GUL MANOHARLAL MAKHIJANI,MUMBAI vs. ITO, WARD - 2(1), KALYAN

O R D E R

PER AMARJIT SINGH, JM:

On the facts and circumstances of the case and in law, “1. the Honorable Commissioner of Income Tax (Appeals) was not justified in holding that 12.5% of the alleged total suspicious purchases be disallowed. The learned AO had disallowed the total alleged suspicious purchases amounting to Rs.49,72,735/-.

The appellant craves leave to add and/or amend the grounds of appeal before or at the time of hearing.”

S. Name of the Entry Provider amount in the bills taken by the Amount of bill taken by the No. assessee assessee 1 Nageshwar Enterprises 35,119 2 Top Shop Trading Company Pvt. Ltd. 1,80,037 3 Om Corporation 11,21,169 4 Laxmi Trading Co. 3,28,296 & 3209/M/2019 A.Y. 2009-10 & 2010-11 5 Nikhil Enterprise 2,75,580 6 G.M. International 2,24,192 7 Jigan Enterprises 8,69,564 8 Parshva & Co 17,49,485 9 Dhruv Sales Corporation 1,89,293 Total Rs.49,72,735 Thereafter, notice u/s 148 of the Act was issued and served upon the assessee. Notices u/s 143(2) & 142(1) were issued and served upon the assessee. After the reply of the assessee, the AO raised the addition to the extent of 49,72,735/- i.e. 100% of the bogus purchase and the total income of the assessee was assessed to the tune of Rs.58,85,440/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who restricted the addition to the extent of 12.5% of the bogus purchase in sum of Rs.49,72,735/- works out to Rs.6,21,591/- but the assessee was not satisfied, therefore, the assessee has filed the present appeal.

ITA. Nos.3208 & 3209/M/2019 A.Y. 2009-10 & 2010-11 “6. After due consideration of factual matrix as enumerated in the preceding paragraphs, it is quite evident that the assessee was engaged in the business of civil construction which would require consumption of material. The purchase transactions carried out by the assessee with suspicious suppliers were evidenced by copies of invoices and the payments were through banking channels. The confirmation of accounts as well as PAN of the suppliers was duly furnished. The sales turnover achieved by the assessee was not disputed by Ld. AO. At the same time, the assessee failed to produce any of the suppliers for confirmation of accounts and notices issued u/s 133(6) did not elicit satisfactory response. Therefore, it was a fit case for estimation of additions on these suspicious purchases. In our considered opinion, Ld. CIT(A) has clinched the issue in the correct perspective. The estimation of 12.5% was quiet fair and reasonable and the same do not require any interference on our part. Therefore, by confirming the stand of Ld. CIT(A), we dismiss the appeal.

7. Facts as well as issues are pari-materia the same in AY 2010-11 wherein the assessee was saddled with additions of Rs.96.98 Lacs on account of suspicious purchases. The Ld. CIT(A) restricted the same to 12.5% applying similar reasoning and logic. Aggrieved, the revenue is in further appeal before us with identical grounds. Since, the facts as well as issues are identical as in AY 2009-10, applying adjudication of that year, we dismiss this appeal also.”

ITA. NO.3209/M/2019

7. The assessee has filed the present appeal against the order dated 22.02.2019 passed by the Commissioner of Income Tax (Appeals)-3, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2010-11. & 3209/M/2019 A.Y. 2009-10 & 2010-11 8. The assessee has raised the following grounds: -

“ 1. On the facts and circumstances of the case and in law, the Honorable Commissioner of Income Tax (Appeals) was not justified in holding that 12.5% of the alleged total suspicious purchases be disallowed. The learned AO had disallowed the total alleged suspicious purchases amounting to Rs.96,98,939/-.

2. The appellant craves leave to add and/or amend the grounds of appeal before or at the time of hearing.”

S. No. Name of the Entry Provider amount in the bills taken by the Amount of bill taken by the assessee assessee 1 Shubhlaxmi Sales Corp. Rs.11,78,050 2 Amar Enterprises Rs.15,50,411 3 Jigan Enterprises Rs.60,818 4 Mercury Enterprises Rs.16,12,352 5 Nikhil Enterprises Rs.35,336 6 Hitech Impex Rs.3,26,801 7 Om Corporation Rs.13,64,197 8 Daksha Enterprises Rs.18,28,985 & 3209/M/2019 A.Y. 2009-10 & 2010-11 9 Parshva & Co. Rs.17,40,989 Total Rs.96,98,939 Thereafter, notice u/s 148 of the Act was issued and served upon the assessee. Notices u/s 143(2) & 142(1) were issued and served upon the assessee. After the reply of the assessee, the AO raised the addition to the extent of 96,98,939/- i.e. 100% of the bogus purchase and the total income of the assessee was assessed to the tune of Rs.1,10,93,890/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who restricted the addition to the extent of 12.5% of the bogus purchase in sum of Rs.96,98,939/- works out to Rs.12,12,367/- but the assessee was not satisfied, therefore, the assessee has filed the present appeal before us.

“6. After due consideration of factual matrix as enumerated in the preceding paragraphs, it is quite evident that the assessee was engaged in the business of civil construction which would require consumption of material. The purchase transactions carried out by the assessee with suspicious suppliers were evidenced by copies of invoices and the payments were through banking channels. The confirmation of accounts as well as PAN of the suppliers was duly furnished. The sales turnover achieved by the assessee was not disputed by Ld. AO. At the same time, the assessee failed to produce any of the suppliers for confirmation of accounts and notices issued u/s 133(6) did not elicit satisfactory ITA. Nos.3208 & 3209/M/2019 A.Y. 2009-10 & 2010-11 response. Therefore, it was a fit case for estimation of additions on these suspicious purchases. In our considered opinion, Ld. CIT(A) has clinched the issue in the correct perspective. The estimation of 12.5% was quiet fair and reasonable and the same do not require any interference on our part. Therefore, by confirming the stand of Ld. CIT(A), we dismiss the appeal.