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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आयकरअपील सं./ (िनधा"रण वष" / Assessment Year: 2010-11) M/s. Facets ITO-24(1)(3) बनाम/ 502, Gulshan 2, Pratyakshkar Bhavan Juhu Lane, Andheri (W) BKC, Bandra (E) Vs. Mumbai-400 058 Mumbai-400 051 "थायीलेखासं./जीआइआरसं./PAN/GIR No. AABFF-5276-C (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : None Revenue by : Ms. Usha Gaikwad-Ld. Sr. DR सुनवाई की तारीख/ : 10/05/2021 Date of Hearing घोषणा की तारीख / : 10/05/2021 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
In this appeal for Assessment Year (AY) 2010-11, the assessee is aggrieved by certain addition on account of alleged bogus purchases. Though none appeared for assessee, however, material on record was sufficient for disposal of the appeal. The Ld. DR pleaded for dismissal of appeal.
2 M/s. Facets Assessment Year: 2010-11 2.1 The material facts are that the assessee being resident firm stated to be engaged in trading of diamonds was assessed for the year under consideration u/s 143(3) r.w.s. 147 on 30/06/2016. The original return filed by assessee was processed u/s 143(1). However, pursuant to receipt of certain information from DGIT (Investigation), Mumbai, it transpired that the assessee made alleged bogus purchases of Rs.21.09 Lacs from an entity namely M/s Krishna Diam. Accordingly, the case was reopened as per due process of law and the assessee was required to file requisite detail to substantiate the purchases. 2.2 In support of purchases, the assessee furnished purchase register, sales register, stock register, bank statement, purchase bills, ledger confirmation etc. However, going by the findings of investigation wing that the supplier belonged to a tainted group of Gautam Jain & Ors. and various concerns of this group were not carrying out any genuine business activity, the purchases so made by the assessee were not to be accepted as genuine purchases. Finally, Ld. estimated Gross Profit addition of 21.36% against these purchases.
Upon further appeal, Ld. CIT(A), relying upon the decision of Hon’ble Gujarat High Court in CIT V/s Simit P. Sheth (356 ITR 451), estimated the additions @12.5%. Aggrieved, the assessee is in further appeal before us.
Going by the factual matrix as enumerated in the orders of lower authorities, we find that the Sales Turnover was not in doubt and the assessee was in possession of primary purchase documents. The payment to the supplier was through banking channels. There could be 3 M/s. Facets Assessment Year: 2010-11 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 as well as material on record, estimated the additions @12.5%. The said estimation, in our opinion, could not be termed as unjustified, in any manner. Therefore, finding no reason to interfere in the impugned order, we dismiss the appeal.
The appeal stands dismissed.