DCIT C-3, THANE, MUMBAI vs. PANKAJ MADANRAJ JEERAWALA, MUMBAI

When the appeal was called for hearing, no one was present on behalf of the respondent assessee to represent the case. There is no application seeking adjournment either. Considering the nature of dispute, I proceed to dispose off the appeal ex–parte qua the assessee

The dispute in the present appeal is confined to partial relief granted by learned Commissioner (Appeals) in the matter of addition made by the Assessing Officer on account of non–genuine purchases.

Brief facts are, the assessee is an individual engaged in the business of trading in chemicals. For the assessment year under dispute, the assessee filed his return of income on 8th October 2020, declaring total income of `18,27,729. The return of income so filed by the assessee was initially processed under section 143(1) of the Act. Subsequently, on the basis of information received from the Sales Tax Department, Government of Maharashtra, through DGIT (Inv.), Mumbai, that purchases worth `2,68,176, claimed to have been made during the year from two parties are non–genuine as the concerned parties were identified as a hawala operators, the Assessing Officer re– opened the assessment under section 147 of the Act. During the assessment proceedings, the Assessing Officer called upon the assessee to prove the genuineness of such purchases through supporting evidence. Further, to independently verify the genuineness of such purchases, the Assessing Officer issued notices under section 133(6) of the Act to the concerned parties. However, as alleged by the 3 Shri Pankaj Madanraj Jeerawala Assessing Officer, no reply was received from those parties. Not being satisfied with the evidences furnished by the assessee, the Assessing Officer ultimately concluded that the purchases are non–genuine and disallowed the entire purchases. The assessee challenged the aforesaid addition before the first appellate authority.

After considering the submissions of the assessee in the context of the facts and material on record, learned Commissioner (Appeals) restricted the addition to 10% of the alleged non–genuine purchases.

I have heard the learned Departmental Representative and perused the material on record. It is evident, the doubt regarding the genuineness of the disputed purchases was on the basis of information received from the Sales Tax Department, Government of Maharashtra. However, the Assessing Officer has accepted the fact that the assessee has produced some supporting evidence to prove the genuineness of purchases. The only reason for which he did not accept the purchases to be genuine is, the assessee neither could produce the concerned parties, weighment bills, etc. However, as noted by learned Commissioner (Appeals), the assessee had produced purchase bills, ledger extract, stock register and transport bills. Further, no discrepancy has been found in the quantitative details and stock. The sales have not also been doubted. Therefore, he has proceeded to add

In the result, appeal is dismissed. Order pronounced on 28/01/2021