ZENITH CONSTRUCTION CO.,,PANVEL vs. DEPUTY COMMISSIONER OF INCOME-TAX,,

The assessee has raised the following grounds of appeal:- 1. The learned CIT (A) erred on facts and in law in upholding the decision of the AO for reopening the assessment u/s 148 of the Act without any proper reasons and/or without having additional cogent evidence on records. 2. The learned CIT (A) erred on facts and in law in upholding addition of Rs.3,52,993 on account of alleged bogus purchases by the assessee. The learned CIT (A) failed to appreciate the facts and evidences submitted before the learned AO as well as learned CIT (A). The learned CIT (A) further erred in upholding rejection of books of accounts and treating genuine transactions as hawala transactions. 3. The learned CIT (A) erred on facts and in law in upholding addition of Rs.3,52,933 sustained based on amounts calculated by considering the Gross Profit ratio of AY 2008-09 as against estimated gross profit thereon for the current assessment year.

The issue in ground of appeal No.1 raised by the assessee is against reopening of assessment under section 148 of the Act is not pressed and hence, the same is dismissed as not pressed.

The issue in ground of appeal No.2 raised by the assessee is against disallowance of bogus purchases at ₹ 3,52,993/-.

Briefly, in the facts of the case, the assessee was engaged in civil construction. The Assessing Officer received information from the Sales Tax Department, Maharashtra that the assessee had made purchases from the persons against whom information had been collected by the Sales Tax Department for alleged non-payment of VAT. As per information received, the assessee had made purchases of ₹ 4,888/- from Maruti Steel Traders and ₹ 3,48,405/- from Rohit Enterprises, totaling ₹ 3,52,993/-. The Assessing Officer confronted the assessee in respect of said information. The assessee failed to produce any evidence to show that the purchases made from alleged parties were genuine. No delivery slips, transport receipts, octroi receipts, etc. were

Before the CIT(A), the learned Authorized Representative for the assessee contended that transactions were supported by proper documentary evidence and the payments to said parties against purchases were through banking channels. Further, the assessee pointed out that it had paid VAT to the credit of State Government against alleged hawala purchases. The CIT(A) noted that the assessee had not furnished requisite details to establish the genuineness of said purchases. In view thereof, the order of Assessing Officer was upheld by the CIT(A), in turn, relying on series of decisions.

The assessee is in appeal against the order of CIT(A).

The learned Authorized Representative for the assessee pointed out that total turnover of assessee for the year was ₹ 3.38 crores, against which purchases made from alleged hawala parties were very meager and there is no merit in the aforesaid addition.

The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below.

On perusal of record and after hearing both the learned Authorized Representatives, the issue which arises in the present appeal is against the addition made on account of bogus purchases made from alleged defaulters of VAT. The said information was collected by the Sales Tax Department and was given to the Assessing Officer, who in turn, reopened the assessment under section 148 of the Act and asked the assessee to justify the purchases made from said bogus dealers. The assessee besides stating that it had consumed the goods purchased from the said parties in his business of civil construction, had not placed on record any trail of goods. Further contention of assessee was that the payment had been made to the said parties through banking channels, but the same cannot be basis for allowing purchases as genuine in the hands of assessee, in view of information collected by the Sales Tax Department. Accordingly, there is no merit in the plea of assessee and hence addition of ₹ 352,993/- is upheld in the hands of assessee. In this regard, reliance is placed on the ratio laid down by the Pune Bench of Tribunal in bunch of appeals with lead order in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT in ITA No.795/PUN/2014, relating to assessment year 2010-11, order dated 28.04.2017. Upholding the order of CIT(A), grounds of appeal raised by the assessee are dismissed.

In the result, appeal of assessee is dismissed.