TMI Blog2019 (11) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the well reasoned order of the Id. CIT(A) whereby net profit was estimated which was a reasonable estimation made by learned CIT(A) and we sustain/ affirm the order of learned CIT(A) - Decided against revenue - ITA No. 6833/MUM/2018 - - - Dated:- 7-11-2019 - Shri Mahavir Prasad (JM) And Shri S. Rifaur Rahman (AM) For the Assessee : Shri S. Michael Jerald (DR) For the Revenue : Shri Viraj Mehta ORDER PER MAHAVIR PRASAD, JM This appeal has been preferred by the Revenue against the order of Ld. CIT(A)-25/IT-113/2015-16 dated 04.09.2018 arising out of assessment order dated 28.03.2015 and Revenue has taken following grounds of appeal:- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of ₹ 2,40,240/- made by the Assessing Officer on account of bogus purchases, without appreciating the fact that the assessee had failed to produce bills, vouchers and other documentary evidences in support of his claim and without considering the latest Apex Court decision in the case of N K Protein Ltd. wherein it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant as Bogus. 2.7. Kindly also note that, the above Party was also having a Valid VAT No 27390395445V issued by the concerned Government department after due examination. 2.8. Further, in absolute terms as apercentage alleged bogus purchase comes to almost negligible 0.31 %, out of total purchases hence on the basis of the declaration made by the party, the same cannot be regarded as non- genuine / bogus transactions. 2.9. Appellant had purchased raw materials and as such the above material was consumed for making specialty chemicals and the corresponding Sales are already taken as Sales and offered as Income through revenue account, being credited as Sales to the Profit Loss account. 2.10. From the above all facts and circumstances, taken together clearly reflects that the appellant had made genuine purchases from the above party. 2.11. Without prejudice it is submitted that Ld. AO has made 100% addition. It is submitted that an adhoc3-5% be added if your honors do not agree with the above submission and arguments of the appellant. Hon. Mumbai Tribunal has in many cases sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 60,33,496 4. V3 Enterprises 27860613194V -do- ₹ 26,16,988 Total ₹ 1,13,44,778/- The AO issued notices u/s 133(6) of the Act to the above stated parties to seek relevant information/documents but the notices were returned un-served. The assessee was asked by the AO to produce these four parties but the assessee could not produce the parties from whom the purchases were made. The AO made additions u/s 69C of the Act of the peak credit outstanding to be payable to these four parties during the year to the tune of ₹ 1,31,88,227/- as against purchases of ₹ 1,13,44,778/-. The credit for purchases from these four parties of ₹ 1,13,44,778/- are appearing in the books of accounts of the assessee. The assessee has to discharge the primary onus as to the genuineness and bonafide of the transaction of purchase of goods. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and perused and carefully considered the material on record. We find that the learned CIT(A) has addressed this issue in detail and after considering the submissions of the assessee, the AO's findings and various judicial pronouncements on this issue, has held that since the direct one to one relationships between purchases and sales have not been established, bringing the profit element embedded in the impugned purchase estimated @12.5% thereof, i.e. ?5,15,377/- to tax in the hands of the assessee would meet the ends of justice. The learned CIT(A) at paras 7 to 7.31 of the impugned order has considered and decided the issue as under: - 7. After taking into consideration the AO's findings and the appellant's submissions and order sheet notings, as well as the facts of the case, decision on the ground raised by the appellant, is made here under:- 7.1. All the above grounds of appeal are in respect of addition of ₹ 41,23,015/- on account of alleged bogus purchases made by the appellant from certain parties. Therefore, all the grounds are being taken up together for disposal. Briefly stated, assessee is a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai had provided a list of hawala bill racketeers who were involved in issuing bills and also the list of beneficiaries. The Sales Tax Department of Mumbai had investigated all these cases thoroughly and prepared a list of such hawala operators and their beneficiaries which have been uploaded in their Website. The Ld. AO observed that these hawala operators were providing only accommodation entries and the appellant was also in the list of beneficiaries. Accordingly, the Ld. AO treated the amount of ₹ 41,23,015/- as bogus purchases and added back to the total income of the appellant. 7.5 At assessment stage, opportunity was given to assessee to produce the parties for verification, but the assessee failed to do so. The supplier was in fact the appellant's witness and the Ld. AO was not required to force its attendance. It was for the appellant to produce it as per Civil Procedure Code which applies on all fours to the income-tax proceedings. It is trite that once a transaction is shown to be of the nature of income, the onus shifts to the assessee to show that the same was not taxable. It can thus be safely assumed that the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned CIT(A) on this issue of bringing to tax in the assessee's hands the profits embedded in the bogus purchase @ 12% of the purchase cost i.e. ₹ 5,15,377/-, since the direct one to one relationship/nexus between the said purchases and sales have not been established by the assessee. Consequently ground No. II (iii to vii) is dismissed. 7. In the result, the assessee's appeal for A.Y. 2009-10 is dismissed. In the case of ITO vs. Manish Kanji Patel in ITA No. 7299/Mum/2014, 7154/Mum/2012 7300/Mum/2014 Coordinate Bench has held as follows:- 9. We find that in the instant case the facts are similar to the judgment by Hon'ble Gujarat High Court, we find that entire bogus purchases and entire amount of bogus purchase cannot be the gross profit of the assessee. We find that the purchases were not bogus but were made from the parties other than those mentioned in the books of account. The Assessing Officer has not disputed the sales of the assessee and quantity of sales of closing stock. The assessee has though disputed the addition but no evidence is produced and no document is produced to show that purchases wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
