Income-tax Officer, V. M/s. Rajamukha Steel and Alloys Ltd., Jalna

ITA 1341/PUN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8783 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-01-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 17-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Bogus purchase; Rejection of books of accounts
• Section: 143(3); 133(6)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1341/PUN/2016 / ASSESSMENT YEAR : 2011-12 THE INCOME TAX OFFICER, WARD-2, JALNA. . / APPELLANT V/S M/S. RAJAMUKHA STEEL AND ALLOYS LIMITED, PLOT NO.D-52/7, JALNA 431203. PAN AAECR6187Q. . / RESPONDENT ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) REVENUE BY : SHRI PANKAJ GARG. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY ASSESSEE IS EMANATING OUT OF THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS) 1, AURANGABAD DAT ED 17.03.2016 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE MAN UFACTURING OF MS INGOTS. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF IN COME FOR A.Y. 2011-12 ON 30.09.2011 DECLARING TOTAL INCOME OF RS.3,89,191/ -. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMEN T WAS FRAMED U/S / DATE OF HEARING : 05.02.2019 / DATE OF PRONOUNCEMENT: 04.04.2019 2 ITA NO.1341/PUN/2016 143(3) OF THE ACT VIDE ORDER DT.27.09.2011 AND THE TOTAL INC OME WAS DETERMINED AT RS.4,36,16,840/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.17.03 .2016 (IN APPEAL NO.ABD/CIT(A)/122/2014-15) GRANTED SUBSTANTIAL RELIE F TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS JUSTIFIED IN TO DELETE ADDITION OF RS . 21,08 , 930/- MADE BY AO AS SUPPRESSED PRODUCTION EVEN AFTER AO THE ADDIT ION WERE MADE ON SOUND FOOTING BASED ON CATEGORICAL FINDS WITH DA TA AND EVIDENCES INCLUDING CIRCUMSTANTIAL EVIDENCES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E WHETHER THE CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FACT T HAT DATA COLLECTED BY AO ARE VERY IMPORTANT IN ARRIVING AT THE ACTUAL PRO DUCTION . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E WHETHER THE CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FACT T HAT FINDING MADE BY AO THAT LETTERS 133(6) NOTICES ISSUED BY AO TO RAW MATERIAL SUPPLIER OF COMPANY ARE RETURNED BACK AND ADDITION MADE BY AO A T RS . 4,11,18,717/- ON ACCOUNT OF BOGUS PURCHASES ARE CO RRECT . 3. THE CASE FILE REVEALS THAT NONE ATTENDED ON BEHALF OF A SSESSEE DESPITE ISSUANCE OF NOTICES. ON THE DATE OF PRESENT HEAR ING ALSO NONE APPEARED ON BEHALF OF THE ASSESSEE NOR WAS ANY ADJOURN MENT APPLICATION FILED. WE THEREFORE PROCEED TO DISPOSE OF THE APPEAL EX-P ARTE QUA THE ASSESSEE BASED ON THE MATERIAL AVAILABLE ON RECORD AND A FTER HEARING THE LD. D.R. 4. GROUNDS 1 AND 2 ARE INTER-CONNECTED AND THEREFORE C ONSIDERED TOGETHER. 4.