MAYUR R. SHRIMANKER,MUMBAI vs. CIT(A)-39, MUMBAI

Common grievance of the assessee relates to CIT(A)’s action in confirming disallowance at 12.5% of the purchase amount effected from dealers whose names appear in the list of hawala dealers.

Rival contentions have been heard and record perused. In the course of assessment the AO made addition in respect of purchases made from dealers, who are alleged by sales tax department as hawala dealers. The AO made addition of 25% of purchases shown from 13 parties, alleged by the sales tax department.

By the impugned order, CIT(A) confirmed the addition at 12.5% of such purchases and deleted the balance. The assessee is in further 2 appeal before us against the sustaining addition of 12.5% of such purchases.

I have considered rival contentions and found from the record that detailed finding has been recorded by CIT(A) with regard to the purchases and sales so made by the assessee. The books of accounts were not rejected and it was found that whatever the purchases had been made by the assessee had been properly accounted for and also sold during the year under consideration and assessee has also disclosed GP rate at 6.31%, which is prevailing rate of GP in the similar trade. Under these circumstances, I find it reasonable to uphold the addition of 5% as against addition of 12% as upheld by the CIT(A).

In the result, appeal of the assessee is allowed in part. Order pronounced in the open court on this 21/10/2016.