ITO-27(2)(1), MUMBAI vs. SHRI. KANHAIYALAL S JAIN, 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 Kanhaiyalal S. Jain learned Departmental Representative and on the basis of material on record.

The issue raised in the present appeal relates to partial relief granted bythe learned Commissioner (Appeals) in the matter of addition made on account of non–genuine purchases.

Brief facts are, the assessee is an individual and deals in gold and silver ornaments. For the assessment year under dispute, the assessee filed his return of income in the regular course on 18th September 2009, declaring total income of `6,68,294. Subsequently, on the basis of information received from the Sales Tax authorities through 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 `15,97,307, claimed to have been made from two parties during the year. 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 certain information. However, all such notices returned back unserved. Even, the Assessing

After considering the submissions of the assessee in the context of facts and material on record, 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 Assessing Officer was justified in making the disallowance at 30%.

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 sales effected by the assessee. Therefore, it goes to prove that the assessee must have purchased goods from some other

In the result, Revenue’s appeal stands dismissed. Order pronounced through circulation in notice board under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963.