ITO - 12 (1)(2), MUMBAI vs. ANMOL TOYS PVT. LTD., MUMBAI

Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2010-11 contest the order of Ld. Commissioner of Income- Tax (Appeals)-20, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-20/IT-10139/17-18 dated 08/06/2018. It is evident from grounds

We have carefully heard the rival submissions, perused relevant material on record and deliberated on arguments advanced before us.

1 Facts on record would reveal that the assessee being resident corporate assessee stated to be engaged in manufacturing of plastic guns and toys, was assessed for impugned AY u/s. 143(3) r.w.s. 147 on 27/11/2017 wherein the income of the assessee was determined at Rs.14.67 Lacs after sole addition of alleged bogus purchases for Rs.3.20 Lacs as against returned income of Rs.11.46 Lacs filed by the assessee on 26/09/2010 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.12.83 Lacs from 5 entities, the details of which have already been extracted in para-3 of the quantum assessment order. Accordingly, the case was reopened as per due process of law vide issuance of notice u/s 148 on 22/03/2017 which was followed by statutory notices u/s 143(2) & 142(1) wherein the assessee was directed to substantiate the purchase transactions.

3 The assessee defended the purchases by filing copies of purchase bills, ledger extracts, bank statements evidencing payments through banking channels. However, the assessee expressed inability to produce any of the supplier to confirm the transactions. The notices issued u/s 133(6) to confirm the transactions, did not elicit satisfactory response. The factual matrix led Ld. AO to disbelieve the said transactions and 3 M/s. Anmol Toys P.Ltd. Assessment Year :2010-11 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 12.5%. 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 miserably failed to substantiate the delivery of material and also 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 fact that the assessee was engaged in manufacturing and dealing in plastic items, the estimation of 12.5% 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 02nd December, 2019. (C.N. Prasad) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member मुंबई Mumbai; िदनांक Dated : 02/12/2019 Sr.PS, Jaisy Varghese