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TMI Blog2018 (1) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... e was liable to be restricted to the extent of the profit element involved in making of the purchases, which could safely be concluded to have been made by the assessee from the Open/grey market. As regards the claim of the assessee that the lower authorities had erred in taking the quantum of the alleged bogus purchases at ₹ 60,08,592/- as against ₹ 59,83,592/-, we find that the aggregate of the purchases for the year under consideration as had been reproduced at Page 2 & 3 of the assessment order works out to ₹ 60,08,592/-. We find that as there is neither anything available on record which could go to prove that there is any such mistake, nor any assistance from the assessee who had chosen not to put up an appearance during the course of hearing of the appeal, therefore, we are constrained to conclude that the lower authorities had rightly adopted the bogus purchases at ₹ 60,08,592/-. - ITA(s) Nos. 4214 to 4216/Mum/201 - - - Dated:- 27-12-2017 - SHRI R.C SHARMA,AM AND SHRI RAVISH SOOD, JM For The Appellant : None For The Respondent : Shri Rajesh Kumar Yadav, D.R. ORDER PER RAVISH SOOD, JUDICIAL MEMBER: The present appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had made a disclosure of ₹ 60,08,592/- for the year under consideration during the course of the survey proceedings, however, he had not offered the same in his return of income. The A.O called upon the assessee to explain as why the amount of ₹ 60,08,592/- disclosed by him for the year under consideration during the course of the survey proceedings may not be added to his income. The A.O brought to the notice of the assessee his statement recorded under Sec. 133A during the course of the survey proceedings, wherein he had made a disclosure of bogus purchases of ₹ 60,08,592/- made from the following parties: S.No. Particulars 1. Manav Impex ₹ 6,55,000/- 2. Amar Enterprises ₹ 21,00,000/- 3. Sagar Enterprises ₹ 18,092/- 4. Aradhana Corporation ₹ 10,85,000/- 5. Om Corporation ₹ 21,50,500/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchases claimed by the assessee to have been made from the aforesaid parties were not genuine. The A.O further observed that the statement of the assessee recorded under Sec. 133A during the course of the survey proceedings was not retracted by him and thus did hold the ground on date. Thus, the A.O in the backdrop of his aforesaid observations, being of the view that the assessee had booked bogus purchases of ₹ 60,08,592/-, therefore, made an addition of the said amount to the income of the assessee. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions of the assessee raised before him in the backdrop of the facts of the case, observed, that the information shared by the DGIT(Inv.) with the A.O as regards the investigations carried out by the Sales tax authorities, nowhere revealed that the aforesaid parties had directly named the assessee as a beneficiary. The CIT(A) observed that the retraction of the statement by the assessee was not taken into consideration by the A.O, as the assessee had in compliance to the notice under Sec. 148 requested that his original return of income be treated as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. The assessee being aggrieved with the order of the CIT(A) had carried the matter in appeal before us. We find that despite the fact that the assessee was informed about the date of hearing of the appeal, however, neither anybody had put up an appearance on his behalf, nor any application seeking an adjournment of the case had been filed before us. We thus being left with no alternative, therefore, proceed with in terms of Rule 24 of the Appellate Tribunal Rules, 1963 and dispose of the appeal after hearing the respondent revenue and perusing the orders of the lower authorities. The ld. Departmental representative (for short D.R ) relied on the orders of the lower authorities and therein averred that though the assessee had made bogus purchase, the CIT(A) had already taken a liberal approach and restricted the addition only to the extent of the profit involved in making of such bogus purchases. The ld. D.R submitted that it was not merely a case of unproved purchases, but rather, a case where the assessee had admitted such bogus purchases and offered the same as his undisclosed income in the statement recorded under Sec. 133A during the course of the survey proceedings cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee. We find that on appeal, though the CIT(A) was in agreement with the observation of the A.O that the assessee had failed to prove the genuineness of the purchase transactions, but concluded that as the assessee was maintaining a stock register wherein the purchases under consideration were recorded and the sales of the purchases under consideration had also not been rejected by the A.O, therefore, it could safely be concluded that the assessee had made the purchases, though not from the aforesaid parties, but however