TMI Blog2017 (8) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture of the engineering goods so dealt with by the assessee with cogent evidences before the A.O. including production of excise records concerning stocks and also to prove that these purchases to the tune of ₹ 82,54,793/- from these alleged entry operators were genuine. The AO shall admit all relevant evidences /material filed by the assessee in de-novo proceedings before adjudicating this issue on merits in accordance with law. - I.T.A. No. 5013/Mum/2016 - - - Dated:- 16-8-2017 - SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Revenue : Shri V Justin For The Assessee : None ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the Revenue, being ITA No. 5013/Mum/2016, is directed against the appellate order dated 31st May, 2016 passed by learned Commissioner of Income Tax (Appeals)- 13, Mumbai (hereinafter called the CIT(A) ), for assessment year 2011-12, appellate proceedings before learned CIT(A) arising from the assessment order dated 27-03-2014 passed by learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income-tax Act, 1961 (hereinafter called the Act ). 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of the party PAN TIN F.Y. Amount involved(Rs) 1 Somnath International AISPG1601K 27470616755V 2019-11 1,60,538 2 M R Corporation BFLPS4883N 27710551730V 2010-11 4,36,255 3 Viva Trading Pvt. Ltd. AADCV3609A 27040801631V 2010-11 22,50,000 4 Pluto Multitrade P. Ltd. AAFCP5947B 2792079455IV 2010-11 54,08,000 Total 82,54,793 The assessee had submitted list of purchase vouchers, gross total of purchase material, VAT, forwarding charges, freight charges, transport charges and excise inputs etc., list of sales vouchers, bank reconciliation statement etc. The assessee was asked by the A.O. to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter in appeal before the ld. CIT(A), who after considering the submission of the assessee held as under:- I have carefully considered the AO's order as well as the AR's submissions. According to the AO, the entire bogus purchases amounting to ₹ 82.54 lakhs ought to be added back as the four parties concerned had confessed to the Sales Tax Department that they had indulged in bogus sales. Further, all the four notices issued under section 133(6) of the Act also have been returned back unserved as these parties were not available at the respective addresses. On the other hand, the AR has pointed out that the AO has not disturbed the sales emanating from these allegedly bogus purchases. Accordingly, the AR has proposed that only the GP should be added back and not the entire quantum of the alleged bogus purchases. Coming to the issue of GP, the AR has furnished copies of the audited accounts for the preceding five assessment years viz. AYs 2006-07 to 2010-11. The GP ratios of these years have been worked out as follows - 27.98% (AY 2006-07), 18.36% (AY 2007-08), 16.14% (AY 2008-09), 12.98% (AY 2009-10) and 12.56% (AY 2010-11). The average GP of these five ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged bogus purchases in the absence of the assessee proving consumption/ utilization of the material for producing finished goods. It is submitted by learned DR that the assessee failed to prove genuineness of these alleged purchase transactions from hawala entry providers. Under these circumstances the learned DR submitted that the matter needs to be set aside and restored to the file of the A.O. for re-determination of the issue after verifying the consumption/utilization of the material for manufacturing of finished goods. 8. We have considered rival contentions and also perused the material available on record. We have observed that the assessee company is manufacturer of engineering goods. Information was received by the AO from DGIT (Inv.) Mumbai regarding bogus purchases as informed by the Sales Tax Department in which the assessee company appeared as one of the beneficiaries for the transaction of ₹ 82,54,793/- through bogus purchases from hawala entry operators who are engaged in providing accommodation entries by issuing bogus bills without supplying any material, the details of which are as under:- Sr No Name of the par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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