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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: Shri Joginder Singh,
आदेश / O R D E R The assessee is aggrieved by the impugned order dated 03/11/2014 of the Ld. First Appellate Authority, Mumbai, challenging the confirmation of addition of Rs.1,33,00,97/- made by the Assessing Officer u/s 69C of the Income Tax Act, 1961 (hereinafter the Act) being peak amount purchases stated to be bogus purchases as per information from Sales Tax Department.
During hearing of this appeal, Shri D. C. Jain, ld. counsel for the assessee, contended that the impugned issue is covered by the decision from Hon’ble Bombay High Court in the case of CIT vs Nikunji/Exim Enterprises Pvt. Ltd. (372 ITR 619)(Bom.). However, the ld. DR, Shri Om Prakash Meena, contended that facts in the case before Hon’ble High Court are different, therefore, the ration laid down therein is not applicable to the facts of the present assessee. In reply, the ld. counsel for the assessee, contended that considering the facts of the present appeal, some reasonable disallowance may be made, which may be to the extent of 5% of the purchases. The ld. DR had no objection to the proposition made by the ld. counsel for the assessee.
2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is an individual, deriving income from salary carrying on proprietary business under the name and style of M/s Supreme Enterprises, engaged in the business of buying of chemical from market and export outside India. The assessee filed her return of income on 22/09/2010, declaring total income at Rs.19,47,618/-. The scrutiny assessment u/s 143(3) was completed on 25/03/2013 determining the income at Rs.31,94,480/- by making an addition of Rs.13,30,097/-, stating to be bogus purchases, u/s 69C of the Act. On appeal, before the Ld. Commissioner of Income Tax (Appeal), the stand taken in the assessment order was confirmed. The aggrieved assessee is in appeal before this Tribunal. We find that the assessee claim to have made purchases to the tune of Rs.6,84,23,238/- from various parties and exported the same out of India. The ld. Assessing Officer received information from the Maharashtra Sales Tax Department that certain persons have given bogus bills for the purchases. On verification of the list, it was found that the following suppliers were found to be suspicious/bogus by the Sales Tax Department.
Sl. Name of the parties Amount of purchases (In No. Rupees) 1 M/s Shree Ganesh Trading 14,06,080/- Company 2 M/s Manav Iimpex 1,16,73,813/- 3 M/s Mahavir Enterprises 3,66,080/- 4 M/s Shreyas Marketing 7,03,040/- We find that against the claimed purchases of Rs.6,84,23,238/-, the ld. Assessing Officer has disallowed the purchases to the tune of Rs.13,30,097/- u/s 69C of the Act by treating the same as bogus purchases. Assessee declared total sales (exports) to the tune of Rs.7,28,26,335/-. The stand of the assessee is that when sale has been accepted then purchases also have to be accepted. In the light of the decision from Hon’ble jurisdictional High Court (supra), we find that the assessee wants to take the shelter of the aforesaid decision without explaining the facts, because, wherever, the ld. Assessing Officer found the purchases within the parameter, the same were allowed. Even otherwise, the assessee has not proved that the purchases were 100% genuine. Other argument taken before us is that proper opportunity was not provided to the assessee to cross examination the parties from whom purchases were claimed to be made. The Bench asked the ld. counsel for the assessee whether the matter can be sent back to the file of the Assessing Officer so that opportunity may be provided to the assessee. The ld. counsel requested the Bench that the matter may not be sent back and a reasonable disallowance may be made. Considering the totality of facts, material available on record, reasoning contained in the assessment order/impugned order and the assertions made from both sides, we direct the ld. Assessing Officer to make disallowance of 5% of the purchases made by the assessee, thus, the appeal of the assessee is partly allowed.
Finally, the appeal of the assessee is partly allowed.
This order was pronounced in the open in the presence of ld. representative from both sides (and accepted by them) at the conclusion of the hearing on 20/06/2016.