PARAG ANIL PHIRKE,THANE vs. ITO WD 2(3), KALYAN

The Ld. CIT (A) has completed the assessment without considering the facts & circumstances of the case, which is contrary to Law and is against the principles of natural justice. , 4047/Mum/2017 Shri Parag Anil Phirke 2. a. The Ld. CIT (A) has erred in facts and in law by disallowing a sum of Rs. 2,18,185/-, being 25% of the alleged bogus purchases (of Rs. 8,72,7407-), as inflated purchases made from unverifiable parties, which is without any basis as such. b. The Ld. CIT (A) has erred in ignoring various documentary evidences submitted in support of the genuine purchases made by the appellant firm. c. The Ld. CIT (A) ought to have considered that the Ld. AO has neither afforded any opportunity of cross examination nor has made any efforts to conduct independent enquiries. d. The Ld. CIT (A) ought to have considered that the appellant is not responsible if the notices which were issued to the corresponding parties were returned unserved. The appellant has no control over the response given by the parties. e. The Ld CIT (A) ought to have appreciated that mere payment of the VAT liability by the appellant on behalf of the Hawala parties doesn't justify the allegation that the appellant was involved in bogus transactions.

Nobody appeared on behalf of assessee inspite of giving opportunity, bench therefore decided to dispose the appeal after hearing learned DR and considering the material placed on record.

I have gone through the order of the authorities below for the A.Y.2009-10 and found that the assessee is engaged in the business of manufacturing of hospital furniture. The assessment was reopened on the basis of information received from the Sales Tax Department that the parties M/s. Navdeep Trading Corporation and M/s, Shubh Labh Metal and Alloy from whom the assessee had made 4047/Mum/2017 Shri Parag Anil Phirke purchases were involved in providing accommodation entries and the appellant was one of the beneficiaries. To verify the genuineness of the above parties, the AO issued notice u/s 133(6), but it was returned unserved with the remark 'not known'. Further, the assessee failed to produce the parties for cross examination. Therefore, the AO added back purchases of Rs,8,72,740/- to the income of the assessee as bogus purchases. 5. By the impugned order, CIT(A) confirmed the disallowance to the extent of 25% of the alleged bogus purchases, against which assessee is in further appeal before us. 6. I have considered carefully the contention of learned DR and gone through the orders of the authorities below. 7. From the finding of CIT(A) it can be concluded that, it is a case where the goods were received from the parties other than the persons who had issued the bills of such goods. Though the purchases were shown to have been made by making payment to Hawala dealers but goods must have come from grey market, therefore, under such circumstances, the chances of purchase cost being inflated could not be ruled out. 8. I found that assessee is engaged in the business of hospital furniture. Keeping in view the rate of GP shown by the assessee, the estimation of extra profit at 10% on such alleged purchases will serve the purpose of justice. Accordingly, I modify the order of both the lower authorities and direct the AO to restrict the addition to the extent of 10% of the bogus purchases. I direct accordingly.