ACIT-27(3), MUMBAI vs. SANGEET KUMAR PABRA, MUMBAI

When the case was called for hearing, none appeared on behalf of the respondent assessee. Therefore, I proceed to dispose off the appeal ex–parte qua the respondent assessee after hearing the 2 Shri Sangeet Kumar Pabra learned Departmental Representative and on the basis of material on record.

The issue raised by the Revenue in the present appeal relates to addition made partly sustained by the learned Commissioner (Appeals) on account of non–genuine purchases being partly sustained by learned Commissioner (Appeals).

Brief facts are, the assessee, an individual, is engaged in the business of works contractor. For the assessment year under dispute, the assessee filed his return of income in the regular course on 18thSeptember 2009, declaring total income of `14,09,620. Subsequently, on the basis of information received from the Sales Tax authorities through the Investigation Wing of the Department indicating that the assessee is a beneficiary of accommodation entries provided by hawala operators through bogus purchase bills, the Assessing Officer re–opened the assessment under section 147 of the Income Tax Act, 1961 (for short "the Act"). During the assessment proceedings, the Assessing Officer called upon the assessee to prove the genuineness of purchases worth `10,42,218, claimed to have been made during the year from two parties. Further, to independently verify the genuineness of such purchases, the Assessing Officer issued notices under section 133(6) of the Act to the selling dealers calling for 3 Shri Sangeet Kumar Pabra certain information. However, all such notices returned back unserved. Further, the Assessing Officer was not satisfied with the evidences furnished by the assessee to establish the genuineness of purchases. Thus, ultimately, the Assessing Officer treated the purchases worth `10,42,218, as non–genuine and added back to the income of the assessee. Being aggrieved with such addition, the assessee preferred appeal before the first appellate authority.

After considering the submissions of the assessee in the context of facts and material on record, the learned Commissioner (Appeals) restricted the disallowance made by the Assessing Officer to 12.5% of the alleged non–genuine purchases.

Before me, the learned Departmental Representative strongly relied upon the observations of the Assessing Officer and submitted that the assessee having failed to prove the genuineness of purchases, the entire amount representing such purchases has to be added.

Having considered the submissions of the learned Departmental Representative, I find that though the assessee may not have been able to prove the genuineness of purchases from the declared source, however, it is a fact on record that the Assessing Officer has not disputed the assessee has executed contract work during the year. Therefore, it goes to prove that the assessee must have purchased