ITO,WARD- 2 (3), THANE vs. ASIFA IRFAN DHOLE, MUMBAI

Shri R. Bhoopati representing the department submitted that information was received from Sales Tax Department, Maharashtra that the assessee in connivance with hawala dealers has obtained bogus purchases bills. The assessment for assessment year 2010-11 was reopened. The Assessing Officer vide order dated 17/03/2018 passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short ‘ the Act’), held that the assessee has obtained bogus purchases bills aggregating to Rs.8,96,792/- from M/s. Mona Enterprises. Consequently, the Assessing Officer made addition of the aforesaid amount. In first appellate proceedings, the CIT(A) restricted the disallowance to 25% of the bogus purchases. The ld. Departmental Representative submitted that the assessee could not prove genuineness of the purchase transactions either during assessment proceedings order in the first appellate proceedings. Hence, the addition made by Assessing Officer is justified. The ld. Departmental Representative prayed for reversing the finding of CIT(A) and upholding the assessment order.

I have heard the submissions made by ld. Departmental Representative and have perused the orders of authorities below. The Assessing Officer made addition of Rs.8,96,792/- on account of bogus purchases. It was alleged that the assessee has obtained bogus purchases bills from M/s Mona Enterprises during the period relevant to the assessment year under appeal for an amount of Rs.8,96,792/-. It is an undisputed fact that the sales made by assessee have not been disputed by the Assessing Officer. Without purchases there cannot be sales. Hence, the entire alleged bogus purchases cannot be added back. The CIT(A) in first appellate proceedings has restricted the addition to 25% of alleged bogus purchases. The same has been accepted by assessee. Taking into consideration entirety of facts and the material available on record, I am of considered view that the order of CIT(A) is fair and justified. Hence, warrants no interference. The same is upheld and the appeal of the Revenue is dismissed being devoid of merit.

In the result, appeal of the Revenue is dismissed.