KHIMCHAND OKCHAND BHANSALI,MUMBAI vs. INCOME TAX OFFICER, WARD -19(2)(2), MUMBAI

माननीय"ी"वकासअव"थी, "या"यकसद"यएवं माननीय"ीमनोजकुमारअ"वाल ,लेखासद"यकेसम"। BEFORE HON’BLE SHRI VIKAS AWASTHY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing through video conferencing mode) आयकरअपीलसं./ (िनधा"रणवष" / Assessment Year:2009-10) KhimchandOkchand Bhansali ITO-Ward 19(2)(2) बनाम/ Matru Mandir, 2nd Floor, 601/602, Siddesh Jyoti Balaram Street Tardeo Road, Mumbai-400 007. Vs. Mumbai-400 004. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AFZPB-7737-B (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant by : Shri Dhaval Shah-Ld. AR ""थ"कीओरसे/Respondent by : Shri R. Bhoopathi-Ld. DR सुनवाईकीतारीख/ : 02/09/2020 Date of Hearing घोषणाकीतारीख / : 02/09/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member):- 1.1 Aforesaid appeal by assessee for Assessment Year [in short referred to as ‘AY’] 2009-10 contest the order of Ld. Commissioner of Income-Tax (Appeals)-30, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-30/19(2)(2)/666/2015-16 dated 17/08/2018 on certain grounds of appeal

. Though the assessee has KhimchandOkchand. Bhansali Assessment Year-2009-10 raised multiple grounds of appeal, however, Ld. Authorized Representative for Assessee, Shri Dhaval Shah, drawing attention to ground no.4, pleaded for reduction in estimated addition of 12.5% keeping in view the assessee’s nature of business. Our attention has been drawn to the fact that the assessee has declared Gross Profit Rate of more than 3% during the year which is normal profit rate in the assessee’s line of business. No other arguments have been advanced before us. Per Contra, Ld. DR submitted that the assessee remained negligent in attending the appellate proceedings before Ld. CIT(A) despite being provided with various opportunities of being heard. 1.2 The grounds of appeal raised by the assessee read as under: -

1. The Ld. CIT(A) has erred in law and in facts in confirming the action of the assessing officer in re-opening of the assessment u/s. 147 of the Act which is invalid and bad in law.

2. The Ld. CIT(A) has erred in law and in facts in passing order without complying with principles of natural justice.

3. The Ld. CIT(A) has erred in law and in facts in confirming the action of the assessing officer in rejecting the books of accounts and making addition on estimation basis.

4. The Ld. ClT(A) has erred in law and in facts in confirming the disallowanceof alleged bogus purchases of Rs.14,01,716/- being 12.50% of Rs. 1,12,13,732/- in the hands of the appellant.

2.1 We have carefully considered the rival submissions and material on record.Facts as emanating from the record are that the assessee being resident individual statedto be engaged in trading of ferrous and non-ferrous metal was subjected to an assessment u/s 143(3) r.w.s. 147 on 20/03/2015 wherein the returnedincome of Rs.1.91Lacs was assessed at Rs.15.94 Lacs after estimated KhimchandOkchand. Bhansali Assessment Year-2009-10 addition @12.5% on certain alleged bogus purchases.The original return of income was filed by the assessee on 22/09/2009 which was processed u/s 143(1). 2.2 Pursuant to receipt of certain information from DGIT (Inv.) / Sales Tax Department, Govt. of Maharashtra, it transpired that the assessee obtained bogus purchases bills aggregating to Rs.112.13 Lacs from as many as 11entities, the details of which have already been extracted in para-2 of the quantum assessment order. Accordingly, the case was reopened as per due process of law vide issuance of notice u/s 148 on 19/02/2014 which was followed by statutory notices u/s 143(2) and 142(1) wherein the assessee was directed to substantiate the purchase transactions. 2.3 Although the assessee defended the purchases by furnishing purchase invoices, bank statements evidencing payment through banking channels, quantitative details etc. but failed to produce any of the suppliers for confirmation of transactions. The assessee also failed to furnish delivery challans, transport receipts, octroi receipts etc. to substantiate the delivery of material. Accordingly, a view was taken that the purchases were inflated to suppress the true profits. Finally, Ld. AO estimated an addition of 12.5% against these purchases following the decision ofHon’ble Gujarat High court in CIT V/s Simit P. Sheth 356 ITR 451and completed the assessment. 2.4 Although the assessee preferred furtherappeal but as is evident from para-4 of the impugned order, it failed to make effective representation before Ld. CIT(A). Resultantly, the KhimchandOkchand. Bhansali Assessment Year-2009-10 assessment was confirmed. The legal objection taken by the assessee against reopening the assessment was also dismissed. Aggrieved the assessee is in furtherappeal before us.