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO CALLED FOR THE DETAILS OF MONTHLY CONSUMPTION OF RAW-MATERIAL AND FINISHED GOODS, ELECTRICITY UNIT CONSUMPTION AND SHORTAGE ETC. AND ON THE BASIS OF SUCH DETAILS RECEIVED FROM THE ASSESSEE, A CHART OF MONTHLY E LECTRICITY UNIT 3 ITA NO.1341/PUN/2016 CONSUMPTION, PRODUCTION OF FINISHED GOODS IN THE FORM OF MS INGOTS WAS PREPARED. ON THE BASIS OF SUCH ANALYSIS, AO NOTICED THAT MINIMUM ELECTRICITY UNIT CONSUMPTION PER METRIC TON OF PRODUCTION OF FINISHED GOODS OF MS INGOTS COMES TO 988 UNITS AND THE MAXIMUM ELECTRICITY UNIT CONSUMPTION PER METRIC TON COMES TO 1156 UNITS. HE T HUS NOTED THAT THERE WAS ABNORMAL DEVIATION IN ELECTRICITY UNIT CONSUMPTION TO T HE EXTENT OF 168 PER METRIC TON WHICH ACCORDING TO HIM INDICATES THA T THE ASSESSEE HAS NOT DISCLOSED THE PRODUCTION CORRECTLY. HE ALSO NOTICED THAT TH ERE WAS SUBSTANTIAL VARIATION IN THE WAGES. HE ALSO NOTICED THAT A SSESSEE HAD MAINTAINED CONSISTENCY INTO THE YIELD OF FINISHED GOODS AND BYE PRODUCT TO THE EXTENT OF 92.99% AVERAGE THE PERIOD WITH SLIGHT NEGLIGENT VARIATION AND IN THE MONTH OF NOVEMBER, 2010 YIELD WAS SHOWN AT 124.20%. CONSIDERING THE AFORESAID FACTS, HE CONCLUDED THAT THE BOO K RESULTS OF THE ASSESSEE WERE NOT FAIR AND TRUE. AO THEREFORE ASKED T HE ASSESSEE TO EXPLAIN AS TO WHY THE PROVISIONS U/S 145(3) OF THE ACT NOT BE APPLIED. THE SUBMISSIONS MADE BY THE ASSESSEE WERE NOT FOUND ACCEPT ABLE TO THE AO AS HE WAS OF THE VIEW THAT ASSESSEE HAS FAILED TO EXPLAIN THE VARIATION IN PRODUCTION OF ELECTRICITY AND CONSUMPTION OF ELECTRICITY. HE THEREAFTER REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE PROD UCTION AS PER THE WORKING MADE BY HIM. ON THE BASIS OF LOWEST CONSUMPTION OF 988.933 UNITS PER METRIC TONS OF PRODUCTION, HE WORKED OUT THE EXCESS PRODUCTION AT 1053.498 METRIC TONS. AFTER CONSIDERING THE AVERAGE SALE PRICE, AVERAGE PURCHASE PRICE AND BURNING LOSS AND NET GAIN, WORKED OUT THE SUPPRESSED PRODUCTION AT RS.21,08,930/- AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF AO, AS SESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE DELETED THE ADDITION BY FOLLOWING VARIOUS DECISION S OF THE 4 ITA NO.1341/PUN/2016 TRIBUNAL REFERRED TO IN HIS ORDER. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO BUT HOWEV ER, HE FAIRLY SUBMITTED THAT IDENTICAL ISSUE HAS BEEN DECIDED AGAINST TH E REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DECISIONS OF PUNE TRIBUNAL. 6. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO MAKING ADDITION ON ACCOUNT OF UNACCOUNTED PRODUCTION. WE FIND THAT LD.CIT(A ) AFTER CONSIDERING THE VARIOUS DECISIONS OF PUNE TRIBUNAL AS NOT ED IN THE ORDER, HAS GIVEN A FINDING THAT AO HAS LEVELED THE ALLEGATION OF UN RECORDED SALES ON THE BASIS OF SOME MATHEMATICAL EXERCISES WHICH SUFFERS FROM INACCURATE CALCULATIONS AND FURTHER THERE WAS NO CORROBO RATIVE EVIDENCE ON RECORD TO SUPPORT THE CALCULATIONS OF THE AO. HE HAS FURTHER, RELYING ON THE DECISIONS OF PUNE TRIBUNAL, HELD THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF ELECTRICITY CONSUMPTION FORMULA. H E THUS DELETED THE ADDITION. BEFORE US, REVENUE HAS NOT POINTED OUT ANY FALLACY IN THE FINDINGS OF LD.CIT(A). WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). THUS, THE GROUNDS 1 AND 2 OF THE REVENUE ARE DISMISSED. 