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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
आदेश / O R D E R महावीर ससुंह, न्याययक सदस्य/ PER MAHAVIR SINGH, JM:
This appeal of assessee is arising out of the order of the Commissioner of Income Tax (Appeals)]-2, Thane, [in short CIT(A)], in dated 27.03.2018. The Assessment was framed by the Asst. Commissioner of Income Tax, Circle-3, Thane (in short ACIT/ AO) for the A.Y. 2009-10 vide order dated 27.02.2015, under section 143(3) read with section 147 of the Income-tax Act, 1961 (hereinafter ‘the Act’).
2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the addition of alleged bogus purchases. For this assessee has raised the following three grounds: -
“1. On the facts and circumstances of the case and in law, the Learned CIT(A)-2, Thane erred in confirming the addition of Rs 21,03678/- on account of alleged bogus purchases based on the opinion that the purchases are not genuine as per the suspicious list of Sales Tax Department, in spite of producing sufficient evidences in support of the claim of purchases by the Appellant and only on the ground that the supplier was not produced before the Assessing Officer.
On the facts and circumstances of the case and in law the Learned CIT(A) further failed to appreciate the Appellant had incurred losses during the year more than the alleged bogus purchases and even the carried forward losses of the year were not utilised for set off subsequently, and it lapsed, hence there was absolutely no necessity or any reason for the Appellant to indulge in activity of bogus purchases as alleged by the department.
3. Without prejudice to the above ground on the facts and circumstances of case and in law the Learned CIT(A) further erred in confirming 100% disallowance of purchase Rs. 21,03,678/- as against 25% / 12.5% disallowance of unverifiable purchases as upheld by the various courts and tribunals.”
We have heard rival contentions and gone through the facts and circumstances of the case. We noted that the AO made addition of bogus purchases made by assessee from Mani Bhadra Sales Pvt. Ltd. amounting to ₹ 21,03,678/- for the reason that the department received information from Sales Tax Department of Maharashtra that the assessee is the beneficiary of the bogus bills issued by this party. The AO required the assessee to produce the relevant evidences, the assessee produced ledger account of the party, payment by cheque but no document such as octoroi receipt, transportation details etc. were produced. Therefore, the AO made the entire bogus purchases as bogus and added under section 69C of the Act amounting to ₹ 21,03,678/-. Aggrieved assessee preferred the appeal before CIT(A). The CIT(A) confirmed the addition on the basis that the assessee is unable to prove the consumption of the items because the assessee is a contractor.
Even now before us, the learned Sr. Departmental Representative stated that the assessee is unable to prove the consumption and in case the assessee prove consumption, the matter can be decided by applying the profit rate.
On the other hand, the learned Counsel for the assessee filed copy of consumption register and stock register. When enquired, the learned Counsel for the assessee pointed out that the matter can be restored back to the file of the AO for limited verification whether the assessee has consumed the material purchased from Mani Bhadra Sales Pvt. Ltd. and in that eventuality, the assessee would prove that these material of