DCIT 15(2)(2), MUMBAI V. PCI ANALYTICS P.TLD, MUMBAI

ITA 1913/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1903 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Income from undisclosed sources; Question of law
• Section: 44AD; 133(6); 147; 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NOS.1913 TO 1915/MUM/2015 ASSESSMENT YEARS: 2009-10 TO 2011-12 DCIT - 15(2)(2), ROOM NO.403, 4 TH FLOOR, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI-400020 / VS. M/S PCI ANALYTICS PVT. LTD. 3014, BHANDUP INDUSTRIAL ESTATE, PANNALAL MILL COMPOUND, LBS MARG, BHANDUP (WEST), MUMBAI-400078 ( ! / REVENUE) ( '# $ /ASSESSEE) P.A. NO. AAECP1826E ! / REVENUE BY MS. BEENA SANTOSH-DR '# $ / ASSESSEE BY SHRI SURESH OTWANI !& ' $ ( / DATE OF HEARING : 23/11/2016 ' $ ( / DATE OF ORDER: 02/12/2016 M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THESE THREE APPEALS ARE BY THE REVENUE, AGGRIEVED BY THE IMPUGNED ORDERS ALL DATED 21/01/2015 OF THE LD. FIR ST APPELLATE AUTHORITY, MUMBAI. THE ONLY COMMON GROUND RAISED BY THE REVENUE PERTAINS TO DIRECTING THE ASSESSING OFFICER TO ESTIMATE PROFIT OF 15% ON THE TOTAL ALLEGED BOGUS P URCHASES WITHOUT APPRECIATING THAT THE SELLER PARTIES WERE F OUND TO BE HAWALA OPERATORS/ BOGUS BILL PROVIDERS. 2. DURING HEARING OF THESE APPEALS, THE LD. DR, MS . BEENA SANTOSH, STRONGLY DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER BY ADVANCING ARGUMENTS, WHICH IS IDENTICAL TO THE GROUND RAISED BY EXPLAINING THAT WHILE GRANT ING RELIEF TO THE ASSESSEE, THE LD. COMMISSIONER OF INCOME TAX (A PPEAL) WRONGLY DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE PROFIT AT THE RATE OF 15% ON THE TOTAL BOGUS PURCHASES IGNORI NG THE FACT THAT THE SELLER PARTIES WERE BOGUS BILL PROVIDERS. 2.1. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE, SHRI SURESH N. OTWANI, DEFENDED THE ORDER OF THE LD . COMMISSIONER OF INCOME TAX (APPEAL). THE BENCH ASKE D THE LD. COUNSEL FOR THE ASSESSEE WHETHER ANY APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER OF THE LD. CO MMISSIONER OF INCOME TAX (APPEAL). IT WAS CLAIMED BY THE LD. C OUNSEL THAT THE IMPUGNED ORDERS HAVE BEEN ACCEPTED BY THE ASSES SEE AND M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 3 NO APPEAL HAS BEEN FILED AGAINST THE ORDER OF THE F IRST APPELLATE AUTHORITY. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVA NT FINDING ALONG WITH THE CONCLUSION DRAWN IN THE IMPUGNED ORD ER FOR READY REFERENCE AND ANALYSIS:- 2.3.1 FURTHER DURING THE COURSE OF THE SUBSEQUENT HEARING, THE AR HAD FURNISHED SEMI-BURNTCOPY OF BILL RAISED IN R ESPECT OF THE FOLLOWING CONCERNS: 1. M/S M.R. CORPORATION 2. V.M.UDYOG 3. SNEHAL ENTERPRISES 4. MAULI ENTERPRISES 5. MEETITRADE LMPEX 6. MOTION TRADERS PVT. LTD. 2.3.2. I HAVE PERUSED THE INVOICE IN RESPECT OF M. R. CORPORATION, WHICH REVEAL THAT THE LR NO., DATE & TRANSPORT COLU MN IN THE INVOICE WAS LEFT BLANK. SIMILAR IS THE CASE WITH M/S SNEHAL ENT ERPRISES WHERE ORDER NO., TRANSPORTER, LR/RR NO, DELIVERY COLUMN IN THE INVOI CE WAS LEFT BLANK. IN THE CASE OF MEETI .TRADE IMPEX THE PAYMENT TERMS AND DETAILS OF TRANSPORTER ETC. WERE LEFT BLANK. IN THE CASE OF MOTION TRADERS PVT. LTD. ORDER NO TRANSPORTER, LR/R R NO, DELIVERY COLUMN IN THE INVOICE WERE LEFT BLANK. IN THE CASE OF MAULIK ENTERPRISES, ORDER NO., DATE, PAYMENT TERMS, TRANSP ORT THROUGH WERE ALL LEFT BLANK. THE PERUSAL OF THE INVOICES FU RTHER REVEALS THAT THE APPELLANT HAD PURCHASED SS TUBES OF VARIOUS SIZ ES, SSTEE, OIL FREE VACUUM PUMP AND . MS POWDER COATED GAS DISTRIBUTION PANEL WITH ITS ACCESSORIES. 