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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI C.N. PRASAD, JM & SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R
Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [AY] 2009-10 contests the order of Ld. Commissioner of Income-Tax (Appeals)-20 [CIT(A)], Mumbai, Appeal No.CIT(A)-20/ACIT-12(1)(1)/IT-145/2014-15 dated 30/12/2015 qua certain relief provided to the assessee on account of alleged bogus purchases. The assessment for impugned AY was framed by Akhtar Hasan Rizvi Assessment Year: 2009-10 Ld. Assistant Commissioner of Income Tax-9(3), Mumbai [AO] u/s 143 read with Section 147 of the Income Tax Act, 1961 on 31/10/2014 wherein the income of the assessee has been assessed at Rs.162 Lacs after certain additions as against returned income of Rs.79.37 Lacs e-filed by the assessee on 30/09/2009 which was processed u/s 143(1). In the quantum assessment, the assessee has suffered sole addition of Rs.82.62 Lacs on account of alleged bogus purchases which is the subject matter of this appeal. It has been noted that the appeal is delayed by 6 days which has not been agitated by Ld. Auhtorized Counsel for Assessee [AR], Shri Vishwas V.Mehendale. Keeping in view the same, we proceed to dispose- off the appeal on merits.
Briefly stated the assessee being resident individual engaged in construction business under proprietorship concern namely Rizvi Builders was subjected to reassessment proceedings for impugned AY pursuant to receipt of certain information from DGIT (Investigation) / Sales Tax Department, Maharashtra regarding dealers being indulging in bogus purchase bills without carrying out any actual business. Pursuant to the said information, it was found that the assessee made certain purchases aggregating to Rs.82,62,499/- from three such suspicious dealers, the details of which have been extracted at para-2 of the quantum assessment order. Consequently notice u/s 148 dated 18/03/2014 was issued to the assessee wherein the assessee was required to substantiate the purchases made by him. The assessee, while defending the purchases made by him, Akhtar Hasan Rizvi Assessment Year: 2009-10 submitted documentary evidences but failed to produce any of the party to confirm the transactions. Notice u/s 133(6) issued by Ld. AO revealed that none of the party was in existence at the given address. Finally, not convinced, Ld. AO made the addition thereof in the hands of the assessee.
Aggrieved, the assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 30/12/2015 wherein the Ld. CIT(A), after considering the factual matrix and placing reliance on certain judicial pronouncements, restricted the impugned additions to Rs.10.32 Lacs, being 12.5% of alleged bogus purchases. Aggrieved, the revenue is in further appeal before us. It has been submitted that the assessee is not in appeal against the order of first appellate authority.
We have heard the rival contentions and perused relevant material on record. We are of the considered opinion that the assessee was engaged in construction activities, which could not be carried out without consumption of actual material. The turnover achieved by the assessee has not been disputed by the revenue and the payments were through banking channels. The assessee was in possession of primary purchase documents. However, at the same time, the assessee failed to produce any of the suppliers to confirm the transactions. Notices issued u/s 133(6) revealed that none of the suppliers was in existence at the given address. All these factors cast a serious doubt on assessee’s claim. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit Akhtar Hasan Rizvi Assessment Year: 2009-10 element earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against alleged bogus purchases, which Ld. CIT(A) has rightly done. Therefore, finding the same in order, we dismiss the revenue’s appeal.
Resultantly, the revenue’s appeal stand dismissed.
Order pronounced in the open court on 10th July, 2018 Sd/- Sd/- (C.N.Prasad) (Manoj Kumar Aggarwal) �ाियकसद� / Judicial Member लेखासद� / Accountant Member मुंबई Mumbai; �दनांक Dated : 10.07.2018 Sr.PS:-Thirumalesh आदेशक���त�ल�पअ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु�त ( अपील ) / The CIT(A) 4. आयकरआयु�त/ CIT– concerned 5. �वभागीय��त�न�ध मुंबई , आयकरअपील�यअ�धकरण , / DR, ITAT, Mumbai 6. गाड�फाईल / Guard File