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TMI Blog2018 (2) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 2011-12. ITA no.3376/Mum./2016 - Revenue's Appeal 2. The only effective ground raised by the Revenue is in relation to the decision of the learned Commissioner (Appeals) in restricting the disallowance / addition under section 69C of the Income Tax Act, 1961 (for short "the Act") to 12.5% of the alleged bogus purchases. 3. Brief facts are, the assessee a company is engaged in manufacture and trading of ferrous and non-ferrous metals. For the assessment year under dispute, assessee filed its return of income on 1st February 2012, declaring total income of Rs. 1,98,54,230. During the assessment proceedings the Assessing Officer on the basis of information obtained from the Sales Tax Department, Government of Maharashtra, found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases for the very same assessment year the Tribunal in ITA no.3189/Mum./2016, though, upheld the estimation of profit on alleged bogus purchases @ 12.5%, however, directed the Assessing Officer to reduce the gross profit already declared by the assessee from the profit to be estimated at 12.5% of the bogus purchases. The learned Departmental Representative also agreed with the aforesaid submissions of the assessee. As could be seen from the material on record, while deciding assessee's appeal arising out of the impugned order of the learned Commissioner (Appeals) the Tribunal has directed the Assessing Officer to adopt the profit rate on alleged bogus purchases @ 12.5% and thereafter reduce the gross profit already declared by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown by the assessee was Rs. 4,64,16,647. Since, the assessee failed to reconcile the difference in closing and opening stock, he treated the differential amount of Rs. 68,17,605 as undisclosed opening stock and added to the income of the assessee. 11. The assessee challenged the addition in an appeal preferred before the first appellate authority. However, since the assessee did not appear in the appeal proceedings and failed to reconcile the difference in closing and opening stock with supporting evidence, the learned Commissioner (Appeals) sustained the addition. 12. The learned Authorized Representative submitted that due to non-communication of statutory notices and other unavoidable circumstances assessee was unable to appear befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales Tax Department, Government of Maharashtra, found that purchases worth Rs. 1,10,27,763 claimed to have been made by the assessee from Sunico Traders Pvt. Ltd. were not genuine as the said party has provided accommodation bills without actual delivery of goods. Though, the Assessing Officer called upon the assessee to prove the genuineness of purchases, however, since the assessee neither appeared before the Assessing Officer nor complied to the queries raised by him, the Assessing Officer proceeded to reject the books of account and treating the purchases made of Rs. 1,10,27,763 as bogus added to the income of the assessee. 17. The assessee challenged the addition before the first appellate authority. However, since before the first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer to prove the genuineness of purchases made. Even, before the first appellate authority also the assessee neither appeared nor produced any supporting evidence to prove the genuineness of purchases. Therefore, in the given circumstances, the Departmental Authorities had no other option but to treat the entire purchases as bogus. Though, the learned Authorized Representative has placed reliance upon the decision of the Tribunal in assessee's own case for assessment year 2010-11 in ITA no.2791/Mum./2017 and C.O. no.146/Mum./2017 dated 9th October 2017, however, on careful perusal of the said order of the Tribunal, it is observed that in the said case the assessee had appeared before the Departmental Authorities and particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are inclined to restore the issue to the file of the Assessing Officer for de novo adjudication after due opportunity of being heard to the assessee. Further, we make it clear, In case the assessee doesn't appear and fails to cooperate with the Assessing Officer in finalizing the proceedings, the Assessing Officer is at liberty to decide the issue on the basis of materials on record and in accordance with law. This ground is allowed for statistical purposes.
21. In the result, assessee's appeal is partly allowed for statistical purpose.
22. To sum up, Revenue's appeal is dismissed and assessee's appeal is partly allowed for statistical purposes.
Order pronounced in the open Court on 02.02.2018 X X X X Extracts X X X X X X X X Extracts X X X X
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