from the Open/grey market. We find that the CIT(A) on the basis of his aforesaid observations restricted the addition to the extent of the profit that the assessee would have made from purchasing the goods from the Open/grey market, as in comparison to the regular market on the basis of which the purchases were booked in the books of accounts. We find that the CIT(A) relying on the judgment of the Hon ble High Court of Gujarat in the case of Simit P. Sheth (supra), worked out the profit element involved in making of such purchases by the assessee from the Open/grey market @12.5%% of the purchases of ₹ 60,08,692/- and restricted the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es at ₹ 60,08,592/- as against ₹ 59,83,592/-, we find that the aggregate of the purchases for the year under consideration as had been reproduced at Page 2 3 of the assessment order works out to ₹ 60,08,592/-. We find that as there is neither anything available on record which could go to prove that there is any such mistake, nor any assistance from the assessee who had chosen not to put up an appearance during the course of hearing of the appeal, therefore, we are constrained to conclude that the lower authorities had rightly adopted the bogus purchases at ₹ 60,08,592/-. The Ground of appeal No. 2 is dismissed . There is nothing mentioned against the Ground of appeal No. 3 and the Ground of appeal No. 4 5 being general in nature are dismissed as not pressed. 9. The appeal of the assessee is dismissed. ITA No. 4215/Mum/2015 A.Y. 2009-10 10. We shall now take up the appeal of the assessee for A.Y. 2009- 10, wherein the assessee assailing the order of the CIT(A) had raised the following grounds of appeal before us: 1. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) [herei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars 1. Manav Impex ₹ 47,10,000/- 2. Amar Enterprises ₹ 32,84,500/- 3. Sagar Enterprises ₹ 32,16,582/- 4. Aradhana Corporation ₹ 35,00,432/- 5. Global Trade Impex ₹ 2,62,500/- 6. Mani Bharda Trading Co. ₹ 3,25,500/- Total ₹ 1,52,99,514/- 13. The A.O being of the view that the assessee had failed to discharge the onus so cast upon him and prove the genuineness of its claim of purchases made from the aforesaid parties, therefore, holding a conviction that as the assessee in his statement recorded under Sec. 133A during the survey proceedings had admitted the purchases as bogus and offered the same as his income for the year under consideration, therefore, concluded that the purchases claimed by the assessee from the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/- on account of alleged bogus purchases. 2. That the order of Ld. CIT(A) is bad in law and on facts. 3. The Appellant craves leave to add or amend the foregoing grounds of appeal. 17. Briefly stated, the facts of the case are that the assessee who is engaged in the business of manufacturing of furniture had filed his return of income for A.Y. 2010-11 on 13.10.2010, declaring an income of ₹ 13,52,750/-. The case of the assessee was taken up for scrutiny assessment under Sec. 143(2). Survey proceedings under Sec. 133A of the Act were carried out at the premises of the assessee on 01.02.2013. The assessee during the course of the survey proceedings admitting that he had bogus purchases of ₹ 2,52,23,634/- from various persons, therefore, made a disclosure of ₹ 2,52,23,634/- for A.Ys 2007-08, 2008-09, 2009-10 and 2010-11. 18. The A.O during the course of the assessment proceedings observed that though the assessee had made a disclosure of ₹ 23,26,351/-for the year under consideration during the course of the survey proceedings, however, he had not offered the same in his return of income. The A.O called upon the assessee to explain as why t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the Open/grey market. The CIT(A) on the basis of his aforesaid observations, therefore, restricted the addition to the extent of the profit that the assessee would have made from purchasing the goods from the Open/grey market, as in comparison to the regular market on the basis of which those were booked in the books of accounts, and relying on the judgment of the Hon ble High Court of Gujarat in the case of Simit P. Sheth (supra), therein worked out the profit element involved in making of such purchases by the assessee from the Open/grey market @12.5%% of the purchase value of ₹ 23,26,351/- and restricted the addition to ₹ 2,90,793/-. 15. The assessee being aggrieved with the order of the CIT(A) had carried the matter in appeal before us. We find that the facts and the issue involved in the present appeal are the same, as were involved in the aforesaid appeal of the assessee for A.Y. 2008-09, marked as ITA No. 4214/Mum/2015, therefore, our order passed in the said case shall apply mutatis mutandis to the present appeal of the assessee for A.Y. 2010-11, marked as ITA No. 4216/Mum/2015. Thus, the appeal of the assessee is dismissed in terms of our observations re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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