SUNIL GREAT (HYK) PROCESSORS P.LTD,BHIWANDI vs. INCOME TAX OFFICER, WARD-1(4), KALYAN

This is an appeal filed by assessee against the order of CIT(A)-2, Thane dated 31/07/2017 for A.Y.2009-10 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act.

In this appeal, assessee is aggrieved by the action of CIT(A) for upholding addition of 42.15% of the alleged bogus purchases.

Rival contentions have been heard and record perused.

Briefly stated facts of the case are that in this case the return of income, declaring total income at Rs 9,88,640/-, was filed on 29/09/2009. Subsequently information was received from the Sales Tax Department, that the assessee was one of the beneficiaries who had obtained bogus M/s. Sunil Great (HYK) Processors Pvt. Ltd., purchase bills from the alleged hawala dealers. In view of the above information the case of the assessee was re-opened, after recording necessary reasons/satisfaction, by issue of notice u/s!48 of the Act. The assessee is a company engaged in the business of manufacturing of Drugs and Pharmaceuticals and Fertilizers, Chemicals and Paints. The AO finalized the assessment order u/s. 143(3) r.w.s. 147 of the Act on 27/02/2015, at total income of Rs.26,56,610/- by disallowing Rs.16,67,967/-, on account of alleged bogus purchases.

By the impugned order, CIT(A) confirmed the addition of Rs.7,03,110/- which works out to be 42.15% of alleged bogus purchases. Assessee is in further appeal before us.

I have considered rival contentions and carefully gone through the orders of the authorities below and found from record that on the basis of information from Sales Tax Department, AO reopened the assessment and added the entire amount of such alleged bogus purchases in assessee’s income.

By the impugned order, CIT(A) restricted the addition to Rs.7,03,110/- which works out to be 42.15% of the alleged bogus purchases. From the record I found that corresponding sales made by assessee has not been denied nor use of the material so purchased during manufacturing process was declined. Books of accounts was maintained by the assessee were also not rejected. Following the proposition of law laid down in the judicial pronouncements filed on record