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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM
आदेश / O R D E R PER R.C.SHARMA (A.M):
These are the appeals filed by the assessee against the order of CIT(A) – 3, Thane dated 01/07/2016 for the A.Y. 2009-10 to 2011-12 in the matter of order passed u/s.143(3) of the IT Act.
In all these appeals assessee is aggrieved for addition made on account of bogus purchases. In the Assessment order AO has observed that information was received from higher authorities giving details of certain persons who have provided accommodation entries to a large number of beneficiaries for bogus purchase bills. The name of assessee Smt. Subhadra Chandrabhan Shukla, Prop Shree Gurudev Traders also appears in the list of beneficiaries who have obtained bogus purchase bills from the entry providers.
6624/Mum/2016 Shree Gurudev Traders 3. During the course of assessment proceedings the A.R. of the assessee vide his submission dated 16/04/2014 filed following details. "1. The zerox copy purchase bill alongwith the receipts of transport (L.R.) receipts are enclosing for your record. I am also request you to called the party of M/S. D.N.Enterprises, M/S. Reliance Enterprises, M/S. Raj Tool Corporation arid M/S. Shiv Industries for the cross examination verification of truth. I will not consider affidavit made by the above party. Further I required affidavit copy of above party.
2. I am also enclosing Xerox copy of the decision Gujrat High Court CIT V/so Simith P. Seth (2013) 356 ITR 451 (Gujrat) & ict v/s. Bholenath Polyfab Pvt. Ltd. (2013) 355 ITR 290 (Gujrat) for your record."
However, AO did not agree with assessee’s contention and added entire purchases in assessee’s income.
By the impugned order, CIT(A) confirmed the same. Assessee is in further appeal before us. 6. I have gone through the orders of the authorities below and deliberated on the judicial pronouncements cited at bar. From the record I found that on the basis of information from Sales Tax Department, AO stated that assessee made purchases of Rs.1,22,233/- during the A.Y. 2009-10 from such party. To prove its purchases, assessee has furnished bank statement of party’s account, payment mode, ledger account, copies of bills. The assessee has also filed transportation bill, complete name and address of the transporters with Xerox copy of LR, payment of VAT, challans etc., 6624/Mum/2016 Shree Gurudev Traders 6. I found that looking to the nature of business i.e., retail selling of hardware, paints and electrical etc., assessee has shown reasonable GP in terms of turn over during the year. Sales so made by the assessee has been accepted by the AO. Without purchase there cannot be sale, therefore, AO’s assumption that assessee has not purchased any goods is not correct. Therefore, AO was not justified in making addition of entire amount of purchases. 7. Keeping in view totality of facts and circumstances of the case vis-à-vis nature of assessee’s business and GP rate shown in earlier order, I direct the AO to restrict the addition to the extent of 10% of such bogus purchases. I direct accordingly. 8. Facts and circumstances in the A.Y. 2010-11 and 2011-12 are same, I direct the AO to restrict the addition to the extent of 10% of such purchases. 9. In the result, appeals of the assessee are allowed in part.