M/S. BHAWARLAL ALOK KUMAR ,KOLKATA vs. ACIT, CIRCLE - 34, KOLKATA , KOLKATA

This appeal preferred by the assessee is against the order of the Ld. CIT(A)-10, Kolkata dated 23.01.2018 for AY 2014-15.

raised by the assessee which is as under:

1. Against sustaining the addition to the extent of Rs.48,34,000/- on account of alleged bogus purchases.” a) For that on facts and circumstances of case and in law, the Ld. Commissioner of Income Tax (Appeals) (CIT(A) erred in sustaining the addition to the extent of Rs.48,34,000/- out of addition of Rs.3,22,28,000/- made by Ld. Assessing Officer on account of alleged bogus purchases. b) For that on facts and circumstances of case and in law, the Ld. CIT(A) erred in observing that purchases have been made by appellant from the alleged grey market from parties other than those mentioned in the books of accounts.”

M/s. Bhawarlal Alok Kumar, AY- 2014-15

2. Revenue’s sole substantive grievance raised in the instant appeal seeks to challenge correctness of CIT(A)’s action partly upholding Assessing Officer’s findings disallowing assessee’s purchase(s) of Rs.3,22,28,000/- only to the extent of 15% vide impugned following detailed discussion.

4. After perusing the order of the Tribunal dated 03.05.2018 in the revenue appeal against the assessee which is against the very same impugned order of the Ld. CIT(A)-10, Kolkata, we note that the revenue had also preferred cross appeal against the action of the Ld. CIT(A) which has been dismissed and thus, the action of the Ld. CIT(A) has been upheld on the very same issue which the assessee has assailed before us. We note that the Tribunal has decided the appeal by observing as under:

“3. Mr. Choudhury vehemently contends during the course of hearing that the CIT(A) has erred in law as well as on facts in partly confirming the Assessing Officer’s action to the extent 15% gross profit element in assessee’s purchases. He reiterates the assessment findings that the assessee could not prove his purchases in issue by way of the relevant supportive evidence during the course of assessment and also that the Assessing Officer could not verify the impugned purchase despite affording ample opportunities to the taxpayer. We find no merit in Revenue’s instant arguments challenges correctness of CIT(A)’s action partly confirming the impugned purchase disallowance to the extent of 15% then in enterity. It has come on record that CIT(A) has disallowed only 15% portion in assessee’s purchases despite the fact the latter had placed on record all the relevant details / evidence in support of its claim right from the very beginning in the nature of suppliers’ PANs, bank accounts, ledgers, assessment records etc. before the Assessing Officer. Coupled with this, the fact also remains that the Revenue itself has accepted the assessees corresponding sales as correct giving rise to its business income in manufacturing / trading activities in issue. We further find that the CIT(A)’s discussion has taken into consideration various corresponding judicial precedents restricting purchase disallowance to the extent profit ratio / reasonable ad hoc figure in the given facts. We conclude in these peculiar facts and circumstances that the CIT(A) has rightly disallowed only the profit @ 15% of the assessee’s purchases than concurring with the Assessing Officer’s action declining entire purchases. This Revenue’s sole grievance fails therefore.”

Order is pronounced in the open court on 6th November, 2019. Sd/- Sd/- (Dr. A. L. Saini) (Aby. T. Varkey) Accountant Member Judicial Member Dated :6th November, 2019 Jd.(Sr.P.S.) M/s. Bhawarlal Alok Kumar, AY- 2014-15 Copy of the order forwarded to: