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TMI Blog2024 (6) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... raised the following grounds of appeals: 1. The learned CIT (A) has erred in directing that the disallowance of the purchases of Rs. 4,26,18,638/- be retained to the extent of 100% by incorrectly observing that appellant had made bogus purchase from 5 parties as mentioned in the assessment order. 2. The learned CIT (A) has erred in confirming the disallowance @100% of Rs. 4,26,18,638/- being purchases by treating them as bogus purchase by merely relying on observation made by the learned assessing officer that he had received information from sales tax department and DGIT (Investigation) that the assessee has accepted bogus accommodation entry which is incorrect and ignoring the fact these are merely internal enquiries carried out by Sale Tax Authorities, in respect of third parties. 3. The learned CIT (A) has erred in confirming the disallowance without appreciating the fact that addition has been made merely on presumptions and without bringing any adverse material on record and conclusive findings to prove that purchases are non genuine. 4. The learned CIT (A) has erred in confirming the disallowance without appreciating the fact that sales reported by the appellant have not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbai to the effect that the Appellant had obtained the accommodation entries of bogus purchases aggregating to INR 4,26,18,638/- from the following five parties: Name Amount(INR) 1. Siddhivinayak Trading Company 27,87,440/- 2. Mehta Steel Corporation/Mahavir Fabrication 72,37,080/- 3. Coral Trading Co 9,48,314/- 4. Roopam Impex 90,65,555/- 5. R J Corporation 2,43,70,692/- Total 4,26,18,638/- 4. On the basis of the above information, reassessment proceedings under Section 147 of the Act were initiated which culminated into Assessment Order, dated 16/03/2015, passed under section 143(3) read with section 147 of the Act whereby the income of the Appellant was assessed at INR 70,31,750/- after making disallowance of INR 63,92,796/- being profit element embedded in alleged bogus purchases of INR 4,26,18,638/- computed at the rate of 15%. 5. Being aggrieved, the Appellant carried the issue in appeal before CIT(A). Vide order, dated 16/10/2019, the CIT(A) dismissed the aforesaid appeal preferred by the Appellant and enhanced the addition from 15% to 100% of alleged bogus purchases. 6. Being aggrieved by the order passed by CIT(A), the Appellant has preferred the present appeal on the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 after a delay of 1255 days. On the basis of the aforesaid, the Ld. Authorised Representative for the Appellant submitted that the delay caused in filing the appeal was neither intentional nor deliberate and was caused by bonafide mistake on the part of the Appellant and the tax consultant. Further, the Appellant was mentally disturbed as he was dealing with his own ill health, and the grief of demise of his father. He further submitted that in case the period during which the lockdown was imposed is excluded, the delay in filing the appeal would get reduced substantially. The Ld. Authorised Representative for the Appellant vehemently submitted that the Appellant was not able to file the appeal in time on account of bonafide reasons, which have been explained by the Appellant, and requested the delay in filing the appeal be condoned. Advancing arguments on merits, the Authorised Representative for the Appellant submitted the Appellant has a good case for not sustaining addition made at the rate of 100% of the purchases by placing reliance upon the decision of the Mumbai Bench of the Tribunal in Appellant s own case for the Assessment Years 2010-11 and 2011-12. 9. Per Contra, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the totality of facts and circumstances leading to the filing of the appeal, we are of the view that the delay in filing of the appeal needs to be condoned in view of the explanation furnished by the Appellant which we find to be sufficient and reasonable. In the case of Collector of Land Acquisition Vs. Mst. Katiji others AIR 1987 1353 (SC), the Hon ble Supreme Court has emphasized that substantial justice should prevail over technical considerations. The requirement that every day s delay must be explained does not mean that a pedantic approach should be adopted. The aforesaid doctrine must be applied in a rational common sense manner by adopting a pragmatic approach, and more so, in circumstances where a litigant does not stand to benefit by lodging the appeal late as is the case before us. Accordingly, keeping in view the facts and circumstances of present case, we condone the delay of 1255 days in filing the present appeal and proceed to decide the appeal on merits. 12. It is admitted position that, vide common order dated 23/03/2023, passed by the Tribunal in the case of the Appellant in appeals for Assessment Year 2010-11 (ITA No. 112/Mum/2023) and Assessment Yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Representative prayed for upholding the findings of the CIT(A). 6 Both sides heard, orders of the authorities below examined. Undisputedly, the assessee failed to furnish documentary evidence to prove genuineness of unproved purchases made from alleged hawala entry providers. In fact, the assessee has neither appeared before the Assessing Officer nor the CIT(A) to discharge his onus in proving genuineness of the suspicious dealers and purchases. The Assessing Officer and the CIT(A) estimated suppressed G.P on unproved purchases Admittedly, the Assessing Officer has accepted the sales turnover and inventory declared by the assessee. In such circumstances, it is only the element of suppressed profits that has to be brought to tax [Re. PCIT vs. Paramshakhti Distributors Pvt. Ltd. in Income Tax Appeal No.413 of 2017 decided on 15/07/2019 by Hon'ble Bombay High Court.) in trading of ferrous and non-ferrous metals, generally, the G.P ranges between 5% to 8%. Considering the entire facts of the case, we modify the order of CIT(A) and restrict the addition to 7.5% of the unproved purchases. We hold and order accordingly. 7. In the result, appeal by the assessee is partly allowed. (Em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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