ITO - 28(1)(2), NAVI MUMBAI vs. M/S BMH CONCARE TECHNOLOGY INC, NAVI MUMBAI

Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2009-10 contest the order of Ld. Commissioner of Income- Tax (Appeals)-26, Navi Mumbai [in short referred to as ‘CIT(A)’], Appeal No. CIT-26/IT/231/2015-16 dated 25/02/2019 in restricting certain addition on account of alleged bogus purchases to 12.5% of total bogus purchases of Rs.52,97,038/- M/s. BMH Concare Technology Inc. Assessment Year: 2009-10 2. Although none appeared for assessee during the course of hearing, however, the matter was proceeded with ex-parte qua the assessee since the material on record was quite sufficient for disposal of the appeal. The Ld. DR pleaded for restoration of additions made by Ld. AO.

The material on record would show that the assessee being resident firm is stated to be engaged in the business of manufacturing of conveyer belt. It was assessed for the year under consideration u/s. 143(3) r.w.s. 147 on 09/03/2015 wherein it was saddled with peak addition of Rs.42.53 Lacs on account of alleged bogus purchase. The same stem from information received from Sales Tax Department, Maharashtra wherein it transpired that the assessee made aggregate purchases of Rs.52.97 Lacs from 4 suspicious entities. The details of purchases so made have already been extracted in para-3 of the assessment order. Although the assessee filed copies of bills, ledger account of parties & relevant bank statements to support these transactions, however, notices issued u/s. 133(6) to confirm the transactions remained un-served. The assessee could not produce any of the parties. Therefore, a conclusion was drawn that the assessee was unable to discharge the onus of proving the purchase transactions. The assessee had claimed that the goods were received and corresponding sales were accounted for and there could not be any sales without purchases. Accepting the same, Ld. AO made peak addition of Rs.42.53 Lacs u/s. 69C.

Upon further appeal, Ld. CIT(A), inter-alia, relying upon the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Simit P.

Upon due consideration of factual matrix as enumerated in preceding paragraphs, we find no reason to interfere with the order of Ld. first Appellate Authority. Evidently, the assessee was in possession of primary purchase documents and corresponding sales formed part of books of account. At the same time, notices issued u/s. 133(6) remained unserved and assessee failed to produce even a single party. Truly, there could not be any sale without actual purchase of material and therefore a presumption could be drawn that the material was purchased from the open market while invoices were procured from tainted suppliers. Therefore, estimating the additions @12.5% was quite fair and reasonable. Therefore finding no substance in the appeal, we dismiss the same.

The appeal stands dismissed. Order pronounced on 10th November, 2020.