ITO WARD 1 (1), THANE vs. M/S NEXGEN PLASTIC & METAL COMPONENTS, THANE

Aforesaid appeals by revenue for Assessment years [AY in short] 2010-11 and 2011-12 contest common order of ld. Commissioner of Income Tax (Appeals)-1, Thane [in short CIT(A) ] which has restricted the addition on account of suspicious purchases as against full addition made by Ld. AO.

Though none appeared for assessee, however, material on record was sufficient for disposal of the appeals. The Ld. DR pleaded for restoration of assessment framed by Ld. AO. 3.1 The material facts are that the assessee being resident firm stated to be engaged in manufacturing of plastic and metal components has been assessed, in similar manner, for both the years u/s 143(3) r.w.s. 147 on 28/08/2014. The assessment was so framed pursuant to receipt of certain information from Sales Tax Department that the assessee procured accommodation purchase bills from suspicious dealers. The assessee made purchase of Rs.2.62 Lacs from 2 parties in AY 2010-11 as detailed in the assessment order. The quantum of purchase in AY 2011-12 is Rs.3.12 Lacs. 3.2 Though the assessee filed certain documentary evidences in support of purchases, however, notices issued u/s 133(6) did not elicit any satisfactory response. Consequently, these purchases were disallowed and added back to assessee’s income in both the years. 4. Upon further appeal, Ld. CIT(A) noted that the assessee produced copies of bills, bank statements and ledger extracts of the suppliers. However, the claim that the purchases were genuine could not be accepted in totality in view of the investigation carried out by sales tax authorities. Accordingly, the profit attributable to these transactions was to be brought to tax. The estimation was done at 12.5% for both the years which has given rise to revenue’s appeals before us. 5. Going by the material on record and after due consideration of factual matrix, we find that the issue rightly been clinched in proper perspective by Ld. CIT(A). Since the sales were not in doubt, it was a fit case to estimate the profit element embedded in these transactions. The estimation of 12.5% was quite fair and reasonable. Concurring with findings of Ld. CIT(A) in the impugned order, we dismiss both the appeals. 6. Both the appeals stands dismissed. Order pronounced on 5th April, 2021.