Tribunal upholds addition of alleged bogus purchases for AY 2009-10, based on Sales Tax Department information.

The Tribunal dismissed the assessee's appeal against the addition of alleged bogus purchases for Assessment Year 2009-10, upholding the decision of the Ld. Commissioner of Income-Tax (Appeals). The reassessment was initiated based on information from the Sales Tax Department, Maharashtra, identifying the assessee as a beneficiary of transactions involving bogus purchase bills. Despite the assessee's claims and evidence, the Tribunal upheld the addition, affirming the 12.5% disallowance made by the Ld. CIT(A) and ruling in favor of the revenue, in line with a previous Tribunal decision.

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Issues:
Appeal against addition of alleged bogus purchases for Assessment Year 2009-10.

Analysis:
The appeal by the assessee for Assessment Year 2009-10 challenges the order of the Ld. Commissioner of Income-Tax (Appeals)-2, Mumbai, dated 26/02/2016. The assessment for the impugned year was conducted by the Ld. Income Tax Officer-1(1)(1) u/s 143(3) read with Section 147 of the Income Tax Act, 1961. The primary issue in the appeal revolves around the addition against certain alleged bogus purchases made by the assessee.

The facts leading to the issue indicate that the assessee, a resident corporate entity engaged in Trading of Iron & Steel, was assessed for the impugned year at Rs. 10,71,88,997/- after the addition of certain bogus purchases amounting to Rs. 10,70,45,159. The reassessment proceedings were initiated based on information received from the Sales Tax Department, Maharashtra, regarding dealers involved in bogus purchase bills, with the assessee being identified as a beneficiary of such transactions from four parties. Despite the assessee's claims of the purchases being genuine and providing supporting documents, notices and summons to alleged bogus suppliers remained un-served, leading the Ld. AO to disallow the purchases and add the amount to the assessee's income.

Upon contesting the decision before the Ld. CIT(A), the assessee achieved partial success as the disallowance was restricted to 12.5%. However, unsatisfied with the outcome, the assessee appealed further. During the appellate proceedings, the Ld. Departmental Representative highlighted the revenue's challenge to the Ld. CIT(A)'s decision in a previous Tribunal case, where the addition was deemed reasonable, leading to the dismissal of the revenue's appeal. In line with the previous Tribunal's decision, the current Tribunal dismissed the assessee's appeal, upholding the addition as reasonable.

In conclusion, the Tribunal, based on the previous decision and co-authored by one of the judges, dismissed the assessee's appeal, thereby affirming the addition of alleged bogus purchases. The order was pronounced on 07th February 2018.

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