RAMESH SAWANTMAL BHANSALI,MUMBAI vs. INCOME TAX OFFICER 19(3)(1), MUMBAI

आयकरअपील सं./ (िनधा"रण वष" / Assessment Year:2010-11) Ramesh Sawantmal Bhansali Income Tax Officer,19(3)(1) C/o, D.C. Bothra & Co. LLP (CA) Mumbai. (formerly known as D.C. Bothra & Co.) बनाम/ 297, Tardeo Road, Wille Mansion Vs. 1st Floor, Opp. Bank of India Nana Chowk Mumbai-400 007. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AEMPB 0518 A (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant by : Shri Rajkumar Singh ""थ"कीओरसे/Respondent by : Shri Chaitanya Anjaria-DR सुनवाईकीतारीख/ : 20/08/2019 Date of Hearing घोषणाकीतारीख / : 5/11/19 Date of Pronouncement आदेश / O R D E R Shamim Yahya (Accountant Member):-

1. 1. This is an appeal by the assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 12.5% disallowance on account of bogus purchases, vide order dated 13/04/2018 pertaining to assessment year 2010-11. 2 Ramesh Sawantmal Bhansali Assessment Year-2010-11 2. Brief facts of the case are that assessee in this case is engaged in the business of trading in ferrous & non-ferrous metal.

3. The assessment in this case was re-opened upon receipt of information from sales tax Department that assessee has made bogus purchases. The assessee submitted the purchase vouchers and the payments were made through banking channel. However, the suppliers were not produced before the Assessing Officer. Sales in this case were not doubted.

4. The Income tax Officer in this case has made 25% addition on account of bogus purchase resulting in disallowance of Rs.76,12,297/-. Upon assessee’s appeal Ld. CIT(A) restricted the same to 12.5%.

5. Against the above order assessee is in appeal before the ITAT. I have heard both the counsel and perused the records.

6. Upon careful consideration I find that the assessee has provided the documentary evidence for the purchase. Adverse inference has been drawn due to the inability of the assessee to produce the suppliers. I find that in this case the sales have not been doubted. It is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from Hon'ble Jurisdictional High Court decision in the case of Nikunj Eximp enterprises (in Writ Petition No.2860 order dated 18/06/2014). In this case the Hon'ble High Court has upheld hundred percent allowance for the purchases said to be bogus when sales