Case Law Details
ACIT Vs Shri Akshay Rajesh Samdariya (ITAT Pune)
The solitary issue raised in the appeal by the Revenue and Cross objections by the assessee is against addition deleted/confirmed on account of bogus purchases. The Assessing Officer in re-assessment proceedings made addition of Rs. 2,78,55,984/- as bogus purchases purportedly made by the assessee. In first appeal proceedings, the CIT(A) restricted the addition to 3% of the said purchases, i.e. Rs. 8,35,680/-. A perusal of the impugned order shows that the assessee has failed to produce documentary evidence in the form of Lorry receipts, weighment slips, Octroi receipts etc. The assessee has failed to substantiate movement of goods from the suppliers to the assessee. The Assessing Officer during assessment proceedings has not discarded total sales of the assessee. In other words, the sales of the assessee have been accepted by the Department. Without purchases, there cannot be sales. Thus, entire alleged bogus purchases cannot be added in the hands of the assessee. Under such circumstances, the possibility of assessee purchasing the goods from grey market and procuring bills from the Hawala dealers cannot be ruled out. The CIT(A) after considering catena of judgments on various facets including the GP ratio to be applied in different set of industries estimated 3% of GP addition on account of bogus purchases in the hands of the assessee. We find the impugned order is reasoned and hence, requires no interference.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-1, Aurangabad dated 27-06-2016 for the assessment year 2009-10 in restricting the addition on account of the bogus purchases to 3% of the total bogus purchases. The assessee has filed cross objections against the order of Commissioner of Income Tax (A)-1, Aurangabad in confirming the addition of Rs. 8,35,680, i.e. 3% of the alleged Hawala purchases.
2. Briefly, the facts of the case, as emanating from records are; the assessee is an individual engaged in the business of trading in MS Steel, MS Scrap, MS Ingots, MS bars, etc. The assessee filed his return of income for the impugned assessment year on 23-09-2009 declaring total business income of Rs. 3,10,520/-. The assessment order under section 143(3) was passed in the case of assessee on 12-12-2011 determining the total income at Rs.5,49,701/-. Thereafter, the Department received information from the Maharashtra Sales Tax Department that the assessee has indulged in bogus purchases from Hawala operators. On the basis of said information received, the Assessing Officer reopened the assessment and issued notice under section 148 of the Income Tax Act, 1961 (hereinafter referred to as, “the Act”) on 23-04-2013. In the re-assessment proceedings, the assessee failed to substantiate that the purchases made from the alleged Hawala dealers were infact genuine. The Assessing Officer made independent enquiries and collected information under section 133(6) of the Act. On the basis of information collected and the information received from the Sales Tax Department, the Assessing Officer held that the assessee has indulged in bogus purchases to the tune of Rs.2,78,55,984/- from the following parties :
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