AMIT BABULAL HARSORA,MUMBAI vs. ITO 20(1)(1), MUMBAI

The assessee has filed the present appeal against the order dated 17.03.2016 passed by the Commissioner of Income Tax (Appeals)-36, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2011- 12.

The learned CIT(A) has erred in law and in facts in not following binding precedents in the case of CIT Vs. Nikunj Eximp Enterprises (P) Ltd. (2013) 216 Taxman 171 (Mag.)(Bom)(HC) & Bombay tribunal judgements quoted in the order of CIT(A).

The appellant leaves the right to amend add, or alter the grounds at the time of regular hearing and the grounds are without prejudice to each other.”

The brief facts of the case are that the assessee filed his return of income on 15.02.2012 declaring total income to the tune of Rs.5,09,810/- The return was processed u/s.143(1) of the Income Tax Act, 1961 ( in short “the Act”). Later on the case was taken up for scrutiny assessment under CASS. Notice u/s.143(2) of the Act was issued on 03.08.2012 and duly served upon the assessee. Thereafter, notice u/s.142(1) of the Act along with questionnaire was issued and was duly served upon the assessee. During the course of assessment an information was received from DGIT (INV), Mumbai vide letter No.Corr.Field/DGIT(Inv)/2013-14/1767, Dt. 20.01.2014 and as per the list received from Sales Tax Department, wherein certain names of the parties were reflected, who were engaged in providing Hawala Transactions / Bogus purchase – sales bills to others. As per the list the assessee did the purchase transactions with the following parties. However, on verification, it was noticed that the TIN status of the following party was found to be ‘CANCELLED’. Sr. No. Name of the Party Amount 1 SWASTIK ENTERPRIES 1448325 2 VARUN ENTERPRISES 54003 3 S.M.TRADING CO. 495660 4 CHOKSI BROTHERS 607661 5 SHREE TRADING CORPORATION 51618 6 ALANKAR STEELS 119849 7 COMEX TRADING CO. 228826 8 OM TRADERS 381683 9 RIDDHI SIDDHI CORPORATION 849189 3 ITA No.3288.M.16 A.Y. 2011-12 10 RUSHABH ENTERPRISES 1765158 60,01,972 Therefore, show-cause notice dated 07.03.2014 was issued asking the assessee to produce the said parties. The assessee also filed reply dated 19.03.2014. To verify the genuineness of the purchase made by the assessee from all the parties the Range Inspector was deputed to serve the notices u/s.133(6) of the Act dated 10.03.2014. The Range Inspector has submitted his report stating therein that such parties were not in existance at the given address and no business activity was found to be carried out there. The Assessing Officer was of the view that the assessee was under obligation to prove the genuineness of the claim but the claim was not proved. Therefore, the bogus purchase to the tune of Rs.60,01,972/- was declined and was added to the income of the assessee. Feeling aggrieved the assessee filed the appeal before the CIT(A) who restricted the addition to the extent of 15%. Since the assessee was not satisfied therefore filed the present appeal before us. ISSUE NO.1 TO 11:- 4. All the issues are interconnected, therefore are being taken up together for adjudication. Under these issues the assessee raised only one point in which the assessee has asserted that the addition of 15%of purchases of Rs.60,01,972/- i.e. 9,00,296/- is wrong against law and facts and without any basis, therefore, the same is liable to be deleted in the interest of justice. At the time of argument the learned representative of the assessee has agreed to restrict the addition to the extent of gross profit of the last preceding year. 4 ITA No.3288.M.16 A.Y. 2011-12