MANOHAR P. KANUNGO,MUMBAI vs. ACIT 19(2), MUMBAI

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

This is an appeal filed by assessee against the order of CIT(A)-30, Mumbai dated 10/03/2017 for A.Y. 2009-10 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act. 2. The following grounds have been taken by the assessee:-

1. That the Id. C.I.T.(Appeals) has erred in confirming the adhoc 12.5% addition made by the Id. A.O. amounting to Rs. 8,86,6157- of the alleged hawala purchases amounting to Rs. 70,92,9147- giving false reasons in para 6.4 of his appellate order that appellant has failed to reconcile 1:1 alleged purchases with the sales made and wrongly stating that A.O. has given a finding that stock is not maintained in proper form which are contrary to A.O.'s own finding recorded in para 3.12 of the impugned assessment order.

2. That the Id. C.I.T. (Appeals) while confirming the alleged adhoc 12.5% addition of the subject purchases has also failed in not appreciating that on corresponding sales made out of such alleged Shri Manohar P Kanungo purchases assessee has already recorded and declared gross profit rate of 11.33%, therefore no adhoc addition as made by the Id. A.O. was warranted at all. In view of the above addition made @ 12.5% of the disputed purchases being wrong on facts and bad in law therefore same may kindly be deleted. That the appellant craves the leave to amend, alter, substitute and or to raise new or additional grounds of appeal at the time of hearing.

2. Rival contentions have been heard and record perused.

3. Facts in brief are that the assessee is an individual, engaged in the business of trading in ferrous and non-ferrous and basic metals’, filed its return of income for the assessment year 2009-10, on 26-09-2009, declaring total income of Rs.38,43,213/-. The return was processed u/s 143(1) of the Act. Subsequently, information received from the DGIT(Inv.), Mumbai, that there was a scam unearthed by the Sales Tax Department regarding issue of hawala bills and accommodation entries issued by several parties in Mumbai, availed by assessees to inflate their purchases or expenses and thereby reducing their tax liabilities. As per the information, the assessee also indulged in bogus purchases from two parties, to the tune of Rs.70,92,914/-. Assessment was reopened by issuing notice u/s 148 of the Act on 18-03-2014 and finalized u/s 143(3) r.w.s 147 of the Act 25-03-2015, assessing the total income at Rs.47,29,830/-.

4. During the course of reopened assessment proceedings, to ascertain the genuineness of purchases shown in the accounts,