2021 (8) TMI 147

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....nvolved in both the appeals is identical, these appeals are taken up together for adjudication and are decided by this common order. ITA NO.7976/MUM/2019 -A.Y.2009-10: 2. Shri Bhadresh Doshi appearing on behalf of the assessee submitted that the assessee is a trader in hardware items, pipe fittings, iron and steel and electric goods. The assessment for assessment year 2009-10 was reopened on the ground that the assessee had obtained bogus purchase bills aggregating to Rs. 21,47,588/- from various dealers declared as hawala operators. Further, the Assessing Officer made adhoc disallowance of 30% to 40% of business expenditure, viz. accounting charges, audit fees, commission expenses, conveyance and travelling charges, freight and trans....

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....neness of purchases and authenticity of the dealers. With regard to disallowance of business expenses the ld. Departmental Representative submitted that the assessee has failed to furnish relevant documentary evidence substantiating expenditure claimed. Hence, the Assessing Officer made disallowance of 30% of such expenditure. The CIT(A) has reduced it to 20%, the order of CIT(A) is fair and reasonable. 4. Both sides heard, orders of authorities below examined. Undisputedly, the assessee has failed to substantiate genuineness of purchases made from alleged hawala operators. At the same time the sales turnover declared by the assessee has been accepted by the Assessing Officer. In such like transactions it is only the profit element embed....

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....t examined the books or the relevant documents. The disallowance has been made merely on surmises and conjectures, without pointing short comings in the books and supporting documents maintained by the assessee. The CIT(A) has reduced disallowance to 20% again on estimations. We find no cogent reason to sustain disallowance in respect of business expenditure, accordingly, the same is directed to be deleted. The assessee succeeds on ground No.2 of the appeal. 6. In the result, appeal of the assessee is partly allowed. ITA No.7977/Mum/2019-A.Y.2010-11: 7. The ld.Authorized Representative of the assessee submitted that the solitary ground raised in the appeal is with respect to disallowance made on account of bogus purchases. The Asse....

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....he same is restricted to 12.5% for the reasons stated in the detailed order for assessment year 2009-10. 10. The ld.Authorized Representative of the assessee has pointed that there is an error in the amount of bogus purchase mentioned in assessment order and impugned order. We find that in the assessment order the addition on account of bogus purchases has been made at Rs. 16,92,657/-. The contention of the assessee is that the addition has been made on account of bogus purchases from three dealers, wherein the aggregate of amount involved is Rs. 97,154/-. This error was pointed by the assessee before the CIT(A). The CIT(A) sought remand report from the Assessing Officer. However, the CIT(A) failed to consider the remand report. The rele....