2020 (12) TMI 206

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....d 16/03/2016 by the ld. Income Tax Officer 9(2)(2), Mumbai (hereinafter referred to as ld. AO). 2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in directing the ld. AO to tax only the profit element embedded in the bogus purchases @12.5% in the facts and circumstances of the instant case. 3. We have heard the ld. DR. None appeared on behalf of the assessee. We find that assessee is engaged in the business of supply of chlorination equipments and chlorination plants and had filed its income tax return for the A.Y.2011-12 on 16/09/2011 declaring total income of Rs. 1,33,16,244/-. Based on the information received from the Sales Tax Department of the Government of Maharahtra and the Income Tax....

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....d is under the belief that he has received the Goods ordered by him along with a genuine bill for the same. Assessee has submitted all the invoices in connection with above said parties and bank statement showing payment to such parties via account payee cheques and detailed explanation stating that said materials were used in the manufacturing and consumed and subsequently invoice has been raised supplying manufactured goods as per the order of the customer. Now assessee / broker is not aware about the latest whereabouts of the suppliers and they are no more our supplier now so under such circumstances assessee is not able to produce that party and whatever purchases are made should be treated as genuine and used in the manufacturing pr....

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....rials purchase but the assessee was not able to produce the parties for verification about the genuineness of the purchases made. To this extent, the ld. CIT(A) observed that the assessee had not discharged the burden of proof that cast on him. We find that the ld. CIT(A) observed that the parties in question were non-existent which fact had not been able to be disapproved by the assessee. The ld. CIT(A) also observed that the ld. AO was not able to give any adverse finding to the fact that assessee had not shown consumption / sales of the goods in respect of purchases made from the aforesaid parties. Since, the fact of consumption / sales had not been doubted by the ld. AO in the instant case, the ld. CIT(A) resorted to estimate the profit....