7. 3 RD GROUND IS WITH RESPECT TO DELETING THE ADDITION OF RS.4.11 CRORE (ROUNDED OFF) ON ACCOUNT OF BOGUS PURCHASES. 7.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOT ICED THAT ASSESSEE HAD MADE PURCHASES OF RAW-MATERIAL FROM M/S. JB D ENTERPRISES TO THE EXTENT OF RS.4,11,18,717/-. HE FURTHER NOTED THA T THE AFORESAID 5 ITA NO.1341/PUN/2016 PARTY WAS IN THE LIST OF HAWALA OPERATORS AND BENEFICIARIES. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTIONS, LETTERS WERE ISSUED TO JBD ENTERPRISES. AO HAS NOTED THAT THE LETTERS WERE RETUR NED BACK BY THE POSTAL AUTHORITIES WITH A REMARK THAT THE PARTIES WERE N OT IN EXISTENCE. THE ASSESSEE WAS THEREFORE ASKED TO SUBSTANTIATE THE PURCHASES. ASSESSEE FURNISHED CONFIRMATION INCLUDING ACCOUNT EXTRACTS , COPIES OF CERTAIN BILLS AND SUBMITTED THAT THE PAYMENTS WERE MADE THROUGH BANKING CHANNELS. THE SUBMISSIONS OF THE ASSESSEE WERE N OT FOUND ACCEPTABLE TO THE AO. AO ACCORDINGLY CONSIDERED THE PURCHASES FRO M JBD ENTERPRISES TO BE BOGUS AND MADE ADDITION OF RS.4,11,18,717 /-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO DIRECTED AO TO RESTRICT THE ADDITION TO RS.5,0 0,000/- INSTEAD OF RS.4,11,18,717/- MADE BY THE AO BY OBSERVING AS UNDER : 5. I HAV E DULY CONSIDE RE D TH E SUB M ISSIO N S O F T HE A PPE LLANT . THE AO N O TICED THAT THE ASSESSEE COMPAN Y HAD MAD E PURCH A SES OF S . 4 ,1 1 ,18,71 7/- F ROM M/S. J . B.D. ENT E RPRISES AND AMOUNT OF RS . 25 ,1 0,97 9/ - WAS SHOWN AS OUTSTANDING AS ON 3 1 . 0 3 .2 011 . A CCORDING TO TH E A O, THE SAID P AR T Y WAS E NLIST E D AS A HA W ALA OP E RATOR B Y MVA T AUTHORITIES. THE A O TH E REFORE CAME TO CONCLUSION THAT TRANSACTIONS IN QU E STION WER E NOT GENUIN E . THE A O ALSO ISSUED NOTICE U/S 13 3 (6) TO TH E SAID S UPPLI E R HOW E VER IT WAS RETURNED UN-SER V ED B Y THE POSTAL DEPARTM E NT W ITH TH E RE MARK S 'INCOMPL E T E ADDR ES S'. TH E AO AFTER V ERI F ICATION O F PURCHASE BILL S NOTIC E D THAT MOVEMENT OF GOODS WAS IN DO UB T AS TH E ASSESSEE FAIL E D TO FURNISH TRANSPORT BILL S , DELI V ER Y CHALLANS, LORRY RECEIPTS, WEIGHMENT SLIPS, T OLL RECEIPTS E TC. TH E AS SE SS EE COMPAN Y INFORMED THE AO THAT THE NOTICE ISSUED B Y THE DEPARTM E NT W A S R E TURN E D BY THE POSTAL DEPARTMENT SINCE THE SUPPLIER HAD SHIFTED ITS OFFICE . IT WAS A L S O C ONTEND E D THAT THE SUPPLIER W AS NOT LISTED AS ' HA W ALA DEALER' B Y VAT AUTHORITI ES . FURTHER ALL THE PA Y MENTS TO M/S. J . B . D . ENT E RPRIS E S WERE MADE TH R OU G H B A NKING CHANN E LS. THE AO ALSO FOUND OUT THAT THE PURCHASES O F M/S. J . B.D. E NTERPRISES FROM M/S. WORTH TRAD E R S W ERE NOT G E NUINE AS S HRI IA Y KURNAR V ASUD E O M A KHWANA, PROPRIETOR O F M/S. WO R TH TRADERS H A D