B IN INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , BEFORE SRI MAHAVIR SINGH, JM AND SRI M BALAGANESH, AM ITA No. 3807/Mum/2018 (Assessment Years 2009-10) Netel (India) Limited Dy. Commissioner of Income 3rd Floor, Liberty Building, Sir Tax, Circle-3, Vithaldas Thackersey Marg, Office of DCIT, Circle -3, 6th Mumbai-400020 Floor, B-W ing, Room No.2, Ashar Vs. IT Park, Road No. 16Z, Wagle Estate, MIDC Thane (W ) (Appellant) (Respondent) PAN No. AABCN8692H Appellant by : Shri Rahul Hakani, AR Respondent by : Ms. N Hemalatha, DR Date of hearing: 21.08.2019 Date of pronouncement : 21.08.2019 ORDER PER MAHAVIR SINGH, JM: This appeal of assessee is arising out of order of Commissioner of Income Tax (Appeals)]-2, Thane, [in short CIT(A)], in ITA No. CIT(A)-564/2015-16 dated 27.03.2018. Assessment was framed by Asst. Commissioner of Income Tax, Circle-3, Thane (in short ACIT/ AO) for A.Y. 2009-10 vide order dated 27.02.2015, under section 2 ITA No . 3807 / Mum /2018 143(3) read with section 147 of Income-tax Act, 1961 (hereinafter Act ). 2. only issue in this appeal of assessee is against order of CIT(A) confirming addition of alleged bogus purchases. For this assessee has raised following three grounds: - 1. On facts and circumstances of case and in law, Learned CIT(A)-2, Thane erred in confirming addition of Rs 21,03678/- on account of alleged bogus purchases based on opinion that purchases are not genuine as per suspicious list of Sales Tax Department, in spite of producing sufficient evidences in support of claim of purchases by Appellant and only on ground that supplier was not produced before Assessing Officer. 2. On facts and circumstances of case and in law Learned CIT(A) further failed to appreciate Appellant had incurred losses during year more than alleged bogus purchases and even carried forward losses of year were not utilised for set off subsequently, and it lapsed, hence there was absolutely no necessity or any reason for Appellant to indulge in activity of bogus purchases as alleged by department. 3. Without prejudice to above ground on facts and circumstances of case and in law 3 ITA No . 3 8 07 / Mu m /2 0 18 Learned CIT(A) further erred in confirming 100% disallowance of purchase Rs. 21,03,678/- as against 25% / 12.5% disallowance of unverifiable purchases as upheld by various courts and tribunals. 3. We have heard rival contentions and gone through facts and circumstances of case. We noted that AO made addition of bogus purchases made by assessee from Mani Bhadra Sales Pvt. Ltd. amounting to 21,03,678/- for reason that department received information from Sales Tax Department of Maharashtra that assessee is beneficiary of bogus bills issued by this party. AO required assessee to produce relevant evidences, assessee produced ledger account of party, payment by cheque but no document such as octoroi receipt, transportation details etc. were produced. Therefore, AO made entire bogus purchases as bogus and added under section 69C of Act amounting to 21,03,678/-. Aggrieved assessee preferred appeal before CIT(A). CIT(A) confirmed addition on basis that assessee is unable to prove consumption of items because assessee is contractor. 4. Even now before us, learned Sr. Departmental Representative stated that assessee is unable to prove consumption and in case assessee prove consumption, matter can be decided by applying profit rate. 5. On other hand, learned Counsel for assessee filed copy of consumption register and stock register. When enquired, learned Counsel for assessee pointed out that matter can be restored back to file of AO for limited verification whether assessee has consumed material purchased from Mani Bhadra Sales Pvt. Ltd. and in that eventuality, assessee would prove that these material of 4 ITA No . 3 8 07 / Mu m /2 0 18 purchases were consumed or not. Admittedly, assessee is manufacturer of analytical, environmental pollution monitoring instruments, Waste Water Treatment Applications, and services for monitoring and control of quality of gases, liquids, air and water. If, assessee made purchases from om Mani Bhadra Sales Pvt. Ltd, he has to show that material purchased were consumed from manufacturing of assessee. In case, assessee proves that these items are consumed, no disallowance can be made. In term of above, matter is restored back to file of AO. 6. In result, appeal of assessee is allowed for statistical purposes. Order pronounced in open court on 21.08.2019. Sd/- Sd/- (M BALAGANESH) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) , Mumbai, Dated: 21.08.2019 , Sudip Sarkar, Sr.PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy (Asstt. Registrar) , ITAT, Mumbai Netel (India) Limited v. Dy. Commissioner of Income-tax, Circle-3, Thane