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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, JM & SHRI RAJESH KUMAR, AM
सुनवाई की तायीख /Date of Hearing : 7.8.2017 घोषणा की तायीख /Date of Pronouncement : 3.11.2017 आदेश / O R D E R PER RAJESH KUMAR, A. M: This is an appeal filed by the revenue challenging the order dated 23.5.2016 passed by the Commissioner of Income Tax(A)-21, Mumbai for the assessment year 2013-14, wherein the revenue has challenged the order of ld. CIT(A) restricting the addition to 1% only of the bogus purchases as 2 against the 12.5% as made by the AO and also that the ld.CIT(A) was not justified by relying on the instructions No. 2 of 2008 dated 22.2.2008 which was applicable to the assessment year 2008-09 only.
Facts of the case are that the assessee filed return of income on 25.9.2013 declaring total income of Rs.90,15,840/-. The case was processed under section 143(1) and thereafter the case of the assessee was selected for scrutiny and statutory notices under section 143(2) and 142(1) were issued and served upon the assessee. The assessee is engaged in the business of manufacturing and trading of gold and diamond jewellery. The AO received the information from the DGIT(Inv),Mumbai and Sales Tax Department, Government of Maharashtra that the assessee has availed bogus bills of Rs.5,24,58,930/- from hawala operators i.e Mr. Bhawarlal Jain group of companies. Accordingly, the assessee was asked to substantiate the same. The AO also issued notices u/s 133(6) of the Act to these parties who were duly replied to the notices.. However, the assessee could not produce the parties before the AO for verification. Finally, the AO not being satisfied with the reply of the assessee treated the purchases as non-genuine purchases and added 12.5% of the said purchases to the total income of the assessee by framing assessment u/s 143(3) of the Act assessing the total income at Rs.1,55,73,210/- vide assessment order dated 24.11.2015. Aggrieved by the order of the AO, the assessee appealed before the FAA, 3 who in turn partly allowed the appeal of the assessee sustaining the addition at 1% of the total bogus purchases by relying on the instruction No.2 of 2008 dated 22.2.2008. Aggrieved by the above direction of the ld.CIT(A), the revenue is in appeal before us.