ADMITT E D B E FOR E THE S A L ES T AX D E PARTM E NT THAT HE HAD N EV ER SOLD ANY GOODS TO M/S. J . B . D . ENT E RPRI S ES AND ONL Y B IL LS WE R E PRO V ID E D TO IT. SIMILA R L Y T HE O THER CONC E RN S I . E . A LLI E D COR P ORATION, ZE NITH T R A DING CORPORATION, V IRESH S A LES CORPORATION , HARSHIL ENTERPRIS E S & SAHAJANAND EN TE RPRISES, FROM WHOM M/S. J.B . D . EN T ERPRISES HAD MAD E PURCHAS ES , WER E AL S O LI STE D A S HA WA LA D E ALERS . THE A O ALSO O BTAINED B A NK ST A T E MEN TS O F M/S . W OR T H TR A DERS AND M/S . HARSHIL ENTERPRISES RESPECTIVE L Y U/S 1 3 3(6) OF THE INCOM E- TA X AC T FROM SARASWAT BANK, BHA Y ANDER (WEST), T HANE AND UNION BANK OF INDIA, THANE RE S PECTIVEL Y . ON VE RIFICATION OF THESE BANK ACCOUNTS, IT WAS NOTIC E D . T HAT, IN SOM E C A SES AMO U NTS GIV E N BY THE ASSE S SEE WERE D E POSITED BY THE SUPPLI E R IN HIS BANK A C COUNT AND SUBS E QUENT L Y THE CHEQUES W E RE DECLARED IN TH E ACCOUNTS OF OTH E R H AW AIA D E AL E RS, TH E REFORE, TH E ENTIRE TRANS A C TIONS W E R E H E LD TO B E N OT G E NUI NE. SINC E 6 ITA NO.1341/PUN/2016 M/S. WORTH TRADERS WAS NAMED AS A H AWALA DEAL E R BY VAT D E PARTM E NT TH E REFOR E TH E AO H E LD THAT PURCH A SES MADE FROM M/S, J.B . D . ENTERPRI SE S WERE AL S O NOT G E NUINE . THE A O TH E REFORE CONCLUDED THAT ENTIRE PURCH A SES OF RS . 4 , L1,18,717/- MADE FROM M/S . J . B.D . ENTERPRISES WERE BOGUS AND COUPLED WITH C IRCUMSTANTIAL EV ID E NCE, TH E ADDITION WAS MADE TO THE INCOME OF THE A SSE S S E E C OMPAN Y . ON CAREFUL CONSIDERATION OF FACTS AND CIRCUMSTANCES IN THE PRESENT CASE, I AM INCLINED TO A C C E PT THE ARGUMENT S OF THE APP E LLANT COMPA NY . IT IS NO T I N D ISPUT E THAT M / S. J.B.D . E NTERPRI SE S WA S NOT NAMED A S 'SUSPICIOUS DE A LER' B Y THE M VA T A UTHORITI E S. T HOUGH F EW OF ITS SUPPLIERS NAMEL Y M / S. WORTH TRADERS, MUMBAI, PROP . IAIKUMA R V ASUDEO MAKHWANA, A LLIED CORPORATION, ZENITH TRADING CORPORATION, VIRESH SALES CORPORATION, HARSHIL ENTE RPRISES & SAHAJANAND ENTERPRISES, WERE LISTED AS HAWALA DEALER FROM WHOM P U RCHASES OF RS . 1,57 , 80 , 536 / - H AD BEEN MADE YET ITS ENTIRE PURCHASE S OF RS. 3 4 , 49 , 48,575 / - IN A Y 2011-12 COULD NOT HAVE BEEN TREATED AS H A W A LA ENTRIES / ACCOMMODATION BILLS . E V EN OTHER W ISE, ONL Y 4 . 57 % OF ITS TOT A L PURCHASES WERE TAINTED. CONSEQUENTL Y ITS ENTIRE SALE S OF RS.35,38,12,818 / - INCLUDING THAT OF RS . 4,11 , 18 , 717 / - TO THE APPELLANT COMPANY COULD NOT HAVE BEEN DUBBED AS HAWALA SALES . IN OTHE R WORDS, ITS SA L ES TO T H E EXTENT OF RS.33,80,32,282 / - WER E G E NUINE. THERE I S NO MATERIA L ON RE C ORD TO SUGGEST THAT GOODS ALLEG E DLY PURCHASED FROM M / S . WORTH TRA D ERS, ALL I E D CORPORATION , ZENITH TRADING CORP . , V IR E SH SALES CORPORATION, HARSHIL ENTERPRISES & SAHAJANAND ENTERP RI SES, HAD B EE N S OLD TO THE APPELLANT COMPANY OR IN OTHER WO R D S ACCOMMODATION BILLS W ITHOUT A C TUAL