ASST. CIT 6(2)(1), MUMBAI vs. M/S CHINTAMANI JEWELLERY ARCADE PVT LTD., MUMBAI

The only issue in this appeal is against the order of the ld. CIT(A) in restricting the disallowance of bogus purchase @ 12.5% being bogus purchases of Rs.2,54,737/- which comes to Rs.31,842/-. For this, the Revenue has raised the various grounds, which we need not to reproduce for the sake of brevity.

We have heard the rival contentions and gone through the facts and circumstances of the case. Brief facts are that the assessee is in the business of jewellery and dealing in gold ornaments, diamond jewellery and silver articles. During the course of assessment proceedings, the Assessing Officer (A.O. for short) noted that the assessee has debited bogus purchases of Rs.2,54,737/- from one hawala parties, M/s. Krishna Diam as per the information received from the DGIT (Investigation), Mumbai. The A.O. added the entire bogus purchases of Rs.2,54,737/-.

In first appeal, the ld. CIT(A) restricted the disallowance at 12.5% of the bogus purchases and thereby restricted the addition at Rs.31,842/- being 12.5% of Rs.2,54,737/- We note that the assessee before the A.O. as well as before ld. CIT(A) and even now before us stated that the assessee has complete copies of purchase invoice, corresponding sales invoice, ledger account of parties, payment made by account payee cheque, which can be verified from the bank statement and even stock registers. We note that the simple non production of transportation bill, cannot treat the purchases as ingenuine or bogus purchases. We note that the ld. CIT(A) has restricted the disallowance of bogus purchases at 12.5%. We see no infirmity in the order of the ld. CIT(A) and the appeal of the Revenue is dismissed.

In the result, this appeal by the Revenue is dismissed. Order pronounced in the open court on 18.03.2021.