matrix, it is evident that assessee‟s sales turnover was not in doubt. There could be no sale without actual purchase of material keeping in view the assessee‟s nature of business. The facts of the case made it a fit case to estimate the profit element embedded in these transactions. Therefore, as pleaded by Ld. AR and to put an end to litigation, we estimate the additions against these purchases @8% which comes to Rs.1,83,266/-. The balance additions stand deleted. The Ld. AO is directed to recomputed assessee‟s income in terms of our above order. 6. The appeal stands partly allowed.

Sd/- Sd/- (Vikas Awasthy) (Manoj Kumar Aggarwal) न्यावयक सदस्य / Judicial Member लेखा सदस्य / Accountant Member मुंबई Mumbai; वदनांक Dated : 15/06/2021 Sr.PS, Jaisy Varghese आदेशकीप्रधिधलधपअग्रेधर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT– concerned 5. विभागीयप्रवतवनवध, आयकरअपीलीयअवधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशान सार/ BY ORDER,