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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI D.T. GARASIA, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeal by revenue for Assessment Year [AY] 2010- 11 assails the order of the Ld. Commissioner of Income-Tax (Appeals)- 24 [CIT(A)], Mumbai, Appeal No. CIT(A)-22/DCIT-10(3)/IT-176/14-15 ITA.No.3309/Mum/2016 Alan Electronic Systems Private Limited Assessment Year-2010-11 dated 05/02/2016. The assessment for impugned AY was framed by Ld. Deputy Commissioner Of Income Tax-10(3), Mumbai [AO] u/s 143(3) read with Section 147 of the Income Tax Act,1961 on 30/06/2014. The revenue is aggrieved by relief provided to assessee by Ld. CIT(A) on account of certain bogus purchases. The effective grounds read as follows:- 1. “On the facts and circumstances of the cases, the Ld.CIT(A) erred in estimating the profit to the extent of 12.5% of the purchases of Rs.81,23,346/- as the profit element embedded in such purchases in addition to the regular profit without giving any findings as to how 12.5% GP can be taken since the corresponding expenditures have already been claimed in the P&L account and further erred in ignoring the assessee’s object failure to prove the purchases when the onus was cast upon him by the statute.” 2. “On the facts and circumstances of the cases, the Ld. CIT(A) erred in directing to restrict the addition of Rs.81,23,346/- of bogus purchases on the ground that the A.O. had not doubted the consumption/sales of the purchase claimed to have been made from the alleged parties.” 3. “On the facts and circumstances of the cases, the Ld. CIT(A) erred on not appreciating the fact that the assesse had not produced evidences in the shape of stock register during the course of re-assessment proceedings to substantiate its claim that the goods claimed to have been purchased from alleged parties were actually consumed/sold.” 4. “On the facts and circumstances of the cases, the Ld. CIT(A) has decided the issue by relying upon the ratio of case laws M/s.Simit P.Sheth (2013) 18 Taxmann.com 385(Guj) and M/s.Bholanath Polyfab Pvt.Ltd.335 ITR 290 (Guj.) and M/s.Sanket Steel Traders without appreciating the fact that in all the aforesaid cases the assessee had maintained the quantitative records contrary to this in the instant case no such records were produced before the A.O. for examination.”
2.1 Briefly stated, the assessee being resident corporate assessee engaged in the manufacturing of electronic equipments, parts & accessories thereof was subjected to an assessment u/s 143(3) read with Sec. 147 for impugned AY on 30/06/2014 where the income of the assessee was determined at Rs.1,77,67,180/- under normal provisions after addition of Rs.81,23,246/- on account of certain bogus purchases. The original return of income was filed by the assessee on 30/09/2010 ITA.No.3309/Mum/2016 Alan Electronic Systems Private Limited Assessment Year-2010-11 declaring total income of Rs.95,43,140/- which was assessed u/s 143(3) on 19/12/2012 at Rs.96,43,930/-. 2.2 The reassessment proceedings were initiated upon receipt of certain information from Sales Tax Department, Maharashtra regarding dealers indulging in bogus purchases bills and it was noted that the assessee stood beneficiary of such bogus purchase bills to the tune of Rs.81,23,246/- from twenty such parties. Consequently, notice u/s 148 dated 28/03/2014 was issued which was followed by statutory notices u/s 142(1)/143(2). 2.3 The assessee submitted invoices and bank statement evidencing payment to the alleged bogus suppliers and contended that the purchases were genuine and the material was consumed in the manufacturing process. However, Ld. AO noted that the assessee could not prove delivery of material and consumption thereof and therefore, the purchases were not genuine and hence, added the same to the income of the assessee.
Aggrieved, the assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 05/02/2016 where Ld. CIT(A) justifying the reopening placed reliance on several judicial pronouncements and restricted the impugned additions to 12.5% of alleged bogus purchases, being estimated suppressed Gross Profit. Aggrieved, the revenue is in further appeal before us.
The Ld. Representative for assessee [AR], at the outset, drew our attention to the fact that the order of Ld. CIT(A) was combined order for AY 2009-10, 2010-11 & 2011-12 since similar issue of bogus purchases arose in all these years and Ld. CIT(A) in all the three years had ITA.No.3309/Mum/2016 Alan Electronic Systems Private Limited Assessment Year-2010-11 restricted the impugned additions to 12.5% of alleged bogus purchases. Further, the revenue contested the matter for AY 2009-10 & 2011-12 before this Tribunal vide & 3311/M/2016 order dated 15/09/2017 where the stand of Ld. CIT(A) has been upheld and the revenue’s appeal has been dismissed and therefore, the same view may be taken in the present case. The Ld. DR fairly conceded the same. The copy of Tribunal’s order has been placed before us.
Heard and perused the cited order of the Tribunal in assessee’s own case for AY 2009-10 & 2011-12. We find that the impugned order is common order for AY 2009-10, 2010-11 & 2011-12 and Ld. CIT(A) has estimated the additions @ 12.5%. The stand of Ld. CIT(A) for AY 2009- 10 & 2011-12 has been upheld by the Tribunal. Hence, respectfully following the binding precedent, we also confirm the stand of Ld. CIT(A) and dismiss revenue’s appeal.
Resultantly, the revenue’s appeal stands dismissed. Order pronounced in the open court on 01st November, 2017.