ITO 28(1)(1), MUMBAI vs. ANIL NARAYAN LOKRE (PROP. ANIL TRADING CO.), 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, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-26/IT/232/2015-16 dated 14/08/2018. It is evident from grounds

None has appeared for assessee and no valid adjournment application is on record. Left with no option, the matter is proceeded with ex-parte qua the assessee on the basis of material on record and after hearing learned departmental representative, who supported the order of Ld. AO.

1 Facts on record would reveal that the assessee being resident individual stated to be engaged in manufacturing of transformers under proprietorship concern namely Anil Trading Co., was assessed for impugned AY u/s. 143(3) r.w.s. 147 on 03/03/2015 wherein the income of the assessee was determined at Rs.7.55 Lacs after addition of alleged bogus purchases for Rs.2.00 Lacs as against returned income of Rs.4.90 Lacs filed by the assessee on 29/09/2009 which was processed u/s.143(1).

2 Pursuant to receipt of certain information from DGIT (investigation), Mumbai, it transpired that the assessee obtained bogus purchases bills aggregating to Rs.8.01 Lacs from 3 entities, the details of which have already been extracted at page-1 of the quantum assessment order. Accordingly, the case was reopened as per due process of law vide issuance of notice u/s 148 on 25/03/2014 which was followed by statutory notices u/s 143(2) & 142(1) wherein the assessee was directed to substantiate the purchase transactions.

3 Although the assessee defended the purchases by filing various documentary evidences, but notices issued u/s 133(6) to confirm the transactions, did not elicit satisfactory response. The assessee failed to 3 Anil Narayan Lokre Assessment Year :2009-10 produce any of the suppliers to confirm the transactions. The factual matrix led Ld. AO to disbelieve the said transactions and accordingly, the assessee was saddled with estimated additions to the extent of 25% of these purchases.

Upon further appeal, learned first appellate authority, finding the estimation of 25% to be on the higher side, reduced the estimation to 15%. Aggrieved, the revenue is under further appeal before us.

After careful consideration, we are of the considered opinion that there could be no sale without actual purchase of material keeping in view the assessee’s nature of business. Undisputedly the assessee was in possession of primary purchase documents and the payments to the suppliers were through banking channels. However, at the same time, the assessee failed to produce any of the suppliers to confirm the transactions. The onus casted upon assessee, in this regard, remained undischarged. Therefore, the said factual matrix was a fit case for estimation of income against suspicious purchases made by the assessee. Keeping in view the assessee’s nature of business, the estimation of 15% as made by Ld. CIT(A) could not be said to be unreasonable from any angle. Therefore, by confirming the same, we dismiss the appeal.

Resultantly, the appeal stands dismissed. Order pronounced in the open court on 03rd December, 2019. (C.N. Prasad) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member