ITO-19(1)(1), MUMBAI, MUMBAI vs. DIAJEWEL, MUMBAI

Income Tax Officer, Ward 01. 19(1)(1), Mumbai, (the learned Assessing Officer) against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 17th August, 2023, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) read with section 147 of the Income-tax Act, 1961 (the Act) dated 11th December, 2019, was partly allowed.

2. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in applying 3 years Gross Profit @ 16.45% as against the 100% addition made u/s 68 of the Income-Tax Act, 1961, by the Assessing Officer on account of Bogus Purchases of Rs. 4,22,34,640/- without appreciating the fact that during the search operation an statement recorded u/s 132(4) of the Act, of Mr. Ranjendra Jain, wherein has categorically stated that M/s. Mayank Impex, to whom the assessee claimed to have made purchases are managed and controlled by him for providing the accommodation entry only with no real business?

3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) is right in presuming that purchases have been made during the year from the unknown

4. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) was right in in applying 3 years Gross Profit @ 16.45% as against the 100% addition made u/s 68 of the Income-Tax Act, 1961, by the Assessing Officer on account of Bogus Purchases of Rs. 4,22,34,640/-without appreciating the fact the assessee could neither produce the delivery, challans or the transport bills/invoices nor could produce the alleged parties from whom purchases was claimed to have been made during the year?

5. Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in applying 3 years gross profit @ 16.45% as against the 100% addition made u/s 68 of the Income-Tax Act, 1961 on account of Bogus Purchases of Rs. 4,22,34,640/-, without appreciating the ratio in the decision of the Hon'ble Supreme Court in the case of N.K. Protein Ltd. Wherein the court has held that when the purchases are from bogus suppliers. the entire purchases are liable to be disallowed ?

6. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in applying 3 years Gross Profit @ 16.45% as against the 100% addition made by the Assessing Officer on account of Bogus Purchases of Rs. 4,22,34,640/-, without appreciating the fact that in the The brief facts of the case shows that assessee is a partnership firm 03. filed its return of income on 23rd September, 2012, at a total income of ₹8,97,530/-. The case of the assessee was reopened by issue a notice under Section 147 of the Act which culminated into an assessment order under Section 143(3) read with section 147 of the Act on 11th February, 2019, wherein the total income of the assessee is assessed at ₹4,31,32,170/-. The addition of ₹4,22,34,640/-, was made to the total income of the assessee on account of accommodation bills for purchase of ₹4,22,34,640/- allegedly obtained by the assessee from M/s Mayank which is an entity operated by accommodation entry provider Mr. Rajendra Jain group. This is the issue for which the assessment was reopened and consequent addition of bogus purchases at the rate of 100% was made.

The assessee challenged the same before the learned CIT (A), who 04. as per the appellate order dated 17th August, 2023, has partly allowed the appeal of the assessee by determining the amount of profit involved in the bogus purchase to the extent of 60.45% as per average gross profit of last three years of the assessee. Accordingly, addition to the extent of ₹69,47,598/- was confirmed and the balance addition was deleted.

In the result, appeal of the Revenue is dismissed. 07.

Order pronounced in the open court on 21.05. 2024.