ITO 19 (1)(2), MUMBAI vs. ASHURAM UDARAMJI BISHNOI, MUMBAI

The notice of the appeal was sent to the assessee/respondent through RPAD. None appeared to represent the assessee. Hence, these appeals are taken up for hearing with the assistance of ld. Departmental Representative and the material available on record.

For the sake of convenience to decide these appeals, the facts are extracted from 2010-11. The assessee is a trader in ferrous and non-ferrous metal. The Assessing Officer received information from Sales Tax Department , Maharashtra and DGIT(Inv) that the assessee has indulged in obtaining bogus purchases bills from hawala dealers. Consequently, assessments for assessment year 2009-10, 2010-11 and 2011-12 were reopened. The Assessing Officer in reassessment proceedings for assessment years 2010-11 held that the assessee has made bogus purchases to the tune of Rs.84,29,433/- from various parties. The Assessing Officer made addition of Rs.10,53,679/- i.e. 12.5% of unproved purchases. Aggrieved against the assessment order dated 05/11/2016 passed under section 143(3) r.ws. 147 of the Income Tax Act, 1961 (in short ‘ the Act’), the assessee filed an appeal before the CIT(A). The first appellate authority partially modified the assessment order and directed the Assessing Officer to reduce gross profit already declared by the assessee from the estimated addition of 12.5%. The Revenue did not find favour with the view of first appellate authority. Hence, the present appeal by the Department.

Shri R.Bhoopati representing the Department vehemently defended the assessment order and submitted that the Assessing Officer had (A.Y.2010-11) ITA NO. 6977/MUM/2018(A.Y.2011-12) ITA NO. 6978/MUM/2018(A.Y.2009-10) estimated gross profit at 12.5% of the bogus purchases by following the decision of Hon'ble Gujarat High Court rendered in the case of CIT vs. Simith P. Sheth, in Income Tax Appeal No.553 of 2012 decided on 16/01/2013. Once the addition has been estimated by following the order of Hon'ble High Court, no further modification was required to be made by the CIT(A). The ld. Departmental Representative further submitted that the assessee failed to substantiate genuineness of the purchases and parties from whom suspicious purchases were made. The ld. Departmental Representative prayed for reversing the findings of CIT(A) and to uphold the assessment order.

I have heard the submissions made by ld. Departmental Representative and have examined the material available on record. The addition on account of bogus purchases have been made by Assessing Officer by estimating gross profit @ 12.5% of alleged bogus purchases . In the first appellate proceedings, the CIT(A) has reduced 12.5% G.P estimated by Assessing Officer by the gross profit already declared by the assessee. Taking into consideration, entirety of facts, I find no reason to interfere with the findings of CIT(A). The order of first appellate authority is reasonable and the same is upheld. The appeal of the Revenue is without any merit and, hence, the same is dismissed. (A.Y.2011-12 & 6978/MUM/2018(A.Y.2009- 10):

The ld. Departmental Representative stated at the Bar that the facts in assessment year 2011-12 and 2009-10 are similar to the facts in assessment year 2010-11. The addition has been made by Assessing

On same set of facts I have dismissed the appeal of Revenue in 2010-11. The findings given therein would mutatis mutandis apply to both these appeals by the Revenue. Accordingly, the appeals of the Revenue for assessment years 2011-12 and 2009-10 are dismissed sans merit.

To sum up, all the three appeals of the Revenue are dismissed.