Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member)
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.)
Siddhivinayak Steel 49,49,311 2. Seemant Trading Com 2,41,642 3 . Bajarangi Steel & Metal P.Ltd 5,89,462/- Total 57,80,415/-
3 Shravan K. Bishnoi Assessment Year-2011-12 Notices issued u/s 133(6) remained un-served. However, to support the purchases, the assessee produced ledger extracts, purchase invoices, bank statements, chart showing details of purchases and corresponding sales, copies of sale bill and statement of peak point calculation. However, not convinced, Ld. AO placing reliance of various judicial pronouncements treated the purchases as non-genuine and added the same to the income of the assessee as unexplained expenditure u/s 69C.
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:-
“2.4.38 As narrated earlier, the Ld. A.O. in this case has himself held that the parties from whom the purchases were made by the appellant were found to be bogus and that is the reason for which they were not produced during the assessment proceedings. The motive behind obtaining bogus bills, thus, appears to be inflation of purchase price so as to suppress true profits. In order to estimate as to what could be the GP which the appellant has suppressed which was embedded in the alleged purchases, it is seen that the appellant has shown different GP % in different years thus, betraying any clear picture about the actual GP. Such a variation also points to the fact that the appellant has manipulated his accounts though Ld. AO has not doubted the receipts from sate of products. Thus, in the facts and circumstances of the case and in view of reasoning given for estimation in CIT vs. Simit P. Sheth, I hold that the profit element embedded and suppressed in the alleged purchases were to the extent of 25%. Hence, addition to the extent of 25 % is upheld and balance is deleted. In this case, higher estimation is also made in view of the detailed investigation carried out by the Ld. AO which has clearly brought out that when the so called account payee cheques were issued, the same were withdrawn in cash on the very same day or the immediate next few days thus, leading to a preponderance of probability that the entire purchase to substantially
4 Shravan K. Bishnoi Assessment Year-2011-12 reduce his true profits. As seen earlier in the case of Vijay Proteins (supra), this is a case which calls for the disallowance as above as the payment by account payee cheque is not sufficient to establish the genuineness of the purchases [ Kachwala Gems 288 ITR 10 (SC)]. Accordingly, the ground raised is partly allowed.
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.
5 Shravan K. Bishnoi Assessment Year-2011-12
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
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : अपीलाथ" / The Appellant
""थ" / The Respondent 2. आयकर आयु"(अपील) / The CIT(A) 3. आयकर आयु" / CIT – concerned 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 5. गाड" फाईल / Guard File 6. आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.