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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai
Before: Shri Shamim Yahya (AM)
This appeal by the assessee is directed against orders of learned CIT-A dated 2.4.2018 and pertains to assessment year 2011-12.
The first issue raised pertains to confirmation of disallowance of bogus purchase at Rs. 4,70,329/-.
The second issue raised is to confirmation of disallowance on account of cas expenses application of the provision of section 40A(3) at Rs 1,00,765/-
Brief facts of the case are that assessee is engaged in the business of construction. Pursuant to receipt of information that assessee has indulged in bogus purchases amounting to Rs. 4,70,329/-. The addition was made to the extent of hundred percent of the bogus purchase. The learned CIT-A also confirmed the same on a finding that assessee did not produce even the vouchers. Learned CIT-A noted that assessee has only produced the ledger account of purchases. As regards the disallowance of expenditure in cash
2 Baban Piraji Ghadge exceeding Rs. 20,000/-, the assessing officer noted that assessee's counsel had agreed for the same. Learned CIT-A also confirmed the same.
This order has been challenged before the ITAT. I have heard both the counsel and perused the records. As regards the disallowance under section 40A(3). I note that it is the contention of the assessee that all the cash payments exceeding Rs. 20,000 in cash were falling under the exception provided under the act. Hence it is pleaded that no disallowance in this regard should be done. I note that authorities below have noted that assessee's representative has agreed for the disallowance. However I find that this issue is a mixed question of law and fact. Honourable Supreme Court had held that concession on mixed question of law and fact doesn't preclude the aggrieved party in challenging the same. Accordingly in the interest of justice I remit this issue the file of assessing officer. The assessing officer is directed to consider the issue afresh after giving the assessee proper7 opportunity of being heard.
As regards the disallowance on account of bogus purchase, I note that the same has been done @ 100% of the bogus purchase on the plea that assessee has not been able to substantiate the purchases. I also note that there is no other finding that there is any shortcoming in the other results of the assessee. Hence in the interest of justice I remit this issue also for the assessing officer to examine afresh after giving the assessee proper opportunity of being heard.
In the result appeal by the assessee stands allowed for statistical purposes. Order has been pronounced in the Court on 29.7.2019.