2.3.3. THE SCRUTINY OF THE LEDGER EXTRACTS FILED IN RESPECT OF THE 18 SUPPLIERS INDICATES FOLLOWING: 1.SUN ENTERPRISES : LEDGER EXTRACT FOR THEF,Y.2007-08 INDICATE THAT THE RE WAS NO TRANSACTIONDURING THE YEAR. THE LEDGER EXTRACT FOR THE PERIOD 01.04.2008 TO 31.03.2010 OF THIS PARTY IS AVAILABLE IN PAGE 66 OF THE PAPER BOOK. THE PERUSAL INDICATE THAT THE APPEL LANT HAD M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 4 PURCHASED THE MATERIAL ON 13/19.05.2008 FOR A SUM O F RS.1,07,138/- AND THE ENTIRE AMOUNT WAS OUTSTANDING AS ON 31.03.2009. THE APPELLANT HAD CLEARED THE PAYMENT IN THE NEXT FINANCIAL YEAR ON 1 9.04.2009. THE PAYMENT WAS SETTLED 11 MONTHS AFTER THE PURCHASE. 2. MAULIK ENTERPRISES LEDGER EXTRACT FOR THEF.Y.2007-08 INDICATE THAT THE RE WAS NO TRANSACTION DURING THE YEAR. DURING THE YEAR THE' A PPELLANT HAD MADE PURCHASES TO THE TUNE OF RS.6,46,932/- ALL IN THE MONTH OF NOVEMBER, 2008 AND: THE ENTIRE AMOUNT WAS OUTSTANDI NG AS ON 31.03.2009. THE PAYMENTS WERE MADE IN THE SUBSEQUEN T FINANCIAL YEAR IN THE MONTH OF SEPTEMBER AND OCTOBER, 2009. T HE PAYMENT WAS SETTLED 11 MONTHS AFTER THE PURCHASE. 3. G.R.TRADELINK : NO TRANSACTION DURING THE F.Y.2007-08 AND 2009-10. DURING THE YEAR THE APPELLANT HAD PURCHASED GOODS WORTH RS.3,37,740/- I N THE MONTH OF SEPTEMBER, 2008 WHICH WAS FOUND TO HAVE BEEN SETTLE D ON 25.03.2009 AFTER A PERIOD OF 6 MONTHS FROM THE DATE OF PURCHASE. 4. M.R.CORPORATION : NO TRANSACTION DURING THE F.Y.2007-08: THE APPELLAN T HAD PURCHASED MATERIAL AMOUNTING TO RS.2,94,580/- IN MAY AND SEPT EMBER, 2008. THE PAYMENT WAS FOUND TO HAVE BEEN MADE IN THE SUBSEQUE NT FINANCIAL YEAR IN THE MONTH OF APRIL, 2009. THE PAYMENTS WERE MADE 7- 11 MONTHS AFTER THE DATE OF PURCHASE IN RESPECT OF TWO SUPPLIES MADE. 5. REKHA TRADING CO. NO TRANSACTION DURING THE F.Y.2007-08. PURCHASES AM OUNTING TO RS.1,19,600/- WASMADE DURING THE YEAR ON 21.03.2009 AND THE PAYME NT WAS SETTLED ON 23.05.2009. 6. STHAPNA TRADE LMPEX PVT. LTD. NO TRANSACTION DURING THE F.Y.2007-08.THE LEDGER EX TRACT OF THIS PARTY ISAVAILABLE IN PAGE 80 & 81 OF THE PAPER BOOK. DURI NG THE YEAR APPELLANT HAD PURCHASED MATERIAL AMOUNTING TO RS.33,45,771/-. MOST OF THE PURCHASES HAVE BEEN MADE IN THE MONTH 'OF MAY, 2008 TO JANUARY, 2009 AND SOME, PURCHASES HAVE ALSO BEEN MADE IN THE MONT H OF FEBRUARY & MARCH, 2009. THE APPELLANT HAD MADE PAYMENT-OF RS.1 1,44,282/- LEAVING A CLOSING BALANCE OF RS.22,01,489/-. IN THE SUBSEQUE NT FINANCIAL YEAR PURCHASES AMOUNTING TO RS.9,24,650/- WAS MADE. THE OPENING BA LANCE AS ON 01.04.2009 ALONG WITH PURCHASES , MADE DURING THE YEAR AMOUNTING TO RS.31,26,139/- TOGETHER WAS SETTLED DURING THE SUBS EQUENT FINANCIAL YEAR 2009-10. PART OF THE PURCHASES MADE DURING MAY AND JUNE 2008 WAS FOUND TO HAVE BEEN SETTLED IN THE MONTH OF FEBRUARY, 2009 AN D FOR THE BALANCE I.E. M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 5 MATERIAL PURCHASED IN THE MONTH OF SEPTEMBER, DECEM BER AND JANUARY WERE FOUND TO HAVE BEEN SETTLED IN THE MONTH OF JUN E, SEPTEMBER AND OCTOBER, 2009. THUS, THE PAYMENTS WERE MADE BEY OND 6 MONTHS AFTER THE PURCHASE. 7. SIDDHIVINAYAK TRADING COMPANY.: NO TRANSACTION DURING THE F.Y.2007-08. OUT OF THE P URCHASES MADE DURING THE YEAR RS.3,46,466/- A SUM OF RS.71,136/- WAS PAID DU RING THE YEAR AND THE BALANCE RS.2,75,330/- WAS OUTSTANDING AS ON 31. 03.2009. ALL THE PURCHASES MADE DURING THE MONTH OF MAY, 2008. DURIN G THE YEAR ONLY A SINGLE PAYMENT OF RS.71,136/- WAS MADE ON 02.02.2 009. THE BALANCE WAS PAID IN THE . MONTH OF MAY, 2009 IN THE SUBSEQUENT FINANCIAL YEAR. MOST OF THE PAYMENTS HAVE BEEN MADE ALMOST 1 YEAR AFTER THE PURCHASE. 8. V.M.UDYOG : NO TRANSACTION DURING OLE F.Y.2007-08.GOODS WORTHRS .4,11,320/- WAS PURCHASED FROM THIS CONCERN ON 10.09.2008 AND THE E NTIRE AMOUNT STOOD OUTSTANDING AS ON 31.03.2009. PAYMENTS WERE MADE IN THE MONTH OF APRIL AND AUGUST, 2009 IN THE SUBSEQUENT FINANCIAL YEAR WHICH WERE BEYOND SIX MONTHS TO 11 MONTHS AFTER THE SUPPLY. 