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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI VIKAS AWASTHY, JM & SHRI S. RIFAUR RAHMAN, AM
Vivara International, ITO-19(3)(5), R. No. 201, 2nd floor, 9, Dhanashree Building, बिधम/ P. G. Solanki Marg, Grant Matru Mandir, Tardeo Vs. Road, Mumbai-400 007 Road, Mumbai-400 007 स्थायीलेखासं./जीआइआरसं./ PAN No. AACFV5958N (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant Shri Sanjay J. Sethi, DR : by प्रत्यथीकीओरसे/Respondentby : None सुनवाईकीतारीख/ : 12.01.2021 Date of Hearing घोषणाकीतारीख / : 18.01.2021 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) - 3 in short referred as ‘Ld. CIT(A)’, Mumbai, dated 10.04.19 for Assessment Year (in short AY) 2011-12. Vivara International 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 100% 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. The courts have held that payment made by cheque itself is not sacrosanct so as to prove Vivara International 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 in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition to @ 12.5% of total bogus purchases and computing the profit for the purpose of section 28 of the I.T. Act, 1961 taking into consideration the bogus bills against which no goods have been received?"
2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition to @ 12.5% of total bogus purchases in presuming that the purchase have been made from unknown parties whereas bill have been received from hawala dealer?"
3."Ld.CIT(A) erred in restricting the addition to @12.5% of total bogus purchases that purchases have been made from unknown parties without clarification Vivara International how the payment was made and whether section 69 of the IT Act, 1961 will be applicable or not?"
"Whether on the facts and in the circumstance of the case and in law, Ld. CIT(A) erred in not considering the order of the Hon'ble Supreme Court in the case ofM/s. N.K. Protein Ltd Vs DCIT (SLA-CC Nos. 769 of 2017 dated 16/01/2017), which is on the similar issue of bogus purchases and,when the apex court order was already the law of the land when the Ld.CIT(A) has pronounced its order on 10.04.2019?"
5. "Whether on the facts and in the circumstance of the case and in law, Ld. CIT(A) erred by not following the Hon'ble Gujrat High Court decision in the case ofCIT vs. N.K. . Industries (In Tax Appeal No. 240 of 2009 vide order dated 26.02.2016) wherein 100% of the bogus purchase was held liable to be added in the hands of the assessee reversing the order passed by the Hon'ble ITAT restricting addition to 25%."
The appellant craves leave to amend or alter or add a new ground which may be necessary.
The Appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the Assessing Officer be restored.