ITO 19(3)(3), MUMBAI vs. SHRAVAN K BISHNOI, MUMBAI

In the captioned appeal for Assessment Year [AY] 2011-12, the revenue is aggrieved by relief provided to assessee on account of certain bogus purchases by Ld. Commissioner of Income tax (Appeals)- 30 [CIT(A)], Mumbai vide order dated 09/01/2015. None has appeared on behalf of assessee despite being provided with sufficient opportunity of being heard and therefore, we proceed to decide the appeal based on material available on record and after hearing Ld. Departmental Representative.

Facts leading to dispute are that consequent to receipt of certain information of bogus purchases from Sales Tax Department, the assessee, being resident individual, was subjected to an assessment u/s 143(3) read with section 147 vide Assessing Officer order dated 10/02/2014. The assessment was completed at Rs.67,62,500/- after addition of Rs.57,80,415/- u/s 69C on account of bogus purchases as against returned income of Rs.9,82,080/- e-filed by the assessee on 21/09/2011 which was processed u/s 143(1). The assessee was engaged in the business of Trading of Iron & Steel & Pipe Fittings. During assessment proceedings, the assessee was found to have made purchases from the following suspicious dealers:- S.No. Name of the party Amount (Rs.)

Aggrieved, the assessee, contested the same with partial success before Ld. CIT(A) vide impugned order dated 09/01/2015 where the assessee produced additional evidences to substantiate the purchases, against which remand report was called from the AO. The Ld. CIT(A) after considering the factual matrix placed reliance on several judicial pronouncements and concluded the matter in the following manner:-

The Ld. Departmental representative [DR] placed reliance on the order of Ld. AO to contend that the assessee failed to substantiate the purchases made by him in any manner and mere production of documents was not sufficient to prove the actual delivery of goods. The assessee failed to produce the parties before Ld. AO and also could not produce confirmatory letters. Notices issued u/s 133(6) remained un- served and complete onus to prove the purchases squarely lied on the assessee, which he has failed to discharge and therefore, rightly been saddled with full disallowance.

We have heard the contentions and perused the relevant material on record. We are convinced with the arguments of Ld. DR that the assessee has failed to discharge the primary onus of proving the purchases and it could not produce evidences to show actual delivery of material. However, even if all the purchases are found to be bogus, we find that sales turnover has not been disputed by the revenue and moreover, the assessee is in possession of basic purchase documents. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these transactions, which Ld. CIT(A) has rightly done so. Therefore, the order of Ld. CIT(A) being, fair and reasonable, require no interference on our part and the same is hereby confirmed.

The revenue’s appeal stands dismissed. Order pronounced in the open court on 26th May, 2017. (Saktijit Dey) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member मुंबई Mumbai; िदनांक Dated : 26. 05.2017 Sr.PS:- Thirumalesh