9. MOTION TRADERS PVT. LTD. NO TRANSACTION DURING THE * F.Y.2007-08PURCHASES TO THE TUNE OF RS.8,43,615/- WAS MADE IN THE MONTH OF NOVEMBER AND DECEMBER, 200 8 OUT OF WHICH PAYMENTS TO THE TUNE OF RS.6,60,825/- WAS MADE AT T HE'' END OF NOVEMBER, 2008. FURTHER PURCHASES AMOUNTING TO RS.1,47,919/- WERE MADE IN THE MONTH OF JANUARY, 2009 AND A SUM OF RS.3,30,709/- WAS FOUND TO BE OUTSTANDING AS ON 31.03.2009 WHICH GOT SETTLED IN THE MONTH OF APR IL, 2009 IN THE SUBSEQUENT FINANCIAL YEAR. THE PURCHASES AMOUNTING TO RS.1,37,627/- MADE DURING THE F.Y.2009-10 WAS SETTLED ON 01.10.20 09 WITHIN 15 DAYS OF THE PURCHASE. 10. MEETI TRADE IMPEX: NO TRANSACTION DURING THE F.Y.2007-08. OUT OF THE T OTAL PURCHASES MADE RS.21,47,925/- DURING THE YEAR FROM OCTOBER, 2 008 TO FEBRUARY, 2009 ONLY THE PAYMENT OF RS.1,79,010/- TOWARDS PURC HASE MADE ON 20.11.2008 WAS PAID DURING THE YEAR AND THE REMAINI NG RS.19,68,915/- WAS OUTSTANDING AS ON 31.03.2009. SUBSEQUENTLY IN T HE F.Y.2009-10 BETWEEN APRIL TO AUGUST, 2009 THE ENTIRE BALANCE WA S PAID. PAYMENTS WERE MADE BEYOND 6 MONTHS AFTER THE PURCHASE. 11. DEEPALI ENTERPRISE NO TRANSACTION DURING THE F.Y.2007-08. OUT OF THE T OTAL PURCHASES MADE OF RS.3,95,616/- DURING THE YEAR, PAYMENT AMOUNTING TO'RS.2,61,768/- WAS MADE IN THE MONTH OF MAY AND THE BALANCE PAYMENTS H AVE BEEN MADE IN THE MONTH OF MARCH, 2009. THE PURCHASES MADE ON 13.03.2009 M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 6 RS.1,33,848/- REMAINED AS CLOSING BALANCE WHICH WAS PAID ON 23.05.2009 IN THE SUBSEQUENT FINANCIAL YEAR. PAYMENTS HAVE BEE N MADE BEYOND 3 MONTHS OF PURCHASE. 12. MIHIR SATES PVT. LTD.: NO TRANSACTION DURING THE F.Y.2007-08. DURING THE F .Y.2008-09 RELEVANT TO THE A.Y.2009-10 THE APPELLANT HAD PURCHASED GOOD S WORTH RS.1,89,8001- IN THE MONTH OF DECEMBER, 2008 AND JANUARY, 2009 WHICH REMAINED AS CLOSING BALANCE. DURING THE FINAN CIAL YEAR 2009-10 PURCHASES AMOUNTING TO RS. 11,61,754/- WAS MADE. TH E APPELLANT HAD MADE PAYMENT OF RS.12,03,054/- AND THE PURCHASES MADE DU RING AUGUST, 2009 AMOUNTING TO RS.1,48,500/- REMAINED OUTSTANDING AS ON 31.03.2010. DURING F.Y.2010-11 THE OUTSTANDING BALANCE WAS SETT LED BY THE APPELLANT. THE PAYMENT WAS FOUND TO HAVE BEEN MADE BEYOND 6 MONTHS AFTER THE PURCHASE. 13. K. C. ENTERPRISE NO TRANSACTION DURING THE F.Y.2007-08. 'THE TOTAL P URCHASES MADE DURING THE F.Y.2008-09 RELEVANT TO THE A.Y.2009-10 WAS RS.8,52,478/-. THE PURCHASES MADE IN THE MONTH OF MAY, 2008 WAS PAID Q NOVEMBER, 2008 AND JANUARY, 2009. PURCHASES MADE IN AUGUST, 2005, JANUARY, 2009 AND FEBRUARY, 2009 AMOUNTING TO RS.4,83,798/- REMAINED AS CLOSING BALANCE AS ON 31.03.2009 WHICH WAS PAID IN THE SUBSEQUENT FINA NCIAL YEAR IN THE MONTH OF AUGUST, 2009. THEREFORE, THE PAYMENT WAS FOUND TO H AVE BEEN MADE BEYOND 6 MONTHS OF THE PURCHASE. 14. KALPATARU TRADING CO. DURING THE ASSESSMENT YEAR PURCHASES AMOUNTING TO R S.11,31,182/- WASMADE IN THE MONTH OF JULY AND SEPTEMBER, 2008 WHICH GOT SETTLED IN THE MONTH OF OCTOBER, NOVEMBER 2008 AND MARCH, 2009. THE PAYM ENTS WERE MADE BEYOND THREE MONTHS AFTER THE PURCHASE. 15. RENUKA SALES : THERE WAS ONLY ONE PURCHASE FROM THIS PARTY DURING THE YEAR AMOUNTING TO RS.83,200/- ON 29.03.2009 WHICH WAS PAID ON 09.0 6.2000 IN THE SUBSEQUENT FINANCIAL YEAR. 16. TARA ENTERPRISE : THE PURCHASES MADE IN THE MONTH OF SEPTEMBER, 2008 AMOUNTING TO RS.2,82,880/- REMAINED OUTSTANDING AS ON 31.03.2 009 AND THE PAYMENT WAS MADE ON 20.08.2009 WHICH WAS ALMOST AFT ER 11 MONTHS OF THE PURCHASE. 