SHRI. PANKAJ KAPURCHAND SANGHAVI,MUMBAI vs. ITO 17(2)(5), MUMBAI

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-58, Mumbai (in short ‘the CIT(A) ) dated 30/11/2018 for the assessment year 2009-10.

Notice of the appeal was sent to the assessee through RPAD. The acknowledgment of the notice available on record shows that the notice was served on the assessee on 12/12/2019. Despite service of notice, none appeared on behalf of the assessee, nor any request for adjournment has been received. It appears that the assessee is not keen to pursue his appeal. Therefore, the appeal is take up adjudication with the assistance of ld.Departmental Representative and the material available on record.

The assessee is engaged in trading of hardware goods. The assessee filed his return of income for the impugned assessment year declaring total income of Rs.4,89,920/-. On the basis of information received from Investigation Wing of the Department, the Assessing Officer reopened the assessment on the ground that assessee has obtained bogus purchase bills to the tune of 35,18,648/- from hawala dealers. The Assessing Officer after examining the documents and submissions of the assessee estimated GP @ 16.41% as against the GP of 10.10% declared by the assessee in the impugned assessment year. Aggrieved, against the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 ( in short ‘the Act’) assessee filed appeal before the CIT(A). The CIT(A) after examining the facts restricted the disallowance of bogus purchases to 8.5%. Still aggrieved, the assessee is in second appeal before the Tribunal.

Shri R. Bhoopathi, representing the Department vehemently defended the impugned order. The ld.Departmental Representative submitted that the assessee had made bogus purchases from the declared hawala dealers. The Assessing Officer was quite considerate in estimating GP by taking average of the three assessment years including the assessment year under appeal and two preceding assessment years. However, the CIT(A) further reduced it to 8.5%.

I have heard the submissions made by ld.Departmental Representative and have examined the material available on record. The assessee is a trader in hardware. The assessee purportedly obtained bogus purchase bills from the hawala dealers. The Assessing Officer made disallowance of alleged bogus purchases by computing average GP of the three assessment years i.e. the assessment year under appeal as well two preceding assessment years. In first appeal the CIT(A) restricted the addition to 8.5% of the alleged bogus purchases. The GP declared by the assessee in the impugned assessment year is 10.10%. I find the order of CIT(A) reasonable and fair and I concur with the same. No further interference in the impugned order is called for. The impugned order is upheld and appeal of the assessee is dismissed.

In the result, appeal of the assessee is dismissed. Order pronounced in the open court on Tuesday the 17th day of March, 2020.