ARIF ABBASBHAI KAMDAR,THANE vs. ITO WD 1 PALGHAR,

Per Manoj Kumar Aggarwal (Accountant Member)

against reassessment has not been pressed during proceedings before us and hence, the same is dismissed as being ‘not pressed’.

2. Briefly stated, the assessee, being resident individual, was subjected to an assessment u/s 143(3) read with Section 147 vide Assessing Officer [AO] order dated 30/12/2014 wherein the total income of the assessee was determined at Rs.41,12,130/- after making addition on account of bogus purchases for Rs. 36,72,973/- as against returned income of Rs.4,39,160/- filed by the assessee on 10/09/2009 which was originally assessed u/s 143(1). The reassessment proceedings were triggered pursuant to receipt of certain information from Sales Tax Department wherein certain dealers were found to have indulged in the issuance of accommodation purchases bills and the assessee’s name figured in the list of beneficiaries of such accommodation bills. Consequently, the case of the assessee was reopened u/s 147 by issuance of notice u/s 148 dated 10/05/2013 which was duly served and the assessee vide notice u/s 142(1) was asked to furnish the requisite information / purchase details with respect to 8 suppliers which were listed as suspicious dealers and from whom the assessee had made the Arif Abbasbhai Kamdar Assessment Year- 2009-2010 impugned purchases. The assessee was engaged as dealer of cement, cement sheet, steel and other building material under the name and style of A.A.Steel & Trading Co. The assessee had made aggregate purchase of Rs.36,72,973/- from the said suppliers to whom notices u/s 133(6) were issued but could not be served for want of availability of these concerns at the given addresses. Upon being confronted, the assessee submitted copies of purchase bills, transport receipts etc. to substantiate the purchases and contended that the purchases were genuine. However, not convinced, AO rejected assessee’s contentions and made the impugned additions.

3. The assessee assailed the same with partial success before Ld. CIT(A) vide impugned order dated 21/10/2015 wherein the Ld. CIT(A) after considering the factual matrix and placing reliance on various judicial pronouncements, restricted the impugned additions to 25%. Still aggrieved, the assessee is in appeal before us.

4. The Ld. Counsel for Assessee [AR] contended that the assessee was in possession of various purchase documents coupled with payment proof through banking channels and therefore, the purchases could not be doubted merely on the basis of outcome of 133(6) notices. The assessee, being a trader, sold the goods which were duly accepted by the revenue and the assessee has reconciled the quantitative details. The Ld. AR further contended that even otherwise estimation of profit @25% was on the higher side as earning this much of profit in assessee’s business was not possible.

5. Per Contra, Ld. Departmental representative contended that adequate relief has already been provided to the assessee by Ld. CIT(A) Arif Abbasbhai Kamdar Assessment Year- 2009-2010 despite being indulging in bogus purchases and therefore, the assessee deserves no further relief as the onus to substantiate the purchases squarely lied on the assessee which he has failed to discharge.

6. We have heard the rival contentions and perused the relevant material on record. We find that in the present case, the assessee, on one hand, could not produce the supplier or even the correct addresses of these suppliers despite having been made heavy purchases from these parties. Similarly, the revenue, on the other hand, has also failed to disprove the claim of the assessee conclusively as it could not controvert the quantitative details or sales revenue earned by the assessee. Therefore, we find lapses on both the sides. The Tribunal, invariably, in all such cases, have taken a stand that even if presuming that all purchases were bogus, entire addition thereof was not warranted for particularly when the sales were not in dispute and the assessee provided quantitative details and the addition, if any, which has to be made in all such cases is to account for profit element embedded in such purchase transactions. Therefore, after due discussion with both the representative, we estimate the addition @12.5% of bogus purchases of Rs.36,72,973/- which comes to Rs.4,59,122/- against which the assessee shall be entitled for benefit of profit already declared by him qua these purchases. Holding so, the matter is restored back to the the file of Ld. AO for limited purpose of calculating the final additions to be made in the hands of the assessee. The assessee, in turn, is directed to provide necessary information in this regard to Ld. AO forthwith failing which the AO shall be at liberty to decide on the basis of material available on record. Arif Abbasbhai Kamdar Assessment Year- 2009-2010

Sd/- Sd/- (Mahavir Singh) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated : 01.05.2017 Sr.PS:- Thirumalesh आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��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.