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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI VIKAS AWASTHYShri Rajiv Kiran Mehta,
अपीलाथ) -ारा/ Appellant by : Shri Sushil Kumar Mishra *ितवाद, -ारा/Respondent by : None सुनवाई क. ितिथ/ Date of hearing : 30/03/2021 घोषणा क. ितिथ/ Date of pronouncement : 28/05/2021 आदेश/ ORDER PER VIKAS AWASTHY, J.M: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-32, Mumbai [hereinafter referred to as ‘the CIT(A)’] ' dated 19.06.2019 for the Assessment Year (AY) 2009-10.
The brief facts of the case as emanating from the records are: The assessment for AY 2009-10 in the case of assessee was re-opened on the basis of आअसं. 5647/मुं/2019 (िन.व.2009-10) (A.Y.2009-10)
information received from the Sales Tax Department, Government of Maharashtra that the assessee has obtained bogus purchase bills amounting to Rs. 1,12,888/- from M/s Mahavir Enterprises during the period relevant to AY under appeal. During assessment proceedings, the assessee failed to discharge his onus in proving genuineness of the purchases and authenticity of the dealer. The AO made addition of the entire such purchases. Against the assessment order dated 30.11.2015 passed under section 143(3) read with section 147 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], the assessee filed appeal before the CIT(A). The CIT(A) after examining the facts and considering the Gross Profit (GP) ratio declared by the assessee restricted the addition to 6% of the bogus purchases. Now, the Revenue is in appeal against the relief granted by the CIT(A).
Shri Sushil Kuamr Mishra representing the Department vehemently defended the assessment order and prayed for reversing the findings of CIT(A). The ld. DR submitted that the assessee has not been able to prove genuineness of the purchases and dealer, therefore, the AO rightly added entire bogus purchases.
Submissions made by ld. DR heard, orders of authorities below examined. The assessee is engaged in trading of welding electrodes and allied products. The assessee allegedly obtained bogus purchase bills amounting to Rs. 1,12,588/- from a dealer declared as hawala operator by the Sales Tax Department, Government of Maharashtra. Undisputedly, the assessee failed to discharge his onus in proving genuineness of the purchases and the dealer. It is also a matter of fact that the sales turnover declared by the assessee has not been disputed by the आअसं. 5647/मुं/2019 (िन.व.2009-10) (A.Y.2009-10)
AO. Without purchases, there cannot be sales, therefore, it is only the profit element embedded in such transactions, that has to be brought to tax (Re: PCIT v/s Paramshakti Distributors Pvt. Ltd., decided on 15.07.2019). The CIT(A) after considering Gross Profit (GP) declared by the assessee has made addition escaped profit on bogus purchases at 6%. I concur with the findings of CIT(A), hence, impugned order is upheld and the appeal of Revenue is dismissed, sans merit.
Order pronounced in the open court on Friday, the 28th day of May, 2021.