GIRIJAMATA JANHIT SEVABHAVI SANSTHA,,AURANGABAD vs. INCOME-TAX OFFICER,,

Both appeals relating to the same assessee on identical issues were heard together and are being disposed of by this consolidated order for the

The assessee in ITA No.235/PUN/2015, relating to assessment year 2009-10 has raised the following grounds of appeal:- 1. Commissioner of Income Tax (Appeals) has erred in estimating the Net Profit at 5% on Total Turnover working out to Rs.23,62,768/- and there by confirming Addition to Income at Rs.16,58,218/- Appellant prays to delete the additions made. 2. Without Prejudice to Ground No.1 and without accepting any Hawala Transactions etc. and if Appellant's contention is not accepted for any reason, still the transactions alleged are represented by Sale, thereby Profit on Sale is already offered in Returned Income, therefore addition made may please be deleted. 3. Without prejudice to Ground No.1 and 2 and without accepting any Hawala Transactions or estimation of Income at 5% estimate Percentage of Profit, nominal estimation should be restricted to only alleged Hawala Purchases. 4. Appellant prays to declare that Assessment Proceedings are Bad in Law as they are relying material without allowing Cross Examination. 5. Assessment Order and Proceedings be declared as Bad in Law for Assessing Officer not passing separate Speaking Order on Objections raised. CIT(A) has erred in not adjudicating Ground No.1 and 2 before him. 6. Appellant prays for Just and Equitable Relief. 7. Appellant prays for cancellation of Interest charged u/s 234B 8. 9. Without Prejudice to Ground No.8 Interest if held leviable may be restricted as per Provisions of Section 234B(3).

Despite service of notice, none appeared on behalf of the assessee nor any application was moved for adjournment. However, we proceed to decide the two appeals filed by the assessee for the respective years after hearing the learned Departmental Representative for the Revenue.

The only issue raised in the present appeals is against addition made by estimating net profit at 5% on total turnover.

We find that the issue is covered by earlier order 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.

On perusal of record, it is apparent that the addition was made in the hands of assessee on account of information received from the Sales Tax Department, wherein list of parties was drawn, who had indulged in making bogus purchases without delivery of goods. The Assessing Officer relied on the affidavits filed by the respective authorities before the Sales Tax Department. However, the plea of assessee against the same was that purchases made by it were genuine and the name of assessee was not mentioned in the statements of affidavit. The Assessing Officer rejecting the explanation of assessee made addition of ₹ 84,10,779/-.

The said addition was confirmed by the CIT(A) as purchases made from Hawala dealers were non genuine purchases. The plea of assessee that against the said purchases, it had made sales to the tune of ₹ 4.72 crores to the Government Departments and the assessee had maintained quantitative records and produced the same before the Assessing Officer, was accepted by the CIT(A). The CIT(A) held that total amount of purchases could not be added as income of assessee and therefore, estimated the profits @ 5% of total sales of assessee of ₹ 4.72 crores and made addition of ₹ 23,62,728/-. The assessee had already returned income of ₹ 7,04,510/- and addition to the

We find that the issue stands covered by the order of Pune Bench of Tribunal in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT (supra). Following the same parity of reasoning, we hold that where the assessee has maintained quantitative details of goods and where its supplies were to the Government Department, the purchases as such, could not be rejected. However, in the totality of the above said facts and circumstances and keeping in mind the ratio laid down by the Tribunal in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT (supra), we restrict the addition in the hands of assessee and direct the Assessing Officer to apply GP rate of 10% on the alleged goods purchased, over and above the GP rate declared by the assessee. The grounds of appeal raised by the assessee are thus, partly allowed.

The facts and issues in ITA No.236/PUN/2015 are identical to the facts and issues in ITA No.235/PUN/2015 and our decision in ITA No.235/PUN/2015 shall apply mutatis mutandis to ITA No.236/PUN/2015.

In the result, both the appeals of assessee are partly allowed.