DELIVER Y OF MATERIAL HAD BEEN PASSED ON TO APPELLANT C OMPAN Y . ON TH E OTH E R HAND, TH E COUNSEL OF TH E APPELLANT HAS STATED THAT R E CEIPT OF GOODS WERE DULY RE CORDED IN EXCISE RECORDS AND UT I LIZ E D FOR PRODUCTION OF FINISH E D PRODUCTS . M / S. J . B.D . ENTERPRISES PROP . NEERAJ TILAKRAJ GARG IS STILL DOING ITS BUSIN E SS . ITS VAT, R E GISTRATION NUMBER IS STILL ACTI V E . IT IS FILING ITS VAT RETURNS AND INCOME T AX RE TURNS R E GULARL Y . THE APPELLANT COMPANY IS MANUFACTURING M . S . INGOTS WHICH IS A EX CISABL E COMMODIT Y AND THERE IS FU L L CONTRO L OV E R ITS PRODUCTION. THE APP E LLANT COMPANY IS MAINTAI N I N G STATUTORY EXCISE RECORDS . THERE I S ANOTHER ANGLE TO TH E PRESENT CONTROVERSY. THE APPELLANT FIRM HAD PURCHASED M . S. SCRAP W ORTH R S . 4 ,11 ,18,717 / - F ROM M / S . J . B . D. ENTERPRISES IN THE PERIOD BETWEEN NO VE MBER TO M AR C H, 2 011 . IN TH E A NNEXUR E -B & C ENCLOSED W ITH THE ASS E SSMENT ORD E R, THE A O HAD HIMSELF WORKED OUT CONSUMPTION OF M . S . SCRAP AT 658 3 . 6 90 M T F OR THE PERIOD I . E . NOVEMBER , 2010 TO MARCH, 201L . THE AVERAG E Y IELD OF M. S . INGOTS WAS SHOWN A T 92 % . CONSIDERING THE BURNING LO SS, IT WOU L D MEAN THAT FOR PRODUCTION OF 1 MT OF FINISH E D GOODS (1000 KG), THERE WOULD BE STANDARD R E QUIREM E NT OF 1080 KG OF R AW MAT E RI A L . IN THESE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, TH E ASS E RTION MADE B Y TH E A O ABOUT BOGUS PURCHASES HAS BEEN RENDERED USELESS AND REDUNDANT . IT IS UNDISPUT E D FACT THAT PRODUCTION CAN'T HAPPEN WITHOU T C ONSU M PTION OF RA W MATERIAL. IN VIEW OF QUANTITATIVE TALLY VERIFIED BY THE AO FOR SUPPRESSED PRODUCTION AS PER ANNEXURE-A OF THE ASSESSMENT ORDER, THERE REMAINS NO QUESTION OF BOGU S PURCHASES . TH E AO HAS NOT BEEN ABLE TO CONTRO V ERT THE ABOVE FINDING OF THE A PPELLANT . THE AO IS BLOWING HOT AND COLD AT THE SAME TIME. MOREOVER M/S . J.B . D ENTERPRISES BEING A TRADER HAD SHOWN CORRESPONDING SALES OF MAT ERIAL SO PURCHASED FROM HAWALA DEALERS I . E. M/S. WORTH TRADERS, MUMBAI, PROP. JAIKUMAR VASUDEO MAKHWANA, ALLIED CORPORATION, ZENITH TRADIN G CORPORATION, VIRESH SALES CORPORATION, HARSHIL ENTERPRISES & SAHAJANAND ENTERPRISES. IT WOULD THEREFORE IMPLY THAT M/S. J . B . D. ENTERPRISES WOULD HAVE ACTUALLY PURCHASED THE MATERIAL IN CA S H FROM THE OPEN MARKET AND ONLY BILLS WERE TAKEN FR OM THE A LLEGED HAWALA D EA L E RS. TH E VARIOUS DOCUMENTAR Y EVIDENCES IN RESP E CT OF THIS SUPPLIER N A MEL Y , COPIES OF INVOICES, LEDGER EXTRACTS, CONFIRMATIONS, BANK STATEMENTS SHO W ING PAYMENTS THROUGH BANKING CHANNE L S, COPIES OF INCOME TAX RETURNS, COPIES OF VAT R E TURNS, TIN DETAILS AND CONSUMPTION OF RAW MATERIAL AND PAYMENT OF EXCISE DUT Y ON FINISHED GOODS COULD NOT BE BRUSHED ASIDE AS DONE BY THE AO. A CCORDINGLY TH E INFERENCE DRAWN BY THE AO THAT PURCHASES OF RS.4,11 ,1 8,717 / - WERE BOGUS, IS NOT SUPPORTED BY THE 7 ITA NO.1341/PUN/2016 MATERIAL