SHRI. RATANKUMAR SINGHANIA,MUMBAI vs. ITO 29 (3)(1), MUMBAI

Though none appeared for assessee, however, material on record was sufficient for disposal of the appeal. The Ld. DR pleaded for dismissal of the appeal. 3.1 The material facts are that the assessee being resident individual stated to be engaged in manufacturing of tools & dyes was assessed for the year under consideration u/s 143(3) r.w.s. 147 of the Act on 19/02/2015. The original return filed by the assessee was processed u/s 143(1) of the Act. However, pursuant to receipt of certain information from DGIT (Inv.) / Sales Tax Department, Mumbai, it transpired that the assessee procured accommodation purchase bills of Rs.63.66 Lacs from seventeen entities as detailed in the assessment order. Accordingly, the case was reopened as per due process of law and the assessee was required to file requisite details to substantiate the purchases. 3.2 In support, the assessee filed documentary evidences in the shape of copies of purchase bills, ledger extracts, and bank statement evidencing payment to the supplier through banking channels. However, it failed to produce any of the suppliers for confirmation of account. The Ld. AO, relying upon the decision of Hon’ble Gujarat High Court in CIT V/s Simit P.Sheth (2012; 356 ITR 451), estimated addition 12.5% against these purchases. The action of Ld. AO, upon confirmation by Ld. CIT(A), is in further challenge before us. 4. Going by the factual matrix as enumerated in the orders of lower authorities, we find that the assessee’s Sales Turnover was not in doubt and the assessee was in possession of primary purchase documents. 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. At the same time, the assessee could not produce even single supplier to confirm the transactions. The facts of the case made it a fit case to estimate the profit element embedded in these transactions. Both the lower authorities, after due consideration of assessee’s submissions as well as material on record, estimated the additions @12.5% which is quite fair to plug 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. 5. So far as the legal grounds are concerned, we find that the original return was processed u/s 143(1) and Ld. AO was in possession of tangible material so as to reopen the case of the assessee. The said material indicated possible escapement of income in the hands of the assessee. Nothing more was required at this stage. Therefore, no infirmity could be found in the jurisdiction of Ld. AO. 6. The appeal stands dismissed. Order pronounced on 08th June, 2021. (Vikas Awasthy) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member मुंबई Mumbai; िदनांक Dated : 08/06/2021 Sr.PS, Jaisy Varghese