17. SAILEELA TRADING PVT. LTD. : DURING THE ASSESSMENT YEAR MATERIALS WORTH RS.20,40 ,413/- WAS M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 7 PURCHASED FROM THIS CONCERN. PAYMENTS TO THE TUNE O F RS.6,46,380/- WAS MADE DURING THE YEAR ITSELF AND BALANCE RS.13,94,02 7/- REMAINED OUTSTANDING WHICH WAS FOUND TO HAVE BEEN SETTLED IN THE SUBSEQUENT FINANCIAL YEAR. DURING F.Y.2009-10 THE PURCHASES MA DE WERE RS.7,48,873/-. THE PURCHASES MADE IN THE MONTH OF MAY, 2009 RS.1,5 6,954/- WAS SETTLED ON 23.12.2009 WHICH WAS ALMOST 6 MONTHS AFT ER THE PURCHASE. THE PURCHASES MADE IN THE MONTH OF JULY RS. 1,51,24 2/- WAS PAID ON 18.12,2009. 18. SNEHAL ENTERPRISES: THERE WERE NO TRANSACTIONS DURING F.Y.2007-08 WITH THIS PARTY. DURING A.Y.2009-10 THE APPELLANT HAD PURCHASED MATERIAL WO RTH RS.18,62,9521- FROM THIS PARTY. THE PERUSAL OF THE LEDGER EXTRACT INDICATE THAT THE APPELLANT HAD MADE PAYMENT OF RS.3,61,340/ - DURING THE YEAR LEAVING RS.15,61,612/- AS OUTSTANDING AT THE END OF THE FIN ANCIAL YEAR. DURING THE A.Y.2010-11 THERE IS AN OPENING BALANCE OF RS.15,61,6121- WHICH WAS FOUND TO HAVE BEEN SETTLED IN THE MONTH O F APRIL AND AUGUST, 2009 AND THE ENTIRE OUTSTANDING WAS REPAID BY THE A PPELLANT. THIS CLEARLY INDICATES THAT THE APPELLANT HAD TRANS ACTION ONLY DURING THE ASSESSMENT YEAR AND NO TRANSACTION EITHER BEFORE OR AFTER THIS YEAR. THE PAYMENT FOR PURCHASE WAS MADE BEYOND SIX MONTHS AFTER THE PURCHASE. THERE WERE NO TRANSACTIONS DURING F.Y.2007-08. 3. THE AR OF THE APPELLANT WAS DIRECTED TO FILE - THE LEDGER EXTRACT OF SOME OF THE TOP REGULAR SUPPLIERS TO ANALYSE THE PAYMENT PA TTERN AND THE DETAILS FILED ARE AVAILABLE IN PAGES 47 TO 65 OF THE PAPER BOOK. THE DETAILS OF PURCHASES AND THE PAYMENT MADE ARE AS UNDER: 1. M/S R.T. INSTRUMENTS : DURING THE YEAR THE APPELLANT HAD MADE PURCHASES AM OUNTING TO RS.1,41,68,921/- OUT OF WHICH A SUM OF RS.1,35,70,5 90/- WAS SETTLED DURING THE YEAR ITSELF, LEAVING A MEAGER BALANCE OF RS.5,98,331/- AS OUTSTANDING BALANCE AS ON 31.03.2009 WHICH WERE MOSTLY THE PURCHASES MADE IN THE MONTH OF MARCH, 2009. THE PAYMENT PATTE RN INDICATES THAT THE APPELLANT HAD SETTLED THE PAYMENTS ON MONT H TO MONTH BASIS AND, THEREFORE, THE PAYMENTS WERE FOUND TO HAVE BEEN MAD E WITHIN 30 DAYS OF THE SUPPLY. 3.1. SIMILAR IS THE PICTURE WITH OTHER LOP SUPPLIER S VIZ LCGC CROMOTOGRAPHY SOLUTIONS PVT. LTD., SUNLIGHT GAS EQUIPMENT AND DAKSHIN. ASSESSMENT YEAR: 2010-11 4. GROUND OF APPEAL NO 1& 2 ARE DIRECTED AGAINST ADDITION OF RS.93,86,559/- ON ACCOUNT OF BOGUS PURCHASES MADE IN RESPECT OF 8 PARTIES AND BRINGING TO TAX 100% OF PURCHASE VALUE. 4. THE AO HAD MADE ADDITION AMOUNTING TO RS,93,86, 559/-FROM EIGHT M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 8 ALLEGED HAWALA OPERATORS OUT OF WHICH FIVE PARTIES VIZ. MOTION TRADERS PRIVATE LIMITED., MIHIR SALES PRIVATE LIMITED, K.C. ENTERPRISES, STHAPNA TRADE IMPEX PVT,.;-, LTD., SAILEELA TRADING PVT. LT D. WERE FOUND TO HAVE BEEN SUPPLIED DURING A.Y.2009-10 ALSO WHICH HAS BEE N DISCUSSED IN DETAIL IN THE ABOVE PARAGRAPHS. THE FOLLOWING ARE THE THRE E NEW SUPPLIERS : 1. EVERREADY MARKETING PRIVATE LIMITED : RS.16,47,119/ - 2. ABHILASHA SALES PRIVATE LIMITED : RS.29,62,3571- 3. ASHLEY TRADERS PRIVATE LIMITED : RS.16,93,953/- THE AO FURTHER NOTICED THAT THE SIGNATURE IN THE BI LL IS DIFFERENT FROM DELIVERY CHALLAN. HE HAD ALSO MENTIONED THAT IN RES PONSE TO THE NOTICE ISSUED U/S 133(C) M/S MIHIR SALES PRIVATE LIMITED D ENIED HAVING ANY TRANSACTION WITH APPELLANT AND IN VIEW OF THIS HE T REATED THE PURCHASE MADE FROM ALL THE 8 PARTIES AS BOGUS. 4.2. THE SCRUTINY OF THE LEDGER EXTRACTS OF THESE S UPPLIERS AND THE FINDINGS ARE DISCUSSED AS UNDER: 1. K.C.ENTERPRISES : THE LEDGER EXTRACT OF THIS PARTY IS AVAILABLE IN PA GE 196 OF PAPER BOOK. THE APPELLANT DID NOT HAVE TRANSACTION DURING F.Y.2007- 08 AND F.Y.2010-11. DURING THE ASSESSMENT YEAR PURCHASES TO THE TUNE OF RS.1,09,226/- ON 20.08.2009 WAS FOUND TO HAVE BEEN PAID ON 19.09.200 9. 