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Income Tax Appellate Tribunal, “A”
Before: SHRI C. N. PRASAD, JM & SHRI S. RIFAUR RAHMAN, AM
Anitha Art Printers, ITO-22(1)(1), R. No. 319, 3rd floor, 29/30 Oasis Industrial बिधम/ Estate, Near Vakola Masjid Piramal Chambers, Vs. Santacruz (E), Lalbaug, Mumbai-400 055 Mumbai-400 012 स्थायीलेखासं./जीआइआरसं./ PAN No. AAEFA9362P (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant Shri Michael Jerald, DR : by प्रत्यथीकीओरसे/Respondentby : None सुनवाईकीतारीख/ : 09.03.2021 Date of Hearing घोषणाकीतारीख / : 15.03.3021 Date of Pronouncement आदेश / O R D E R
Per S. Rifaur Rahman, Accountant Member:
The present Appeal has been filed by the revenue against the order of Ld. Commissioner of Income Tax (Appeals) - 34 in short referred as ‘Ld. CIT(A)’, Mumbai, dated 20.05.19 for Assessment Year (in short AY) 2011-12. Anitha Art Printers 2. At the outset, it is noticed that none appeared on behalf of assessee in spite of calls and even no application for adjournment was moved. On the other hand, Ld. DR is present in the court and is ready with arguments. Therefore, we have decided to proceed with the hearing of the case ex-parte with the assistance of the Ld. DR and the material placed on record.
The brief facts of the case are, based on the information received from the DGIT(Inv) and Maharashtra Sales Tax Department about the accommodation entries obtained by the assessee. Accordingly, assessment was reopened u/s 147 of the Act and subsequently assessment was completed u/s 143(3) r.w.s 147 of the Act by the AO thereby making 35% addition on account of bogus purchases.
4. Aggrieved by the above order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the submission of assessee, Ld. CIT(A) agreed with the AO that this purchases were not genuine and does not mean that purchases made from these parties are genuine. Further, he observed that the courts have held that payment made by cheque itself is not Anitha Art Printers sacrosanct so as to prove the genuineness of the purchases when the surrounding circumstances are suspect. However, the assessee has shown onwards sales which has not been doubted by the AO. By relying on various case law, he reduced the disallowance @ 12.5% of bogus purchases and partly allowed the appeal of the assessee.
Now before us, the revenue has preferred appeal by raising the grounds of appeal as under:-
1. "Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in restricting the addition to 12.5% of bogus purchases as against 35% made by the assessing officer, misrepresenting the judgment in the case of M/s Simit P Seth (356 1TR 461 (Guj) and ignoring the fact that the assessee completely failed in substantiating the purchases made from Hawala Parties."
2. "On the facts and circumstances of the case and in law, Ld CIT(A) has failed to appreciate that onus is on the assessee to explain and substantiate the genuineness and true nature of purchase transactions."
Anitha Art Printers 3. "The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the A.O. be restored."
"The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary."
Considered the submission of Ld. DR and material placed on record. We are of the considered view that no doubt the purchases made from the suspected parties are not genuine. However, the purchases itself cannot be doubted as rightly adjudicated by Ld. CIT(A) that AO has not doubted sales declared by the assessee, only he suspects the purchases. Even the revenue raised grounds of appeal mainly on the purchases not being genuine. Ld. CIT(A) has considered the corresponding onward sales and came to the decision. By respectfully following the decision of Hon’ble Gujrat High Court in the case of CIT vrs. Smith P. Sheth 356 ITR 451 (Guj), we are inclined to agree with the findings of Ld. CIT(A). Therefore, grounds raised by the revenue are dismissed.