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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
आदेश / ORDER
PER SUSHMA CHOWLA, JM:
The appeal filed by assessee is against order of CIT(A)-2, Pune, dated 13.06.2016 relating to assessment year 2009-10 against order passed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (in short ‘the Act’).
The assessee has raised the following grounds of appeal:-
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On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in initiating the reassessment proceedings u/s 147 of the Income Tax Act, 1961 merely on the basis of the action of some other department without appreciating the facts of the case and the belief of escapement is not clearly spelled out in the reason recorded and he has merely proceeded on the belief of another party, which is not in accordance with the principles of reopening u/s 147 of the Income Tax Act, 1961. Therefore the entire action u/s 147 is bad in law. 2. On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in making the addition of Rs.7,55,300/- on account of alleged bogus purchases by completely disregarding the appellant’s contention in this regard.
The assessee is in appeal against initiation of re-assessment proceedings under section 147 of the Act and second issue raised is against addition made on account of alleged bogus purchases of ₹ 7,55,300/-.
Briefly, in the facts of the case, the Assessing Officer had received information from the Sales Tax Department that the assessee was the recipient from hawala transaction parties of ₹ 7,55,300/-. The assessee during the course of assessment proceedings produced copies of purchase bills and also explained that the purchases were genuine. However, the Assessing Officer made addition of ₹ 7,55,300/- on account of purchases made from one party M/s. Shalaka International by two different dates.
The CIT(A) upheld the addition made by Assessing Officer, against which the assessee is in appeal before us.
The learned Authorized Representative for the assessee pointed out that the assessee had maintained complete details which were filed before the Assessing Officer. Our attention was drawn to the copies of bills of said party, which are placed at pages 29 to 32 of Paper Book along with delivery vouchers. He also referred to VAT returns filed, copies of which are placed at pages 33 to 36 of Paper Book and VAT paid challans at pages 37 to 40 of Paper Book. He
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further referred to total purchases during the year which totaled only 12 and sales against the same, which also totaled to 12. He pointed out that against purchases made, goods were sold to one party itself. He further referred to the lorry receipts placed at pages 44 to 56 of Paper Book. Further, he claimed that payments were made through bank and in such circumstances, where the assessee had proved the trail of goods, there was no merit in making any addition in the hands of assessee.
The learned Departmental Representative for the Revenue on the other hand, strongly placed reliance on the orders of authorities below.
We have heard the rival contentions and perused the record. The assessee during the year under consideration has made limited transactions, wherein total purchases made by the assessee numbered to 12. All the goods purchased by assessee were supplied to one party i.e. Chatrapatti SSK Ltd. and date-wise details of purchases and sales were available in the books of account maintained by assessee. In respect of alleged purchases from hawala person i.e. M/s. Shalaka International, the assessee had also tried to establish the trail of goods along with copies of purchase bills, lorry receipts and also pointed out that VAT on the said transactions had been paid by the assessee.
We find that similar issue of bogus purchases has been decided by us in series of decisions. The learned Authorized Representative for the assessee has placed reliance 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 and pointed out that at best 10% of GP rate may be applied on alleged bogus purchases. We find that where the assessee has established
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the trail of goods, then the case of assessee so far as purchase of goods stands established. However, in order to block any leakage of gross profit, where the goods may have been purchased from open market, we direct the Assessing Officer to make addition in the hands of assessee by adopting GP rate at 10% of bogus purchases over and above GP rate declared by the assessee. The assessee has not raised any arguments against re-assessment proceedings initiated. Hence, the ground of appeal No.1 raised by the assessee is dismissed and the ground of appeal No.2 raised by the assessee is partly allowed.
In the result, the appeal of assessee is partly allowed.
Order pronounced on this 23rd day of March, 2018.
Sd/- Sd/- (D.KARUNAKARA RAO) (SUSHMA CHOWLA) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER ऩुणे / Pune; ददनाांक Dated : 23rd March, 2018. GCVSR आदेश की प्रयिलऱपप अग्रेपषि/Copy of the Order is forwarded to : 1. अऩीऱाथी / The Appellant; 2. प्रत्यथी / The Respondent; 3. आयकर आयुक्त(अऩीऱ) / The CIT(A)-2, Pune; 4. The Pr.CIT-1, Pune; ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩुणे, एक-सदस्य 5. मामऱा / DR ‘SMC’, ITAT, Pune; गार्ड पाईऱ / Guard file. 6. आदेशािुसार/ BY ORDER, सत्यावऩत प्रतत //True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण ,ऩुणे / ITAT, Pune