ASST CIT 28 (1), NAVI MUMBAI vs. BIJOY DEVASSY THOPPIL, NAVI MUMBAI

Aforesaid appeal by revenue for Assessment year (AY) 2009- 10 contest the order of Ld. Commissioner of Income Tax (Appeals)- 26, Mumbai [in short CIT(A) ] dated 22/10/2019 which has provided certain relief to the assessee on account of alleged bogus purchases.

The Ld. DR pleaded for restoration of assessment framed by Ld. AO whereas Ld. AR pleaded for dismissal of the appeal. 3.1 The material facts are that the assessee being resident individual stated to be engaged as civil contractor was assessed for the year under consideration u/s 144 r.w.s. 147 on 09/03/2015. Pursuant to receipt of certain information from DGIT (Inv.) / Sales Tax Department, Mumbai, it transpired that the assessee made alleged bogus purchases of Rs.5.88 Lacs from an entity namely M/s Praveen Steel Traders / Anuradha Traders. Accordingly, the case was reopened and the assessee was required to file requisite details to substantiate these purchases. 3.2 The assessee could not defend the purchases so made and notices issued by Ld. AO u/s 133(6) to the supplier to confirm the transaction did not elicit any satisfactory response. Consequently, Ld. AO disallowed these purchases and added them back to assessee’s income. 4. During appellate proceedings, the assessee, inter-alia, submitted that the material purchased from the stated supplier was utilized in the executing the work contracts and therefore, the purchases could not be held to be bogus. The Ld. CIT(A) concurred with the submissions that there could not be any sales without corresponding purchases and therefore, restricted the additions to 12.5% of these purchases. Aggrieved, the revenue is in further appeal before us. 5. Going by the factual matrix as enumerated in the orders of lower authorities, we find 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. The Ld. CIT(A), after due consideration of material on record, estimated the additions @12.5% which is more than enough to take care of the leakage of revenue. Therefore, the estimation could not be termed as unjustified, in any manner. Finding no reason to interfere in the impugned order, we dismiss the appeal. The appeal stands dismissed. 6. Order pronounced on 15th June, 2021.