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TMI Blog2020 (3) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... Investigation Wing of the Department to the assessee allowing the assessee to test the veracity of such information otherwise such information could not be relied upon. As decided in VAMAN INTERNATIONAL PVT. LTD. [ 2020 (2) TMI 464 - BOMBAY HIGH COURT] merely because the suppliers had not appeared before the Assessing Officer, no conclusion could be arrived at that the purchases were not made by the assessee - No error or infirmity in the finding returned by the Tribunal. - Decided against revenue - INCOME TAX APPEAL (IT) NO.1354 OF 2017 - - - Dated:- 10-2-2020 - UJJAL BHUYAN MILIND N. JADHAV, JJ. Mr. Akhileshwar Sharma, Advocate for the Appellant. Mr. M. Subramanian i/by Mr. V.S. Hadade, Advocate for the Respondent. P.C.:- 1. Heard Mr. Akhileshwar Sharma, learned standing counsel Revenue for the appellant; and Mr.M. Subramanian alongwith Mr. V.S .Hadade , learned counsel for the respondent/assessee. 2. This appeal has been preferred by the Revenue under Section 260A of the Income Tax Act, 1961 (briefly the Act hereinafter) against the order dated 21st September, 2016 passed by the Income Tax Appellate Tribunal, Mumbai Bench J , Mumbai ( Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 290 ITR 702 (Guj) wherein it is held that provisions of Section 40A(3) of the Income Tax Act, 1961 were applicable to the cases of bogus purchase? 4. Respondent (also referred to as the assessee ), is an assessee under the Act. It is a company engaged in the business of trading in job work of dying of fabrics. In the assessment proceedings for the assessment year 2010-11 Assessing Officer received information from the Investigation Wing of the Income Tax Department in Mumbai that assessee had obtained bogus purchase bills amounting to ₹ 1,14,92,970.00 from hawala operators, the details of which are as under :- Hawala Name Hawala PAN FY Amount Rs. EVERREADY MARKETING PRIVATE LIMITED AACCE2069E 2009-10 1,41,960 SAILEELA TRADING PVT LTD AAKCS4578C 2009-10 22,21,232 ASHLEY TRADERS PRIVATE LIMITED AAHCA8221H 2009-10 5,17,556 KALPATARU TRADING CO. AICPD6505H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at Mumbai which in turn had obtained the information from the Sales Tax Department, Government of Maharashtra. The information was to the effect that the eight parties from whom the purchases were allegedly made were alleged hawala dealers who had issued bogus bills totalling ₹ 1,14,92,970.00. 12. In the appellate proceedings before the first appellate authority, it was held as under :- 2.15 The facts in the present case shows that the appellant was not in a position to prove the existence of the suppliers. The suppliers were found to be engaged in providing bogus bills without actual delivery of goods. Moreover few of the suppliers are not regular parties and they were found to have supplied only during the year and there were no supply either in the earlier year or in the subsequent year from such parties. This circumstantial evidence also prove the bogus nature of the transaction. On careful analysis of the finding of Hon ble High Court of Gujarat in the above mentioned cases, I am of the firm view that without purchase of materials it was not possible for the appellant to complete the job work of dying. As mentioned above the AO had never disputed or examined th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inflation in the amount of purchases made by the assessee. The disallowance sustained by the Ld. CIT(A) @ 17.5% of the purchases have been accepted by the assessee with a view to bury the litigation. Nothing has been brought before us by the Ld.DR to contradict the findings recorded by the Ld.CIT(A). The assessee s counsel has also placed reliance upon the judgment of Hon ble Bombay High Court in the case of CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. (supra) wherein similar issue has been decided on identical lines by the Hon ble Bombay High Court. In our view, no intervention is required in the findings of Ld.CIT(A) and, therefore, the same is confirmed. The grounds raised by the revenue are dismissed. 15. Thus, Tribunal concurred with the view taken by the CIT(A) that the Assessing Officer had erred in disallowing the entire total purchases and adding the same to the total income of the assessee. View taken by the CIT(A) that 17.5% of the purchases be added to the total income of the assessee as the profit element was a reasonable one. It was also noted that the said percentage was accepted by the assessee with a view to close the litigation. Nothing was brought on record b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authorities. 19. This Court in the case of Commissioner of Income Tax -1, Mumbai v/s. Nikunj Eximp Enterprises(P.) Ltd., 372 ITR 619; wherein an identical fact situation arose did not interfere with the order passed by the Tribunal and held that no substantial question of law arose from such order. It was held that merely because the suppliers had not appeared before the Assessing Officer, no conclusion could be arrived at that the purchases were not made by the assessee. 16. Today while dealing with Income Tax Appeal No.1330 of 2017 (Principal Commissioner of Income Tax Vs. Rishabhdev Tachnocable Limited), we have held as under: 19. On thorough consideration of the matter, we do not find any error or infirmity in the view taken by the Tribunal. The lower appellate authorities had enhanced the quantum of purchases much beyond that of the Assessing Officer i.e., from ₹ 24,18,06,385.00 to ₹ 65,65,30,470.00 but having found that the purchases corresponded to sales which were reflected in the returns of the assessee in sales tax proceedings and in addition, were also recorded in the books of accounts with payments made through account payee ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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