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TMI Blog2018 (11) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... -10 and our decision in appeal for AY 2009-10 shall apply mutatis mutandis to the appeals for AY 2010-11 and 2011-12 respectively. 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") in ITA No. 3471/Mum/2015 for AY 2009-10, read as under:- "1.1 It is submitted that in the facts and the circumstances of the case, and in law, the reassessment framed u/s. 147 of the Income - tax Act, 1961 ["the Act"] is bad in law. WITHOUT PREJUDICE TO THE ABOVE 2.1 The Learned Commissioner of Income - tax (Appeals) - 42, Mumbai ("Ld. CIT (A)"], erred in confirming the addition u/s. 69C of the Act made by the A.O. on the ground of alleged bogus purchases to the extent of Rs. 16,98,513/- by applying average gross profit rate at 5.64% to the amount of alleged bogus purchases. 2.2 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for. 2.3 Without prejudice to the above, in the alternative, assuming - but not admitting - that some disallowance was called fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SES 27750288644V ATBPS5210L 2009-10 2,23,54,7067- 03 NK TRADERS 27570136744V AEDPC2617J 2009-10 2,27,26,3847- Total 6,60,35,324/- The AO observed that the Sales Tax Department made enquiries with respect to aforesaid parties which proved that these parties were hawala dealers issuing bogus accommodation invoices without supplying any material. The notices were issued by the AO to all these three parties u/s 133(6) which returned unserved by postal authorities as these parties were not tracable at the given addresses. The assessee was asked by the AO to prove whereabouts of all these three parties or to produce these parties for verification and prove the genuineness of the purchases . The assessee only supplied ledger accounts of these parties. The assessee did not produced these parties nor supplied new addresses of these parties before the AO. The AO made additions to the tune of Rs. 6,60,35,324/- to the income of the assessee u/s. 69C by treating these purchases as an unexplained expenditure , vide assessment order dated 26.02.2014 passed u/s 143(3) read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot justified and accordingly I direct the AO to restrict the additions to the extent of gross profit margins at Rs. 35,11,220 made u/s. 69C. This ground of appeal is partly allowed." 6. Aggrieved by the appellate order passed by learned CIT(A) dated 12.03.2015, the assessee is in appeal before the tribunal.None appeared on behalf of the assessee . The notices that were sent to the assessee by tribunal intimating date of hearing had returned unserved which are placed in file. On one occasion on 4th May, 2017,the assessee entered appearance before tribunal and sought adjournment which was granted by the tribunal , while on other occasions on 9th February , 2017, 15th March, 2017, 12th June, 2017, 26th Nov, 2018 and 27th Nov, 2018 , the assessee did not entered appearances when the appeal was called for hearing before the Bench. The notices which were sent by registered AD post on 15th February , 2017, 24th July, 2017 and 8th Nov, 2018 had returned unserved and the original envelops returned by postal authorities are placed in file. The assessee is not vigilant in persuing his appeal with tribunal. 7. The Ld. DR on the other hand sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; 6,60,35,324/- The AO also made inquiries u/s. 133(6) from all these three parties wherein notices sent were returned unserved by postal authorities as these parties were not traceable at the given addresses. The assessee did not furnish new addresses of these parties nor produced these parties before the AO . The assessee however had submitted details concerning these purchases before the AO. The assessee , however could not prove the movement of material purchased from these parties . The AO added 100% of the said purchases to the income of the assessee , while the Ld. CIT(A) considered the three years gross profit to determine the disallowance , wherein gross profit of the assessee was computed at Rs. 35,11,220/- as against declared gross profit of Rs. 33,31,662/-. The matter reached tribunal at the behest of Revenue also as the Revenue was also aggrieved by the appellate order passed by learned CIT(A) granting partial relief. We have observed that the tribunal in ITA no. 3578, 3659 & 3579/Mum/2015, AY 200910, 2010-11 & 2011-12 in Revenue‟s appeal for all these three years, vide common orders dated 11th July, 2017 has passed a well reasone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peak balance of Rs. 1,02,57,284/- (for A.Y. 2010-11) and made addition under section 69C of the I.T. Act. The AO has also added the GP @8% on the total bogus purchases. 4. The matter was carried to the CIT(A) and the CIT(A) has applied GP margin at 5.07% and restricted the addition to Rs. 30,86,720/-. 5. None appeared on behalf of the assessee. The learned D.R. submitted before that in the case of NK Proteins Ltd. vs. DCIT the Hon'ble Supreme Court has confirmed the addition on account of bogus purchases at 100% and similar view has been taken by the Hon'ble Gujarat High Court and applied GP @6%. 6. Having heard the learned D.R. we find that it is the case of Revenue that the assessee failed to discharge the onus of proving the purchases and could not produce evidence to show the actual delivery of material and could not produce confirmation letters from the alleged suppliers. However, we find that the assessee is in possession of purchase invoices and payments are through banking channels. Therefore, if at all the purchases are found to be bogus we note that the sales turnover has not been disputed by the Revenue. Therefore, in such a case the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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