2021 (1) TMI 1063

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....he assessment orders passed u/s 143 (3) r.w.s 147 of the Income Tax Act, 1961 (for short the 'Act'). ITA No. 4604/MUM/2019 (Assessment Year: 2010-11) 2. Brief facts of the case are that the assessee company engaged in the business of manufacturing and producing tubes, pipes, pipefitting components and accessories, filed its return of income for the assessment year under consideration declaring total income of Rs. 37,070/- under the normal provisions of Act and book profit u/s 115JB of the Act at Rs. 37,069/-. The return was processed u/s 143 (1) of the Act. Subsequently, on the basis of information received from Sales Tax Authorities that the assessee had obtained bogus bills amounting to Rs. 15,16,320/- from M/s N.B. Enterprises, a bogu....

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....ng Officer on account of alleged bogus purchases may please be deleted." 4. The only grievance of the assessee is that the Ld. CIT (A) has wrongly sustained the addition of 25% of the total amount of bogus purchases determined by the AO. The Ld. counsel for the assessee submitted before us that the Ld. CIT (A) has merely relied on the statements of the alleged hawala operator and affidavit submitted before the Sales Tax Department. The Ld. counsel further submitted that since the assessee had furnished the details of the party concern and other documents including invoices raised by the party, ledger account for relevant period, delivery challan and copy of bank account statement to establish the genuineness of the transaction, the Ld. CI....

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....) 119 ITD 169 (Ahmedabad (TM). 6. We have heard the rival submissions of the party and perused the material on record including the cases relied upon by the parties. The AO has made addition of the total amount of the alleged bogus purchases for the reason that the assessee has failed to furnish stock register for the relevant period and the assessee has failed to produce the supplier before the AO. As mentioned by the AO, during the course of assessment proceedings summons u/s 131 of the Act was issued to M/s N.B. Enterprises on the address furnished by the assessee company. However, the same was returned unserved with the remarks 'not known'. Further, the Director of the assessee company was asked to produce the party, however, the asse....

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....onance with the judgment of the Hon'ble Gujarat High Court. Hence, we do not find any merit in the contention of the revenue that the Ld. CIT (A) ought to have sustained the addition made by the AO. The cases relied upon by the Ld. AR are distinguishable on facts and the ratio laid down in the said cases are not applicable to the present case. Hence, in our considered view, the addition of 12.5% is reasonable to meet the ends of justice. We therefore, modify the findings of the Ld. CIT (A) and restrict the addition to 12.5% of the total amount of bogus purchases determined by the AO. ITA No. 3690/MUM/2019 (Assessment Year: 2010-11) 2. The revenue has challenged the impugned order passed by the Ld. CIT (A) on the following effective groun....