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2019 (4) TMI 1153 - ITAT MUMBAICondonation of delay - HELD THAT:- Hon'ble Supreme Court in the case of Vedabai Alia Vaijayanatabai Baburao Patil vs. Shantaram Baburao Patil 2001 (7) TMI 117 - SUPREME COURT] held that the court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression ‘sufficient cause’, the principle of advancing substantial justice is of prime importance. The court held that the expression “sufficient cause” should receive liberal construction. The circumstances narrated by the assessee, wherein, he has stated the reasons which caused the delay, therefore, the delay is condoned. Disallowance @ 20% of the bogus purchases - HELD THAT:- The assessee claim to have made purchases of ₹ 38,62,915/- (Assessment Year 2010-11) from the Hawala Parties mentioned in the assessment order. The Sales Tax Department carried out independent enquiries, wherein, conclusively proved that the parties were engaged in the business of providing accommodation entries without actual delivery of goods. The stand of the assessee before the AO as well as before the CIT (Appeal) is that the goods were consumed in the manufacturing process. Considering the suppressed profit to the tune of the ₹ 7,72,583/- (being 20% of purchases of ₹ 38,62,915) for Assessment Year 2010-11 and ₹ 8,86,064/- (being 20% of bogus purchases of ₹ 44,30,321/-) for Assessment Year 2009- 10, the addition was made. Admittedly, there cannot be sale without purchases or manufacturing without consumption but at the same time, the assessee being a manufacturer has to prove the consumption. The assessee has intentionally inflated the value of purchases by taking accommodation bills to reduced the gross profit and thereby reduced the taxable income. Thus the appeals of the assessee having no merit, therefore, dismissed.
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