PLACED ON RECORD. MOREOVER IN THE OTHER CA SE NAMELY M/S . GO V INDAM METAL & ALLOYS PVT . LTD. FOR AY 2011-12, ON IDENTICAL FACTS, THE AO HAD ESTIMATED PROFIT OF 20 % ON SUCH BOGUS PURCHASES WHEREAS IN THE PRESENT CASE, THE ENTIRE PURCHASES HAVE BEEN ADDED BACK . THEREFORE THE ADDITION OF R S.4, 11,18,717 / - MADE BY THE A O ALSO SUFFERS FROM INCONSISTENT STAND. HOWEVER, TH E A LLEGED SUPPLIER DID NOT RESPOND TO TH E NOTI C E U/S. 13 3 (6) I S SUED B Y THE A O. TH E A LLEG E D SUPPLIER HAS ALSO TAKEN ACCOMMODATION ENTRI E S FROM THE HA W ALA DE A LERS THOUGH ONE TO ONE CORRELATION IS NOT POSSIBLE. THEREFORE TO PLUG POSS IBLE LEAKAGE OF REVENUE AND MEET ENDS OF JUSTICE, A TOKEN DISA L LOWANCE OF RS.5,00,000/- IS SUSTAINED. I ACCORDINGLY DIRECT THE AO TO RESTRICT THE ADDITION TO RS.5,00,000/- ON THIS ACCOUNT INSTEAD OF RS.4,11, 18,717/- MADE BY HIM. THIS GROUND OF APPEAL IS PARTLY ALLOWED. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 8. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO AND SUBMITT ED THAT LD.CIT(A) HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS .5 LAKHS. HE SUBMITTED THAT PUNE TRIBUNAL IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT AND OTHERS (IN ITA NO. 795/PUN/2014 FOR A.Y. 2010-11 DATED 28.04.2017) AND IN OTHER SIMILAR CASES HAS UPHELD THE ADDITION TO THE EXTENT OF 10% OF THE PURCHASES. HE THEREFORE SUBM ITTED THAT SIMILAR DIRECTIONS TO BE GIVEN IN THE PRESENT CASE. 9. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO MAKING ADDIT ION OF RS. 4,11,18,717/- TO THE TOTAL INCOME ON ACCOUNT OF BOGUS PURCHASES. W E FIND THAT AO IN THE ORDER HAS NOTED THAT ASSESSEE HAD FAILED TO PROVE THE ENTIRE PURCHASES AMOUNTING TO RS.4,11,18,717/-MADE FROM M/S. J.B.D . ENTERPRISES AND ACCORDINGLY THE ADDITION WAS MADE BY AO . THE ADDITION WAS RESTRICTED BY LD.CIT(A) TO THE EXTENT OF RS.5 LAKH. WE FIND THAT VARIOUS SCENARIOS OF BOGUS PURCHASE ISSUE WAS ADJUDICA TED IN SERIES OF DECISIONS BY THE PUNE BENCHES OF TRIBUNAL WITH LEAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT AND OTHERS (IN ITA NO. 8 ITA NO.1341/PUN/2016 795/PUN/2014 FOR A.Y. 2010-11 DATED 28.04.2017), WHEREIN THE CO- ORDINATE BENCH OF THE TRIBUNAL HAD UPHELD THE ADDITION OF 10% OF THE BOGUS PURCHASES OVER AND ABOVE G.P. SHOWN. IN VIEW OF THE AFORESAID FACTS AND FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CHHABI ELECTRICALS (SUPRA) AND IN VIEW OF THE SUBMISSION OF LD.D.R., WE UPHOLD THE ADDITION TO THE EXTENT OF 10% OF S UCH PURCHASES MADE BY AO OVER AND ABOVE G.P. SHOWN. WE THEREFORE DIREC T ACCORDINGLY. THUS, THE GROUND NO.3 OF THE REVENUE IS PARTLY ALLO WED. 10. IN THE RESULT, THE APPEAL OF REVENUE IS PARTLY ALL OWED. ORDER PRONOUNCED ON 4 TH DAY OF APRIL, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 4 TH APRIL, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, AURANGABAD. PR. CIT I, AURANGABAD. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.