2. MIHIR SALES PRIVATE LIMITED : THE LEDGER EXTRACT IS AVAILABLE IN PAGE 141 OF THE PAPER BOOK. DURING THE FINANCIAL YEAR 2009-10 RELEVANT TO A.Y 2010-11 PURC HASES AMOUNTING TO RS.11,61,754/- WAS MADE. THE APPELLANT HAD MADE PAYMENT OF RS.12,03,054/- DURING THE YEAR WHICH INCLUDE THE OU TSTANDING AMOUNT RS.1,89,800/- BELONGED TO A.Y. 2009-10. THE PURCHASES MADE DURING AUGUST, 2009, RS.1,48,500/- REMAINED OU TSTANDING AS ON 31.03.2010. THIS OUTSTANDING BALANCE OF RS.1,48, 500/- WAS SETTLED IN THE SUBSEQUENT F.Y.2010-11. THE PAYMENTS HAVE BEEN MADE BEYOND THREE MONTHS AFTER THE. PURCHASES. 3. EVERREADY MARKETING PRIVATE LIMITED : DURING THE YEAR ASSESSEE PURCHASED MATERIAL TO THE TUNE OF RS.16,47,119/- FROM THIS CONCERN OUT OF WHICH RS.7, 27,105/- WAS PAID DURING THE YEAR LEAVING OUTSTANDING BALANCE OF RS.9 ,20,014/-. THE PURCHASES MADE,, ON 12.07.2009 RS57,684/- WAS SETTL ED ON 05.11.2010. THE PURCHASES MADE ON 05.12.2009 41,92,722/- WAS SE TTLED ON 19.02.2010. THE PURCHASES MADE IN THE MONTH OF JULY , 2009 WAS FOUND TO HAVE BEEN SETTLED ON 31.03.2010. THE PURCH ASES MADE IN THE MONTH OF SEPTEMBER, 2009 TO FEBRUARY, 2010 REMA INED OUTSTANDING. THE OUTSTANDING BALANCES WERE FOUND TO HAVE BEEN SETTLED IN THE MONTH OF MAY TO NOVEMBER, 2010. THER EFORE, THE PAYMENT M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 9 PATTERN SHOWS THAT BILLS HAVE BEEN SETTLED BEYOND THREE TO SIX MONTHS. COPY OF INVOICES FILED BY THE APPELLANT IS AVAILABL E IN PAGES 207 TO 275 OF THE PAPER BOOK. THE PERUSAL OF THE INVOICES INDICAT ES THAT ORDER NO, DATE AND THE DETAILS OF LORRY NO WERE LEFT BLANK. T HOUGH THE APPELLANT HAD FILED VOUCHER FOR TRANSPORT PAID WHICH DID NOT INDI CATE THE NAME OF THE CONCERN. THE PAYMENT WAS MADE BY WAY OF CASH AND IT WAS SELF- MADE. 4. ABHILASHA SALES PRIVATE LIMITED: NO TRANSACTION DURING F.Y.2007-08 AND 2008-09. DURI NG THE ASSESSMENT YEAR PURCHASES AMOUNTING TO RS.29,62,357/- WAS MADE FROM THIS PARTY. THE PURCHASES AMOUNTING TO PSI 52,854/- MADE ON 07.09.2009, WAS PAID ON 31.03.2010 AND REST OTHER P URCHASE MADE FROM APRIL TO JANUARY, 2010 AMOUNTING TO RS.28,09,503/- REMAINED OUTSTANDING WHICH WAS FOUND TO HAVE BEEN SETTLED IF THE SUBSEQUENT FINANCIAL YEAR 2010-11. DURING F.Y.2010-11 PURCHASE S TO THE TUNE OF RS.15,32,532/- WAS MADE IN THE MONTH OF APRIL AND MAY, 2010 WHICH WERE FOUND TO HAVE BEEN SETTLED IN THE MONTH OF JANUARY AND MARCH, 2011. THE OUTSTANDING BALANCE OF THE EARLIER FINANCIAL YEAR W AS FOUND TO HAVE BEEN SETTLED FROM MAY, 2010 TO DECEMBER, 2010. THE PAYME NT PATTERN INDICATES THAT IN SOME INSTANCES THE PURCHASES HAVE BEEN SETT LED ONE YEAR AFTER THE PURCHASE WAS MADE. COPIES OF THE INVOICE ALONG WITH DELIVERY CHAILAN A ND VOUCHER FOR TRANSPORT CHARGES FILED ARE AVAILABLE IN THE PAPER BOOK. ORDE R NO, DATE AND THE DETAILS OF LORRY NO IN THE INVOICE WAS LEFT BLANK. DELIVERY CHALLAN ALSO DID NOT INDICATE THE DETAILS OF LORRY NO., AND THE VOUCHER FOR TRANS PORT WAS SELF MADE AND CASH WAS FOUND TO -HAVE BEEN PAID. FEW OF THE TRANS PORT VOUCHERS INDICATES THE NAME OF THE TRANSPORTER BUT THE DETAILS SUCH AS THE TEMPO NO., LORRY NO., ADDRESS OF THE TRANSPORTER ETC. WERE NOT MENTIONED IN THE VOUCHER. 5. STHAPNA TRADE IMPEX PVT. LTD.; THE LEDGER EXTRACT IS AVAILABLE IN PAGE 373 OF THE PAPER BOOK. THE LEDGER EXTRACT FOR THE YEAR INDICATE THAT THERE IS AN OPEN ING BALANCE OF RS.22,01,489/-. DURING THE YEAR PURCHASES AMOUNTING TO RS.9,24,650/- WAS MADE. THE ENTIRE SUM OF RS.31,26,139/- WAS SETT LED BY JANUARY, 2010. THE PURCHASE MADE DURING THE YEAR ON 06.07.2009 WAS PAID ON 20.12.2009. THEREFORE, THE PAYMENT WAS FOUND TO HAVE BEEN MADE BEYOND SIX MONTHS. COPIES OF THE INVOICE, DELIVERY CHALLAN ALONG WITH VOUCHER FOR TRANSPORT, FILED ARE AVAILABLE IN PAGES 374 TO 434 OF THE PAPER BOOK . THE PERUSAL INDICATE THAT THE ORDER NO, DATE AND THE DETAILS OF LORRY NO., TR ANSPORT THROUGH WERE LEFT BLANK. THE DELIVERY CHALLAN DID NOT INDICATE THE LO RRY NO. AND NAME OF THE TRANSPORTER. THE VOUCHER FOR TRANSPORTATION CHARGES PAID DID NOT IND I CATE THE NAME OF THE TRANSPORTER AND IT WAS SELF MADE. M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 10 6. SAILEELA TRADING PVT. LTD. THE LEDGER EXTRACT INDICATE THAT THERE IS AN OPENIN G BALANCE OF RS.13,94,027/- .DURING THE YEAR PURCHASES AMOUNTING TO.