CONTINUITY PRINTERS,NAVNIDHI INDL ESTATE, SEWREE vs. ACIT 20(1), PIRAMAL CHAMBERS, LALBAUG

Brief facts of the case are that the assessment was completed under section 148on the basis ofinformation received from the DGIT(Inv) related to bogus purchase from the different parties which amount to Rs.22,20,594/-. The ld.AO made the addition of disputed purchases with the total income of the assessee U/s 69C of the Act. The aggrieved assessee filed an appeal before the ld. CIT(A).Ld.CIT(A) passed the appeal order andrejected the appeal of the assessee. Being aggrieved on the appeal order, the assessee filed an appeal before us.

The ld. AR vehemently argued and prayed for restrict the addition @12.5% of the bogus purchase determined by the ld. AO. The ld. AR furter argued that the transactions with the purchasers are through banking channel, the invoice and road challans are duly filed before the revenue authority as proof of genuineness of the transaction. But the ld. AO only relied on the information of the MaharastraVAT department and added back the entire disputed purchase amount u/s 69C of the Act. The ld. AR has drawn our attention on the relevant paragraph of assessment order which is reproduced below: - …………………..B……………….. 5. The ld. DR vehemently argued and placed that 12.5% of the disputed purchase amount to Rs.22,20,594/- is unjustified and prayed for upheld the addition. The ld. DR relied on the appeal order. The relevant paragraphs are reproduced as below: - …………………..A……………… Continuity Printers We heard the rival contentions and considered the documents available on 6. record. The issue related to addition of @12.5% of the disputed purchases is already decided by this bench in other cases. Considering the binding precedence, we set aside the appeal order. On the other hand, the sales were also executed depending on the purchases of materials. In the transaction, the purchases and sales are interlinked during this impugned financial year. We respectfully relied on the order of Hon’ble Bombay High Court in case of PCIT vs S.V. Jiwani (2022) 145 taxmann.com 230 (Bom) wherein involving similar set of facts and circumstances of the case, the Hon’ble jurisdictional High Court has upheld the decision of the Hon’ble ITAT, Mumbai Bench that addition to the extent of @12.5% of the bogus purchases is fair and reasonable. The Ld. Assessing Officer had not rejected the sale of assesseebut only the purchase. Hence, the addition amount of Rs. 22,20,594/- is quashed. We direct the ld. AO to restrict the addition @12.5% on bogus purchase amount to Rs. 22,20,594/- which works out to Rs. 277,574/-. The addition is restricted amount to Rs. 2777,574/-. The appeal of the assessee is considered on merit&Ground no-4 is allowed. So, the other groundsremain only for academic purpose.

In the result, appeal in the assessee is allowed.