SAKET INFRAPROJETS LTD,MUMBAI vs. DCIT CEN CIR 6, MUMBAI

Aforesaid appeals by separate assessee contest separate orders of Ld. first appellate authority. Since the facts are similar and both the assessees belong to the same group, we dispose-off the same by way of this common order for the sake of convenience & brevity. ; Shah & Parikh 2. The appeal by concerned assessee for Assessment Year [AY] 2011-12 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-47 [CIT(A)], Mumbai, Appeal No. CIT(A)-36/AP.19/14-15 dated 30/11/2015. The assessment for impugned AY was framed by Ld. Deputy Commissioner of Income Tax Central Circle-5, Mumbai [AO] u/s 143(3) of the Income Tax Act, 1961 on 29/03/2014 wherein the income of the assessee has been assessed at Rs.377.31 Lacs after certain additions as against returned income of Rs.345.29 Lacs filed by the assessee on 29/09/2011. The sole ground raised under the appeal reads as under:- On the facts and in the circumstances of the case and in law the Learned CIT(A) erred in directing that the disallowance of alleged bogus the purchases be retained to the extent of 14.84% i.e. to the extent of GP.

Aggrieved the assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 30/11/2015 wherein the overall estimated addition, in the light of certain judicial pronouncements, has been reduced to 14.84%, being Gross profit Rate reflected by the assessee. Aggrieved the assessee is in further appeal before us.

The Ld. Authorized Representative for Assessee, Shri A.N.Shah, submitted that the impugned additions were still on the higher side keeping in view the assessee’s nature of business. Our attention has been drawn to the fact that an estimated rate of 7% has been applied by Ld. first appellate authority in assessee’s own case for AYs 2009-10 & 2010-11. The copies of the relevant orders have been placed on record. Per Contra, Ld. DR submitted that no further relief could be granted to the assessee.

We have carefully heard the rival contentions and perused relevant material on record. We are of the considered opinion that the assessee was engaged in civil construction which could not be carried out without purchase of material. The sales turnover achieved by the assessee has not been disputed by the revenue and the payments to suppliers were through banking channels. The assessee was in possession of primary purchases documents. At the same time, the survey proceedings casted serious doubts on the purchases transactions being carried out by the assessee. The key personnel, during survey proceedings, admitted discrepancies in the purchase transactions. The notices u/s 133(6) issued to all the suppliers elicited no response and the spot verification revealed that none of the supplier existed at the given address. All these factors cast serious doubts on assessee’s claim. Both the lower authorities, in our opinion, clinched the issue in the proper perspective and proceeded to make estimation against the same. However, keeping in view the overall factual matrix and the nature of assessee’s business, the estimation, in our opinion, was on the higher side. Upon perusal of appellate orders for AYs 2009-10 & 2010-11 in assessee’s own case, we find that the Ld. first appellate authority has adopted a uniform rate of 7% while estimating such additions for all the group concerns. Keeping in view the same, we reduce the estimated additions to 7% of alleged bogus purchases. The impugned order stand modified to that extent. Resultantly, the assessee’s appeal stand partly allowed.