-RS.7,49,87 31- WAS MADE. THE PURCHASES MADE IN THE MONTH OF JULY AMOUNTING TO RS .1,51,242/- WAS PAID IN THE MONTH OF DECEMBER, 2009. SOME OF THE PURCHAS ES MADE IN DECEMBER WERE PAID IN THE MONTH OF DECEMBER ITSELF AND ALSO IN JANUARY, 2010. COPY OF THE INVOICES, DELIVERY CHALLAN AND VOUCHER FOR TRANSPORT ARE AVAILABLE IN PAGES 434 TO 463 OF THE PAPER BOOK. ORDER NO, DATE AND THE DETAILS OF LORRY NO IN THE INVOICE WERE LEFT BLANK. THE DELIVERY CHA LLAN DID NOT INDICATE THE LORRY NO. AND NAME OF THE TRANSPORTER. THE VOUC HER FOR PAYMENT OF TRANSPORT CHARGES DID NOT INDICATE THE NAME OF THE TRANSPORTER AND IT WAS SELF MADE. 7. ASHLEY TRADERS PRIVATE LIMITED NO TRANSACTION WITH THIS CONCERN DURING F . :Y.2007-08 AND 2008-09. DURING THE ASSESSMENT YEAR PURCHASES AMOUNTING TO RS.16,93 ,953/- WAS MADE FROM APRIL, 2009 TO AUGUST, 2009. THE ENTIRE AMOUNT WAS OUTSTANDING AS OF 31.03.2009 AND IT WAS SETTLED IN THE SUBSEQUENT FINANCIAL YEAR IN THE MONTH OF MAY, 2010 TO DECEMBER, 2010. IN SOME INSTA NCE THE PAYMENT WAS MADE EVEN BEYOND 1 YEAR AFTER THE PURCHASE. DURING THE F.Y.2010-11 MATERIALS WORTH RS.9,13,365/- WAS PURCHASED FROM TH IS PARTY ALL IN THE MONTH OF APRIL AND MAY, 2010 AND PAYMENTS HAVE BEEN MADE IN THE MONTH OF JANUARY TO MARCH, 2011. COPY OF INVOICES INDICATES THAT ORDER NO, DATE AND THE DETAILS OF LORRY NO WERE LEFT BLANK. THE DELIVERY CHALLAN DID NOT INDICATE T HE LORRY NO. AND NAME OF THE TRANSPORTER. THE VOUCHER FOR PAYMENT OF TRANSPORT C HARGES DID RIOT INDICATE THE NAME OF THE TRANSPORTER AND IT WAS SELF MADE. 8. MOTION TRADERS PVT. LTD.- THE PURCHASES AND PAYMENTS MADE DURING THE YEAR ARE DISCUSSED IN PARA 2.3.3 IN SERIAL NO. 9 OF THE ORDER (IN A.Y.2009-10). 4.3 THE AR OF THE APPELLANT WAS DIRECTED TO FILE TH E LEDGER EXTRACT OF SOME OF THE TOP REGULAR SUPPLIERS TO ANALYSE THE PA YMENT PATTERN ARID THE DETAILS FILED ARE AVAILABLE IN PAGES 100 TO 131 OF THE PAPER BOOK. THE DETAILS OF PURCHASES ARID THE PAYMENT MADE ARE AS UNDER: 1. M/S R.T. INSTRUMENTS- THE PERUSAL OF THE LEDGER EXTRACT, OF M/S R.T .INST RUMENTS REVEAL THAT DURING THE ASSESSMENT YEAR THE APPELLANT HAD P URCHASED GOODS WORTH RS.1,40,00,401/- AND A SUM OF RS.1,23,8 9,908/- WAS PAID LEAVING A BALANCE OF RS.16,10,493/. FOR THE PU RCHASE MADE DURING THE MONTH PAYMENT WAS FOUND TO HAVE BEEN MAD E WITHIN THE MONTH ITSELF. THE PAYMENT PATTERN INDICATES THAT TH E APPELLANT HAD SETTLED THE PAYMENTS ON A MONTH TO MONTH BASIS AND, THEREFO RE, THE PAYMENTS WERE FOUND TO HAVE BEEN MADE WITHIN 30 DAYS OF THE SUPPLY. 4.3.1 SIMILAR IS THE PATTERN SEEN WITH THE OTHER SU PPLIERS VIZ. SUNLIGHT M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 11 GAS EQUIPMENTS, DAKSHINAND UNITED TECHNOLOGIES. ILL. ASSESSMENT YEAR: 2011-12: 5. GROUND OF APPEAL NO 1& 2 ARE DIRECTED AGAINST ADDITION OF RS.68,94,851/- ON ACCOUNT OF BOGUS PURCHASES MADE IN RESPECT OF 5 PARTIES AND BRINGING TO TAX 100% OF PURCHASE VALUE. 5.1 THE ORIGINAL ASSESSMENT IN THIS CASE WAS ORIGIN ALLY COMPLETED U/S 143(3). THE ASSESSMENT WAS REOPENED U/S 147 BY ISSU E OF NOTICE . U/S 148 ON 09.03.2013. THE REASON FOR REOPENING IS REPRODUCED IN PARA 2 OF THE ASSESSMENT ORDER. THE AO HAD MADE ADDITION OF RS.65,32,410/- T OWARDS BOGUS PURCHASE MADE IN RESPECT OF FIVE ALLEGED SUPPLIERS. IN THE A BSENCE OF ANY DOCUMENTARY EVIDENCE SUPPORTING THE DELIVERY OF THE MATERIAL PURCHASED AND ITS UTILIZATION IN THE BUSINESS OF THE APPELLAN T, THE AO -HAD COME TO SUCH CONCLUSION. HE HAD ALSO REFERRED TO THE INVESTIGATI ON CARRIED OUT BY SALES TAX DEPARTMENT, MUMBAI AND, THEREFORE, FINDIN GS COUPLED WITH THE STATEMENTS OF SUPPLIERS ADMITTING THE ISSUANCE OF B OGUS BILLS. 