ITO Vs Abhay Kantilal Shah (ITAT Mumbai)
In instant case, as mentioned earlier, the assessee has filed before the AO copies of (i) bank statements for the financial year 201011, evidencing the payments made to these parties; (ii) ledger account of all the parties; (iii) purchase invoices from these parties and (iv) sale invoices as issued by the assessee against the purchases made. In such a situation, the AO could have made further verifications /enquiries. However, without making any verification /enquiry, the AO has made the full addition of Rs.5,37,112/-.
In such a situation like the above one, the Ld.CIT(A) has rightly relied on the judgment of the Hon’ble Gujarat High Court in Bholonath Poly Fab (P) Ltd. (supra) and directed the AO to estimate the profit @ 12.5% embedded in the disputed purchases of Rs.5,37,112/-.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal filed by the revenue. The relevant assessment year is 2011-12. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-55, Mumbai [in short ‘CIT(A)’] and arises out of assessment u/s. 143(3) r.w.s. 147 of the Income Tax Act. 1961(the Act). Though the case was fixed for hearing on 21/09/2020, neither the assessee nor his Authorized Representative (AR) appeared before the Tribunal on the above date. As there is non-compliance by the assessee, we are proceeding to dispose-off this appeal after examining the materials available on record and after hearing the Ld. Departmental Representative (DR).
2. Briefly stated the facts of the case are that the assessee filed his return of income for the AY 2011-12 on 28/09/2011, declaring total income of Rs.3,09,541/-. The assessee is engaged in the business of resale of iron & steel and he is the sole proprietor of Abhay K.Shah & Co. The Assessing Officer (AO) received information from the Director General of Income Tax (Inv.), Mumbai that the assessee had made bogus purchases from the following hawala parties during the FY 2010-11 relevant to the AY 2011-12
