ITO 26 (2)(7), MUMBAI vs. SMT. NIRMALA TUKARAM BOTRE, MUMBAI

Aforesaid appeal by revenue for Assessment Year (AY) 2009-10 & 2010-11 contest separate orders of learned first appellate authority. However, the facts as well as issue is quite identical in both the years and therefore, the appeals are being disposed-off by way of this common order for the sake of convenience & brevity. The learned CIT(A) has provided certain relief to the assessee on account of alleged bogus purchases. Aggrieved, the revenue is in further appeal before us whereas it appears that the assessee has accepted the verdict of learned first appellate authority.

Though none appeared for assessee, however, material on record was sufficient for disposal of the appeal. The Ld. DR pleaded for restoration of assessment framed by Ld. AO. 3.1 The material facts in AY 2009-10 are that the assessee being resident individual stated to be engaged in manufacturing of chemicals etc. was assessed for the year under consideration u/s 143(3) r.w.s. 147 on 07/08/2014. The original return was processed u/s 143(1). Pursuant to receipt of certain information from DGIT (Inv.) / Sales Tax Department, Mumbai, it transpired that the assessee made alleged bogus purchases of Rs.20.29 Lacs from two entities as detailed in the assessment order. Accordingly, the case was reopened as per due process of law and the assessee was directed to substantiate these purchases. 3.2 Though the assessee filed certain documents, however, the assessee, in the opinion of Ld. AO, could not substantiate the delivery of material. Accordingly the aforesaid purchases were added back to the income of the assessee u/s 69C. 4. The assessee assailed the impugned additions, inter-alia, by submitting that the payment to the suppliers was through banking channels and the source of payment was explained. The Ld. CIT(A) concurred that there could not be corresponding sales without purchase of material and therefore, Ld. AO was directed to estimate the additions @12.5% against 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 and the payment to the suppliers was through banking channels. 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 assessee’s submissions, 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. 6. The facts are similar in AY 2010-11 wherein Ld. AO disallowed purchases of Rs.22.71 Lacs. The Ld. CIT(A) restricted the additions to 12.5% of these purchases. Aggrieved, the revenue is in further appeal before us. Facts being pari-materia the same as in AY 2009-10, taking the same view, we dismiss the appeal. Both the appeals stands dismissed. 7. Order pronounced on 14th June, 2021. (Vikas Awasthy) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member मुंबई Mumbai; िदनांक Dated : 14/06/2021 Sr.PS, Jaisy Varghese