5.2 THE SCRUTINY OF THE LEDGER EXTRACTS OF THE ALLE 9ED BOGUS SUPPLIERS FILED BEFORE ME AND THE FINDINGS ARE DISCUSSED AS UNDER: 1. MAHI SALES PVT. LTD. DURING THE ASSESSMENT YEAR THE APPELLANT HAD MADE P URCHASES AMOUNTING TO RS.5,64,751/- ON 17 & 24.12.2010 AND THE ENTIRE AMO UNT REMAINED OUTSTANDING AS CLOSING BALANCE. DURING THE F.Y. 201 1-12 THE PAYMENTS HAVE BEEN MADE IN THE MONTH OF MAY & SEPTEMBER, 201 1. THEREFORE, THE PAYMENTS HAVE BEEN MADE BEYOND FIVE MONTHS TO EIGHT MONTHS AFTER THE PURCHASE. 2. EVERREADY MARKETING PRIVATE LIMITED: THE PERUSAL OF THE LEDGER INDICATES THAT THE APPELL ANT HAD PURCHASED GOODS WORTH RS.15,88,202/- DURING THE YEAR. THE OPE NING BALANCE CARRIED FROM THE PREVIOUS YEAR WAS RS.9,20,014/-. DURING TH E YEAR PAYMENT TO THE TUNE OF RS.18,45,776/- WAS MADE LEAVING A CLOSI NG BALANCE OF RS.6,62,440/-. PART OF THE PURCHASES MADE DURING TH E MONTH OF APRIL AND MAY, 2010 WAS PAID IN SEPTEMBER AND JANUARY, 2011. DURIN G THE F.Y.2011- 12 THE BALANCE RS.6,62,440/- WAS SETTLED IN THE MON THS OF JUNE TO AUGUST, 2011 WHICH PERTAIN TO PART OF THE PURCHASES MADE IN THE MONTH OF MAY, 2010. THEREFORE, THE APPELLANT TOOK M ORE THAN A YEAR TO SETTLE THE PAYMENT. INVOICE AND DELIVERY CHALLAN PERTAINING TO THIS ASSESSMENT YEAR OF THIS PARTY WAS NOT FURNISHED BY THE APPELLANT. 3. ABHILASHA SALES PRIVATE LIMITED :- DURING F.Y.2010-11 PURCHASES TO THE TUNE OF RS.15,3 2,532/- WAS MADE IN THE MONTH OF APRIL AND MAY, 2010 WHICH WERE FOUN D TO HAVE BEEN SETTLED IN THE MONTH OF JANUARY AND MARCH, 201 1. THE OUTSTANDING BALANCE OF THE EARLIER FINANCIAL YEAR WAS FOUND TO HAVE BEEN SETTLED FROM MAY, 2010 TO DECEMBER, 2010. THE PAYMENT PATTERN IN DICATES THAT M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 12 IN SOME INSTANCES THE PURCHASES HAVE BEEN SETTLED O NE YEAR AFTER THE PURCHASE WAS MADE. NO INVOICE WAS FILED. 4. M.N. COMTRADE PRIVATE LIMITED : PURCHASES TO THE TUNE OF RS.20,03,852/- WAS FOUND TO HAVE BEEN MADE DURING THE YEAR OUT OF WHICH RS.7,70,063/- WAS SETTLED DURING THE YEAR ITSELF LEAVING CLOSING BALANCE OF RS.12,33 ,789/-. THE PURCHASES MADE IN THE MONTH OF JULY, 2010 WAS MADE IN DECEMBER, 2010 AND FEBRUARY, 2011. THEREFORE, THE . PAYMENTS HAVE BEEN MADE BEYOND THREE MONTHS TO FIVE MONTHS. PURCHASES MADE DURING THE MONTH OF SEPTEMBER AND OCTOBER REMAINED OUTSTANDING , WHICH IS SETTLED. IN THE MONTH OF SEPTEMBER. OCTOBER, 2011. THEREFORE, THE PAYMENT WAS MADE ALMOST AFTER A YEAR. 5. REAL VALUE COMMERCIAL PRIVATE 'LIMITED DURING THE ASSESSMENT YEAR THE APPELLANT HAD MADE P URCHASES AMOUNTING TORS.12,05,514/- IN THE MONTH OF OCTOBER AND NOVEMBER 2010. NO PAYMENT WAS MADE DURING THE YEAR LEAVING ENTIRE AMOUNT RS:42,05,514/- AS CLOSING BALANCE OF WHICH GOT SETTLED IN THE SUBSEQUENT YEAR FROM MAY, 2011 TO MARCH, 2012. PAYMENT WAS MADE BEYOND SIX MONTHS AFTER THE PURCHASE. 5.3 THE AR OF THE APPELLANT WAS DIRECTED TO FILE TH E LEDGER EXTRACT OF SOME OF THE TOPREGULAR SUPPLIERS TO ANALYSE THE PAY MENT PATTERN. THE DETAILS OF PURCHASES AND THE PAYMENT MADE ARE AS UN DER: 1. M/S R.T. INSTRUMENTS DURING THE YEAR THE APPELLANT HAD MADE PURCHASES AM OUNTING TO RS.1,33,87,870/-. OPENING BALANCE AS ON 01.04.2010 WAS RS.16,10,493/-. THE APPELLANT HAD MADE PAYMENTS AMO UNTING TO RS.1,36,84,023/- LEAVING A BALANCE OF RS.13,14,340/ -. 2. DAKSHIN DURING THE YEAR PURCHASES AMOUNTING TO RS.80,95,278 /- WAS MADE FROM THIS PARTY. OPENING BALANCE OF RS.22,46,67 , 4/- AS ON 01.04.2010. A SUM OF RS.98,82,207/- WAS PAID DURING THE YEAR LE AVING A BALANCE OF RS.4,59,945/-. 