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TMI Blog2021 (3) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Shri Sanjay S. Sethi ORDER PER C.N. PRASAD (JM) 1. These appeals are filed by the revenue against common order of the Learned Commissioner of Income Tax (Appeals) 34, Mumbai [hereinafter in short Ld.CIT(A) ] dated 25.04.2019 for the A.Ys. 2009-10 2010-11 in restricting the addition @25% of purchases as against the disallowance of 100% of purchases as non-genuine/bogus by the Assessing Officer. 2. Briefly stated the facts are that, assessee engaged in the business of manufacturing of electromagnetic clutch and clutch breaks filed return of income on 28.09.2010 and 29.09.2010 declaring income of ₹.24,47,749/- and ₹.24,39,165/- for the A.Ys: 2009-10 and A.Y. 2010-11 respectively, and the returns were proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ray market. It is the finding of the Assessing Officer that assessee faled to produce the party along with relevant evidences to substantiate the genuineness of the transactions. Assessing Officer observed that the notices issued u/s. 133(6) of the Act to the party returned unserved with a remark unserved/unclaimed and the assessee has not produced the parties before the Assessing Officer. Therefore, Assessing Officer treated 100% of the alleged bogus purchases of ₹.2,94,138/- and ₹.5,56,463/- for the A.Y. 2009-10 and A.Y. 2010-11 respectively as non-genuine and added to the income of the assessee. On appeal the Ld.CIT(A) considering the evidences and various submissions of the assessee restricted the disallowance to an ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant itself in its trading, manufacturing or non-trading activities, the entire addition can be made as it only goes to inflate the expenses of the appellant, (refer M/s. Shoreline Hotel Pvt. Ltd vs. CIT Central-1 in ITA N0.964/M/2015 dated 19.06.2015). 4.6. In view of the above, it is an admitted fact that Sales Tax Department has conducted search and seizure operation and has established large number of companies/firms/partnership concerns as hawala dealers who are engaged in accommodation entries without actually supplying the goods. The appellant is one of the beneficiary and has received such accommodation bills from four of the hawala operators totaling to ₹ 2,94,138/-. The A.O. attempted to verify the party by making in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Vijay Protein (supra) is a judgment related to manufacturing concern where all the documents were threadbare analyzed and 25% disallowance on purchase was upheld. Here, the Hon ble Court has held that disallowance of 25% of the purchases from such hawala dealers will be justified based on the premise that the appellant have derived benefit to this extent based on his nature of business. Thus, the disallowance of purchase is upheld in principle. However, the disallowance made by the AO is restricted to 25% of the purchases claimed to have been made. Thus the ground of appeal raised by the appellant is partly allowed. 4.7. In the result, the appeal for A.Y.2009-10 is partly allowed. B. A.Y.2010-11 (I.T.No.272): 1.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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