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

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ITA 5928/MUM/2017Status: DisposedITAT Mumbai26 April 2018AY 2009-103 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the assessee's sales were not denied, the use of purchased material was not declined, and the books of accounts were not rejected. Therefore, the addition was restricted to 12.5% of the alleged bogus purchases.

What were the facts?

The assessee's assessment was reopened based on information from the Sales Tax Department alleging bogus purchase bills from hawala dealers. The Assessing Officer added the entire amount of alleged bogus purchases, which the CIT(A) restricted to 42.15%.

What were the issues?

The primary issue was the validity of additions made on account of alleged bogus purchases and the extent to which such additions should be sustained when sales and material usage were not disputed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC ”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, AM

For Appellant: Shri Sanjay Parikh
For Respondent: Ms. N. Hemalatha
Hearing: 25/04/2018Pronounced: 26/04/2018

आदेश / O R D E R PER R.C.SHARMA (A.M):

1.

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.

2.

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

3.

Rival contentions have been heard and record perused.

4.

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.

5.

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.

6.

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.

7.

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

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