IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 1479 / MUM/20 1 6 ( ASSESSMENT YEAR : 2009 - 10 ) ABDUL ANWAR HAJI ABDUL GANI ASHOK RAJ BUILDING 9, SHOP NO.5, S.V. ROAD GOREGAON (W) MUMBA I 400 062 VS. DCIT 24(3), C - 11, PRATYAKSHAR BHAVNA, BKC, MUMBAI 400 051 PAN/GIR NO. AADPG6168J APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI A.L. SHARMA REVENUE BY SHRI RAM TIWARI DATE OF HEARING 06 / 07 /201 7 DATE OF P RONOUNCEME NT 12 / 07/ 201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 42, MUMBAI DATED 22/01/2016 FOR THE A.Y.2009 - 10, IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2. IN THIS APPEAL, ASSESSEE IS AGGRIEVED FOR ADDITION OF RS. 16,13,968/ - ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN THE TRADING AND MANUFACTURING OF FURN ITURE. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS MADE PURCHAS ES FROM VARIOUS PARTIES. THE ASSESSING OFFI C ER ISSUED NOTICE U/S. 148 ON T HE GROUNDS THAT INFORMATION HAS BEEN ITA NO. 1479/MUM/2016 ABDUL ANWAR HAJI ABDUL GANI 2 RECEIVED BY THE DEPARTMENT FROM THE SALES TAX AUTHORITIES THAT THE APPELL ANT HAS MADE PURCHASES FROM SOME PARTIES WHICH ARE BOGUS AND NON GENUINE. THE NAMES OF THE PARTIES TOTALING TO 8 PARTIES A R E LISTED ON PAGE 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER TREATED THE PURCHASES FROM THESE PARTIES AS BOGUS AND NON GENUINE T O THE EXTENT OF RS. 16,13,968/ - . IN RESPECT OF ONE PARTY NAMELY SURAJ TIMBER MART THE ASSESSEE HAS MADE PURCHASES OF RS. 47,804/ - ONLY AND THE ASSESSING OFFICER HAS WRONGLY TAXED THE PURCHASES AT RS.2,54,518/ - . THE ASSESSEE HAS PAID VAT ON ,PURCHASES OF R S. 47,804/ - ONLY AND THE SAME HAS BEEN ACCEPTED BY THE SALES TAX AUTHORITIES. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE PURCHASES OF RS. 16,13,963/ - SHOULD NOT BE TREATED AS BOGUS PURCHASES. THE ASSESSEE IN RESPONSE TO THE AB OVE SUBMITTED EXPLANATION VIDE LETTER DATED 22.01.2014 WHICH HAS NOT BEEN ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSEE FILED PURCHASE BILLS, DELIVERY CHALLANS BEFORE THE ASSESSING OFFICER IN RESPECT OF ALLEGED BOGUS PURCHASES. THE PAYMENT HAVE BEEN MADE TO THE PARTIES BY ACCOUNT PAYEE CHEQUE. HOWEVER, AO DID NOT AGREE WITH ASSESSEES SUBMISSION AND ADDED ENTIRE PURCHASES IN THE INCOME OF THE ASSESSEE. 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE ASSESSEE VIDE ITS LETTER DATED 22.01.2014 ADDRESSED TO THE AO HAS PRODUCED THE BILLS OF PURCHASE DETAILS , PAYMENT FOR THESE PURCHASES VIDE BY ACCOUNT PAYEE CHEQUES, DETAILS OF MATERIAL AND ITS UTILIZATION IN THE MANUFACTURING PROCESS AN D DETAILS OF FINISHED GOODS . WE FOUND THAT THE AO HAS ITA NO. 1479/MUM/2016 ABDUL ANWAR HAJI ABDUL GANI 3 ACCEPTED THE SALES FIGURE, THERE IS NO EVIDENCE THAT THE PURCHASE CONSIDERATION HAS BEE N RECEIVED BACK BY THE ASSESSEE. 7. WE FOUND THAT ASSESSEE HAD SHOWN GP OF 25.84% ON THE SALES AFFECTED DURING THE YEAR WHICH ALSO INCLUDE D THE ALLEGED GOODS PURCHASED BY THE ASSESSEE. WE ALSO FOUND THAT GP DISCLOSED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS BETTER THAN GP DISCLOSED BY ASSESSEE IN EARLIER TWO ASSESSMENT YEARS I.E., 2007 - 08 AND 2008 - 09 WHE REIN ASSESSEE HAS DECLARED GP OF 23.10% AND 25.71% RESPECTIVELY. 8. KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, VIS - - VIS NATURE OF ASSESSEES BUSINESS AND THE FINDINGS RECORDED BY THE AO WITH REGARD TO THE ALLEGED BOGUS P URCHASES, WE DIRECT A O TO UPHELD THE ADDITION OF 12.5% ON SUCH BOGUS PURCHASES. WE DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 12 / 07 /2017 SD/ - ( AMARJIT S INGH ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 07 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), M UMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//