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TMI Blog2017 (9) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... these two parties. Hence, this ground of appeal is partly allowed. In the result, appeal of the assessee is partly allowed. - ITA No. 6340 /Mum/2016 And ITA No. 6339/Mum/2016 - - - Dated:- 17-8-2017 - SHRI B.R. BASKARAN ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri Navin Kumar Mishra (AR) For The Revenue : Shri M.C. Ominineshen (DR) Order under section 254(1) of Income-tax Act Per Pawan Singh Judicial Member ; 1. These two appeal by assessee under section 253 of Income-tax Act ( Act ) are directed against two separate order of Ld. Commissioner (Appeals)- 41, Mumbai dated 10.08.2016 for Assessment Year (AY) 2010-11 2011-12 respectively. The assessee has raised identical gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awala transaction for purchase of material for ₹ 10,48,085/-. Notice u/s 148 dated 07.02.2014 was served. The reasons recorded were also provided to the assessee. The assessee contested the re-opening proceeding. The assessment was completed on 25.03.2015 u/s 143(3) r.w.s. 147 of the Act. The Assessing Officer (AO) while passing the assessment order disallowed 100% of purchases. Accordingly, addition of ₹ 10,48,085/- was added in the total income of assessee. On appeal before the ld. CIT(A), the re-opening of was sustain, however, the disallowance on account of purchases was partly sustained@ 30%of bogus purchases. Further, aggrieved by the order of ld. CIT(A), the assessee filed the present appeal before us. 3. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gued that the entire addition may be deleted. On the other hand, the ld. DR for the Revenue supported the orders of authorities below. The ld. DR for the Revenue argued that the Investigation Wing of the Income-tax Department made full-fledged enquiry. The parties from whom the assessee has shown the purchases are bogus Hawala dealers. The hawala dealers are indulged in issuing bogus bills without delivery of any material or goods. The assessee obtained accommodation bills only in order to inflate the expenses and to bring down the profitability in order to avoid the tax. The ld. DR for the Revenue prayed for dismissal of the appeal. 5. We have considered the rival submission of the parties and have gone through the orders of authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n purchases remained unverifiable. Through, there is possibility of leakage of revenue and concluded that the assessee has not purchased the goods from the parties and only accommodation bills were taken in order to inflate the expenses. Hence, the entire purchases were disallowed. 6. We have noted that the AO has not given any observation about the service of notices sent u/s 133(6), or any reply was received from such parties. The AO made the disallowance of the entire purchases from both the parties. The ld. CIT(A) on the basis of decision of Hon ble Gujarat High Court in Vijay Proteins Ltd. vs. CIT [2015] 58 taxmann.com 44 (Guj.) and CIT vs. Simith P. Sheth [2013] 356 ITR 451 (Guj.) held that disallowance of 100% of the purchases amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that in order to fill up the gap of revenue leakage, the disallowance of 12.5% of impugned purchases would meet the end of justice. Thus, the AO is directed to restrict the disallowance @ 12.5% of total purchases impugned/bogus/disputed purchases from these two parties. Hence, this ground of appeal is partly allowed. 8. In the result, appeal of the assessee is partly allowed. ITA No. 6339/Mum/2016 9. The assessee has raised the identical grounds of appeal. Facts of the present case are not at much variance. In the year under consideration, the assessee has shown to have purchases of ₹ 14,09,047/- from two parties namely M/s Siddhivinayak Steel for ₹ 21,778/- and M/s Laxmi Traders for ₹ 13,87,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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