ITA No. 6164/Mum/2018 AY 2010-11 Shri Govindram H. Dupra - IN INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE HON BLE SHRI MAHAVIR SINGH, JM AND HON BLE SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. No.6164/Mum/2018 (Assessment Year:2010-11) ACIT-32(1) Shri Govindram H. Depra Room No.209, 2nd Floor Gala No.1, H.T. Desai Comp. C-11, Pratyakshkar Bhavan Vs. S.P. Road, Dahisar East BKC, Bandra East Mumbai-400068. Mumbai-400051. PAN/GIR No. ADSPD2752K (Appellant) : (Respondent) Revenue by : Shri Ashutosh Rajhans-Ld.DR Assessee by : None : 12/09/2019 Date of Hearing : 12/09/2019 Date of Pronouncement ORDER Per Bench: - 1. Aforesaid appeal by revenue for AY 2010-11 contest order of Ld. Commissioner of Income-Tax (Appeals)-45, Mumbai, [in short referred to as 2 ITA No. 6164/Mum/2018 AY 2010-11 Shri Govindram H. Dupra CIT(A) ], Appeal No. CIT(A)-45/ACIT-32(1)/ITA-13/2017-18 dated 18/07/2018 on following grounds of appeal: - (1) "On facts and in circumstances of case and in law, Ld. CIT(A) erred in restricting addition to Rs.2,09,437/- @ 12.5% of Rs.16,75,498/- on account of bogus purchases, without appreciating fact that Sales Tax Department has proved beyond doubt that parties declared as hawala traders were involved in providing accommodation entry of purchases and assessee was one of beneficiary of accepting accommodation or purchase." (2) " On facts and in circumstances of case and in law, Ld. CIT(A) erred in not appreciating fact that assessee failed to provide copy of bills from 6 parties and neither could produce them for verification, in spite of opportunity provided by AO." (3) "On facts and in circumstances of case and in law, Ld. CIT(A) erred in not appreciating ratio of decision of Gujarat High Court in case of N.K. Proteins Ltd. wherein it was confirmed that in event of bogus purchases, addition on whole of such purchases was required to be made and this particular ratio was confirmed by Hon'ble Supreme Court in SLP No. CC No.769 of 2017 dated 16.01.2017, by dismissing SLP of that assessee." (4) "The appellant prays that order of CIT(A) on above grounds be set side and that of AO be restored." None has appeared for assessee and therefore, matter is proceeded with ex-parte qua assessee. 2.1 Facts on record would reveal that assessee being resident individual stated to be engaged in labour job work under proprietorship concern namely M/s Bhagwati Interiors, was assessed for impugned AY u/s. 143(3) on 15/03/2013 wherein income of assessee was determined at Rs.42.18 Lacs after addition of alleged bogus purchases for Rs.16.75 Lacs as against returned income of Rs.25.43 Lacs e-filed by assessee on 29/09/2010. 2.2 During assessment proceedings, it transpired that assessee made purchases aggregating to Rs.16.75 Lacs from 7 entities, details of which have already been extracted at para-4.1 of quantum assessment order. These entities were listed as suspicious dealers by Sales Tax Department, 3 ITA No. 6164/Mum/2018 AY 2010-11 Shri Govindram H. Dupra Govt. of Maharashtra. Accordingly, assessee was directed to substantiate purchases made from above entities. 2.3 assessee defended purchases, inter-alia, by submitting that payments were through banking channels. However, assessee failed to produce any of supplier for confirmation of transactions. Hence, not satisfied, aforesaid purchases were disallowed and added to income of assessee. learned CIT(A), after considering factual matrix, restricted additions to 12.5% of these purchases. Aggrieved, revenue is in further appeal before us. It appears that assessee has not appealed any further. 3. We have heard and considered arguments made by Ld. DR. 4. We are of considered opinion there could be no sale without actual purchase of material keeping in view assessee s nature of business. assessee was in possession of primary purchase documents and payments to supplier was through banking channels. sales turnover reflected by assessee has not been disturbed / disputed by Ld. AO. However, at same time, assessee miserably failed to substantiate purchases and could not produce any of supplier to confirm transactions. Under such circumstances, additions which could be sustained, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in grey market and undue benefit of VAT against such bogus purchases, which Ld. first appellate authority has rightly 4 ITA No. 6164/Mum/2018 AY 2010-11 Shri Govindram H. Dupra done. Therefore, finding no infirmity in estimation made by Ld. CIT(A), we dismiss appeal. 5. In result, appeal stands dismissed. Order pronounced in open court on 12th September, 2019. Sd/- Sd/- (Mahavir Singh) (Manoj Kumar Aggarwal) Judicial Member Accountant Member Mumbai; Dated : 12/09/2019 Sr.PS:-Jaisy Varghese ( Copy of Order forwarded to : 1. Appellant 2. Respondent 3. CIT(A) 4. CIT concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt.Registrar) , ITAT, Mumbai. ACIT-32(1), Mumbai v. Govindram H. Depra