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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
O R D E R Per Mahavir Singh, VP: This appeal by the Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)-12, Mumbai (‘CIT(A)’ for short) in appeal no. CIT(A)-12/DCIT- 6(2)(1)/B2-286/16-17 vide order dated 20.05.2019. The assessment was framed by the DCIT, Circle-6(2)(1), Mumbai u/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2010-11 vide his order dated 30.03.2016.
The only issue in this appeal of Revenue is as regards to the order of the ld. CIT(A), deleting the addition made by the Assessing Officer (‘A.O.’ for short) in regard to bogus purchases amounting to Rs.2,36,250/-. The Revenue has raised the issue of applicability of provisions of section 40(A)(3) of the Act also.
We have heard the rival contentions and gone through the facts and circumstances of the case. The A.O. noted that the assessee has debited a sum of Rs.2,36,250/- in the trading account being bogus purchases from M/s. Siddhivinayak Steel. According to the A.O., M/s. Siddhivinayak Steel was a hawala party, in view of the information received
(A.Y. 2010-11) Asst. CIT vs. M/s. Chanvim Engineering Pvt. Ltd. from the office of the DGIT (Investigation), Mumbai and subsequently from the Sales Tax Department, Mumbai regarding suspicious parties who were only providing accommodation entries without doing any actual business. Accordingly, the A.O. required the assessee to prove these purchases and assessee in turn filed invoices of purchase of goods, payment made by account payee cheque and also the stock register, wherein these purchases are entered. The A.O. has not doubted the sales, but only stated that the assessee could not provide the details of transportation of materials, i.e., delivery challan, etc. Hence, he added the entire purchases as bogus purchases.
Aggrieved, the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) deleted the addition by stating that the assessee has filed purchase invoices, payment made by account payee cheque and also recorded in the stock register the goods purchased from M/s. Siddhivinayak Steel. It was also noted by the ld. CIT(A) that the assessee has recorded these purchases in the purchase register and purchase return register submitted by the assessee for the period 01.04.2009 to 31.03.2010, amounting to Rs.2,36,250/-. Once, the amount is returned by the assessee to the supplier vide purchase return register entry dated 31.03.2010, no disallowance on account of bogus purchase can be made. In view of these reasons, the ld. CIT(A) deleted the addition.
We noted that the above facts are uncontroverted even now before us, as the learned Sr. DR could not rebut the findings or could not produce anything that these goods were returned by the assessee is doubted. Hence, we are of the view that the ld. CIT(A)’s view is reasonable and we accept the same.
In the result, the Revenue’s appeal is dismissed.