Assessee's Appeals Partially Allowed: Delay Condoned, Purchase Addition Limited, Insurance Payment Dismissed

The Tribunal allowed the assessee's appeals in part, condoning the delay in filing appeals for A.Y. 2010-11 and 2011-12. The addition on account of unproved purchases for A.Y. 2010-11 was limited to 12.5% of disputed purchases due to the nature of the construction business. However, the addition of insurance payment for A.Y. 2011-12 was dismissed as the payments were deemed personal liabilities of the Directors and not incurred exclusively for the business.

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Issues:
1. Delay in filing appeals and condonation of delay.
2. Addition on account of unproved purchases for A.Y. 2010-11.
3. Addition of insurance payment for A.Y. 2011-12.

Delay in filing appeals and condonation of delay:
The appeals were filed by the assessee challenging orders passed by the Commissioner of Income Tax (Appeals) for A.Y. 2010-11 and 2011-12. The appeals were delayed by 177 days, and the assessee sought condonation of delay due to oversight in filing the appeals. The Tribunal, after considering the reasons provided and settlement reached in insolvency proceedings, condoned the delay and proceeded to decide the appeals on merits.

Addition on account of unproved purchases for A.Y. 2010-11:
The assessee challenged the addition made by the Assessing Officer on account of purchases through bogus bills. The Tribunal noted that the assessee failed to provide evidence of actual utilization of material from the alleged purchases. However, considering the nature of the construction business and the need for construction material, the Tribunal restricted the addition to 12.5% of disputed purchases. The decision was based on the business activities of the assessee and the possibility of revenue leakage, aligning with a judgment of the jurisdictional High Court.

Addition of insurance payment for A.Y. 2011-12:
The assessee raised grounds regarding the addition of insurance payment on the policy of the Directors. The Tribunal upheld the decision of the CIT(A) that such payments were personal liabilities of the Directors and not wholly and exclusively incurred for the construction business. Therefore, the addition on account of insurance payment was dismissed.

In conclusion, both appeals by the assessee were partly allowed, with the addition on account of unproved purchases for A.Y. 2010-11 being restricted to 12.5% of disputed purchases and the addition of insurance payment for A.Y. 2011-12 being dismissed.

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