ACIT 20(1), MUMBAI vs. BHUSHAN K VORA, MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य, राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार/ PER Rajendra A.M.- अनुसार Challenging the orders dated 16.01.2015 of the CIT(A)-32,Mumbai,the Assessing Officer (AO)has filed the present appeal.Assessee,an individual,engaged in the business of exports and imports of surgical instruments, filed his return of income on 27.09.2009 declaring a total income of Rs.1,08,66,731/-.The AO completed the assessment on 31.12.2013,u/s.143(3) r.w. s.147 of the Act,determining the total income of the assessee at Rs. 1.46 crores.

During the course of hearing before us,the Authorised Representative(AR)did not press the CO.Hence,same stands dismissed,as not pressed. I.T.A./2081/Mum/2015: 2.Effective ground of appeal is about deleting the addition made by the AO on account of bogus purchases.In this matter original scrutiny assessment was completed on 5.12.2011, determining the income of the assessee at Rs.1.16 crores.Subsequently, the case was reopened u/s. 147 of the Act on the basis of information received for DGIT(Inv.)Mumbai alleging that the assessee had made purchases of Rs. 29.98 lakhs and same were fictitious in 2081/M/15-Bhushan K. Vora nature.The assessee objected to reopening of the assessment and filed his objection before the AO. It was stated that the AO had failed to provide copies of statement of the parties whose statements were recorded by the Sales tax department,that the assessee was not given an opportunity to cross examine those parties,that it was a case of change of opinion, that he had furnished the copies of purchase bills and the bank statement,that the payments were made through banking channels, that quantity wise details of purchase and sales made from the alleged hawala dealers were submitted to the AO, that most of the sales had been made to govt. hospitals, tha the AO had accepted the sales made by the assessee,that after accepting the sales the AO was not justified in rejecting the purchases,that there was no independent evidence to prove non-genuineness of the purchases.He relied upon the cases of Nikunj Eximp Enterprises (216 taxman 161); Balaji Textiles Industries Ltd.(49ITD177);Nanglia Fabrics Pvt. Ltd.(220 taxman 17). After considering the submission of the assessee and the order of the AO, the FAA held that there could not be any sale without purchases,that the addition was made on the basis of information received from sales tax department,that the parties had not directly named the assessee, that the alleged suppliers had made a general statement of issuing bogus bills before the sales tax authority,that the AO had not made any attempt about the transaction ,that he did not confront the assessee with any adverse finding, that under the Act only real income could be taxed, that in case of non verifiable transactions only income component could be added and not the entire transaction amount.Finally,he confirmed the addition to the extent of Rs.12.5%.

During the course of hearing before us the Departmental Representative(DR) supported the order of the AO.The Authorised Representative(AR)relied upon the cases of Shri Madhukant B. Gandhi(ITA/1950/Mum/2009 dated 23.2.2010 for AY 2005-06); M/s. Prashant Enterprises (ITA/5467/Mum/2013 dated 24.2.2016 for AY 2010-11); M/s. Jitendra Harshadkumar Textiles P. Ltd. (ITA/771/Mum/2011 & dt.21.11.2012 for AY 2007 -08)and Shree Rajeev G. Kalathil (ITA/6727/Mum/2012 & C.O. No.06/Mum/2014 dated 20. 08.2014 for AY 2009-10).

5.We have heard the rival submissions and perused the material before us.We find that the AO had made addition of Rs.29.98 lakhs, that the FAA had deleted the addition of Rs.26.23 lakhs, that he had confirmed the addition of Rs.3.74 lakhs. Thus, the appeal filed by AO,was for the relief granted,by the FAA,of Rs.26,23,950/-.The tax effect for the disputed amount 2

2081/M/15-Bhushan K. Vora will be less than Rs.10.00 lakhs, so,the appeal is not maintainable as per the Central Board of Direct Taxes (CBDT), Circular No.21/2015(F.No.279/Misc. 142/2007-ITJ (Pt.) dated 10th December, 2015. Even on merits we find that the order of the FAA does not suffer from any legal infirmity. The AO was not justified in making the addition of total disputed amount after accepting the genuineness of the sales.We find that the FAA had given part relief to the assessee. Confirming his order,we decide the effective Ground of appeal against the AO.