VINOD R. SANGHAVI,MUMBAI vs. ITO 19(2)(2), MUMBAI

The present appeal has been preferred by the assessee against the order dated 13.11.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2008-09.

None has come present on behalf of the assessee. Earlier the case was fixed for 18.08.15. But no one appeared on behalf of the assessee despite notice, and the case was adjourned for 24.11.15. The notice for today’s hearing was also issued to the assessee by RPAD on 13.10.15. But today again none has come present on behalf of the assessee. It seems that the assessee is no more interested in prosecuting his appeal. We, therefore, proceed to decide the appeal on merits after hearing the Ld. D.R.

The assessee, in this appeal, has agitated the confirmation of addition of Rs.20,75,270/- in respect of purchases made by the assessee from different parties. The assessee is engaged in the business of scrap trading. The total purchases during the year were shown at Rs. 123,82,505/-. Out of these purchases, the purchases subjected to TCS were of Rs.88,53,094/-. The Assessing Officer (hereinafter referred to as the AO) observed that since the assessee was dealing in scrap, therefore, total purchases should have been subjected to TCS, but in the present case on the remaining purchases i.e. Rs.35,29,411/- there was no TCS made. Accordingly, the assessee was asked to explain the same. In response to this, the AR of the assessee submitted its reply along with confirmations. To verify the genuineness of the purchases, the AO issued notices u/s 133(6) to five parties as mentioned at page 2 of the assessment order. In case of two parties, no reply was received and in one case notice was received back unserved. The AO pointed out this discrepancy to the assessee but no reply was filed. Accordingly, the AO took the purchases which were confirmed amounting to Rs.88,53,809/- i.e. TCS purchase and confirmations received in case of Schin Impex of Rs.9,60,586/- and Prabhat Metal Industries of Rs.82,374/-, thus, the total purchases were confirmed at Rs.98,96,769/-. Accordingly, the AO asked the assessee to explain the balance purchases of Rs.24,85,736/-, but no documentary evidence to prove the genuineness of the purchases was submitted, therefore, the AO treated this amount of Rs.24,85,736/- as bogus purchases and added back to the taxable income of the assessee. Being aggrieved by the order of the AO, the assessee went in appeal before the Ld. CIT(A).

Before the Ld. CIT(A), the assessee filed further details relating to the purchases about which the Ld. CIT(A) called remand report from the AO. The AO made further enquiries and investigations and submitted his remand report in which the AO stated that the assessee had failed to produce the party Stanpack Pharma Pvt. Ltd. and hence the addition of Rs.9,85,545/- in respect of the purchases from the said party be confirmed. The AO similarly reported that the assessee could not produce any evidence relating to the party ‘Plasto Pack’ and recommended the confirmation of addition of Rs.7,14,932/- in this respect. So far as the addition of Rs.4,09,658/- was concerned, the AO noted that the information was received from the said party which tallied with the purchases shown by the assessee, hence the above addition be deleted. In respect of the other party, ‘Glamour Tin Industries Ltd.’, the AO noted that there was a difference of Rs.3,13,797/-. Hence, addition be restricted to Rs.3,13,797/- out of the addition of Rs.3,21,018/-. The AO further reported that no reply was received from the party ‘Canara Packaging’ and hence recommended for the confirmation of addition in respect to the said party. The Ld. CIT(A) after, going through the remand report of the AO, held that the assessee could produce evidence in relation to one party i.e. HBR Packaging only and further that in respect of the other party ‘Glamour Tin Industries Ltd.’ the assessee could not explain the difference of Rs.3,13,797/-. The assessee also could not produce any evidence in respect of the purchase made from the other three parties. The Ld. CIT(A), therefore, allowed the relief to the assessee of Rs.4,09,658/- in respect of HBR Packaging and of Rs.7,221/- in case of Glamour Tin Industries Ltd. and confirmed the balance addition made by the AO.

Before us neither anyone has appeared on behalf of the assessee nor any submissions have been tendered. The Ld. CIT(A) after calling the remand report from the AO has confirmed the disallowance in respect of purchases about which neither the assessee has submitted any evidence nor the concerned parties have confirmed the same. In view of the above, we do not find any infirmity in the order of the Ld. CIT(A) and the same is therefore upheld.

In the result, the appeal of the assessee is hereby dismissed.