ITO 33 (1)(8), MUMBAI vs. SHRI. SANDEEP PRAMODKUMAR GULATI, MUMBAI

The brief facts of the case as emanating from records are: The assessee is a reseller of hardware and tools. The assessment in the case of assessee for AY 2011-12 was reopened on the basis of information received from the DGIT (Investigations), Mumbai. As per information received, the assessee had obtained accommodation entries amounting to Rs. 8,68,015/- from M/s Ankit Enterprises. The AO made addition on entire alleged bogus purchases. Against the assessment order dated 21.12.2018, the assessee filed appeal before the CIT(A). The CIT(A) after examining the facts restricted the addition to 12.5% of bogus purchases. Against the findings of the CIT(A), the Revenue is in appeal.

Shri Sanjay J. Sethi representing the Department vehemently defended the assessment order. In support of his submissions, the ld. DR placed reliance on the decision rendered in the case of N.K. Proteins Ltd. by the Hon’ble Supreme Court of India. The ld. DR submitted that the assessee has not been able to prove genuineness of the purchases and authenticity of the dealer.

Submissions made by ld. DR heard and orders of authorities below examined. Undisputedly, the assessee has failed to discharge his onus in proving genuineness of the dealer and the purchases made from the said dealer. At the same time, the AO accepted the sales turnover declared by the assessee. Without purchases, there cannot be sale. In such like bogus transactions, it is only the profit element embedded in the transaction that can be brought to tax. (Re: PCIT vs. Paramshakti Distributors Pvt. Ltd. in of 2017 decided on 15.07.2019 by Hon’ble Bombay High Court). The CIT(A) after examining the facts of case and considering various decisions rendered by the Tribunal restricted the addition to 12.5% of bogus purchases. I find no आअसं. 7698/मुं/2019 (िन.व.2011-12) (A.Y.2011-12)

infirmity in the impugned order, hence, the same is upheld and appeal of the Revenue is dismissed, being devoid of any merit.