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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM Shri Bipin Umakant Joshi
आदेश / O R D E R PER R.C.SHARMA (A.M):
This is an appeal filed by the assessee against the order of CIT(A)- 41, Mumbai dated 02/06/2017 for A.Y.2009-10 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act. 2. Following grounds have been taken by the assessee:-
1. The Ld.CIT(A)-41 erred in not treating the notice issued by the Ld. AO u/s 148 as bad in law and invalid.
2. The Ld. CIT(A)-41 erred in not treating the reassessment proceedings as invalid and bad in law.
3. The Ld. CIT(A)-41 erred in restricting the additions made by the Ld. AO to Rs. 2,78,747/- being 30% of total alleged non-genuine purchases of Rs. 9,29,156/- in spite of the fact that the appellant has established that the total purchases made of Rs. 9,29,1567-were genuine purchases.
4. The Ld. CIT(A)-41 erred in not deleting the additions made by the Ld. AO of Rs. 63,131/- for ad-hoc disallowances being 15% of the Shri Bipin Umakant Joshi expense, in spite of the fact that all the expenses are incurred for business purpose.
5. The Ld. CIT(A)-41 erred in not deleting the additions made by the Ld. AO of Rs. 1,04,088/- on account of lower amount drawings and ignored the details of total drawings submitted for all family members. The assessee craves leave to add, amend, alter, delete any ground of appeal.
Rival contentions have been heard and record perused.
During the course of assessment proceedings, the AO was in receipt of information from DGIT(Inv.),Mumbai regarding suspicious parties and the assessee being one of the beneficiaries of bogus purchase and has acquired accommodation entries of bogus purchase bills from five parties namely M/s Bright Corporation Rs.4,02,555/-, M/s Bhavani Trade Link Rs.4,85,175/-, Tradelink Distributors Pvt.Ltd, Rs.20,872/-, S.M. Trading co. Rs.11,204/- and M/s Pravesh Enterprises Rs.9,350/-total amounting to Rs.9,29,156/-. Therefore, the case was reopened. 5. Based on the above facts, the AO treated Rs.9,29,156/- as bogus purchases and added the same to the total income of the assessee. 6. By the impugned order, CIT(A) restricted the addition to the extent of 30% by observing that corresponding sales made by the assessee has not been disputed. Assessee is in further appeal before me. 7. I have considered rival contentions and carefully gone through the orders of the authorities below and found from record that assessee is a dealer in tools alloy steel. During the year under consideration, on the basis of information from Sales Tax Department, AO has made addition in respect of suspicion suppliers, which was restricted by CIT(A) to the Shri Bipin Umakant Joshi extent of 30%. Assessee had shown GP of 5.66% during the year under consideration. Before the AO, assessee has filed quantitative details of purchases and sales, confirmation of the suppliers. Keeping in view totality of facts and circumstances of the case, vis-à-vis, GP disclosed by assessee, I do not find any merit for further addition of 30%. I direct to restrict addition to the extent of 2% of the bogus purchases. I direct accordingly. AO has also made adhoc disallowance of 15% in respect of all the expenditure incurred during the year. I found that nowhere AO has pointed out any expenditure having been incurred without supporting bills, vouchers. Keeping in view personal element of the expenditure, I direct AO to restrict the disallowance to the extent of 5% of the expenditure of Rs.35,420/- incurred on telephone expenses and 5% on the conveyance expenses of Rs.25,520/- so incurred by the assessee. Accordingly total disallowance is restricted to Rs.3047/- which is 5% of 60,940/- (Rs.35,420/- + Rs.25,520/-). I direct accordingly. 8. In the result, appeal of assessee is allowed in part.