3. SUNLIGHT GAS EQUIPMENT : DURING THE YEAR PURCHASES AMOUNTING TO RS.71,19,801 /- WAS MADE FROM THIS PARTY. OPENING BALANCE OF RS.33,99,070/- AS ON 01,04.2010. A SUM OF RS.73,82,394/- WAS PAID DURING THE YEAR LE AVING A BALANCE OF RS.31,36,477/-. 4. UNITED TECHNOLOGIES: DURING THE YEAR PURCHASES AMOUNTING . TO RS.85,53,209/- WAS MADE FROM THIS PARTY. OPENING BALANCE OF RS.4,39,105/- AS ON 01.04 .2010. A SUM OF M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 13 RS.74,14,174/- WAS PAID DURING THE YEAR LEAVING A B ALANCE OF RS.11,82,945/-. 6. THUS WITH REGARD TO THE REGULAR SUPPLIERS, THE APPELLANT AVAILED THE CREDIT LIMIT OF LESS THAN 90 DAYS FOR PAYMENT, WHEREAS IN THE CASE OF ALLEGED BOGUS SUPPLIERS THERE WAS AN ABNORM AL EXTENSION OF CREDIT PERIOD NOTICED, WHICH IN SOME CASES HAD EXTE NDED UPTO ONE YEAR. GOING BY THE MARKET PRACTICES CREDIT LIMIT OF 3 . MONTHS IS CONSIDERED AS NORMAL. MORE OVER NO PRUDENT BUSINESS MAN WOULD EXTEND THE CREDIT LIMIT BEYOND 6 MONTHS TO 1 YEAR I N A TIGHT MARKET CONDITIONS. THEREFORE, GOING BY THIS CIRCUMSTANTIAL EVIDENCE ONE CAN COME TO A REASONABLE CONCLUSION THAT SUPPLIERS ARE BOGUS. THE PAYMENT PATTERN ITSELF INDICATES THE BOGUS NATURE O F THE TRANSACTION. APPLYING THE HUMAN PROBABILITY AND THE CIRCUMSTANTIAL EVIDENCE, IT CAN BE CONCLUDED THAT THE SUPPLIES BY TH6ABOVE PARTIES ARE BOGUS. 6.1 I FIND THE AO DID NOT MAKE ANY INDEPENDENT INVESTIGATION/ENQUIRY BY ISSUE OF NOTICE U/S. 133(6 ) EXCEPT IN THE CASE OF MIHIR SALES PVT. LTD. OR SUMMON U/S 131 TO ASCERTAIN THE TRUE NATURE OF THE TRANSACTION AND THE EXISTENCE OF THE SUPPLIERS. HE HAS SIMPLY CONCLUDED THE ASSESSMENT BY TREATING THE SUP PLIERS AS HAWALA .0EALERS PURELY BASED ON THE INFORMATION RECEIVED F ROM THE INVESTIGATION WING WHICH IN TURN RETIED ON THE SURV EYS CONDUCTED BY SALES TAX DEPARTMENT AND THE STATEMENT RECORDED BY INTERROGATING THE ALLEGED BOGUS SUPPLIERS. AS A PROOF OF DELIVERY OF THE MATERIAL AT THE APPEL LANT'S PREMISE THE APPELLANT COULD FURNISH COPIES OF FEW PURCHASE BILL S AND COPIES OF FEW DELIVERY CHALLAN. IT ALSO FAILED TO FILE THE WEIGHB RIDGE RECEIPTS, TRANSPORT RECEIPT ETC TO PROVE THAT REALLY THE MATERIALS PURC HASED WERE DELIVERED TO IT. AS DISCUSSED ABOVE . . LR/RR NUMBER AND DATE IN THE INVOICE WAS LEFT BLANK INDICATING THE DOUBTFUL DELIVERY OF THE MATER IAL. THE MODE OF DELIVERY AND THE EVIDENCE TOWARDS TRANSPORT OF THE MATERIAL IN THE FORM OF LRS OR TRANSPORT BILL ALSO COULD NOT BE FILED FOR THIS SUP PLY. THE MERE PAYMENT BY WAY OF ACCOUNT PAYEE CHEQUES ALONE COULD NOT ESTABL ISH THE GENUINE NATURE OF THE TRANSACTION. 6.3. THE APPELLANT HAD ADMITTED SALES AND JOB WORK RECEIPTS AMOUNTING TO.RS.9,22,60,771/-, RS.11,27,52,136/- AN D RS.15,16,83,843/- RESPECTIVELY FOR A.Y.2009-10, 2010-11 & 2011-12. IN MY VIEW WITHOUT PURCHASING THE MATERIALS, IT WOULD NOT HAVE BEEN PO SSIBLE FOR THE APPELLANT TO COMPLETE PROJECTS/ JOBWORK OF THIS MAG NITUDE. THE PURCHASES MADE CANNOT BE TREATED AS BOGUS PARTICULA RLY WHEN THE APPELLANT HAD COMPLETED THE CONTRACT OR THE MATERIA L PURCHASED WAS IN TURN SOLD, THE FACT OF WHICH HAS BEEN ENTERED INTO THE BOOKS OF ACCOUNT. AS FAR AS THE SALE WAS CONCERNED THE APPELLANT HAD FUL LY DISCLOSED THE ENTIRE SALES AND THE AO HAD NOT DISPUTED THIS. HOWEVER, BE CAUSE OF THE INFORMATION RECEIVED FROM SALES TAX DEPT. AND FROM THE INVESTIGATION WING OF THE DEPARTMENT, THE AO HAD STRONGLY PRESUME D THAT THE M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 14 PURCHASES WERE BOGUS. THEREFORE IT IS POSSIBLE THAT APPELLANT MIGHT HAVE PURCHASED THESE MATERIALS BY WAY OF CASH IN THE OPE N MARKET AND SUBSEQUENTLY OBTAINED BILLS FROM THESE HAWALA PARTIES, HENCE, IN MY VIEW THE ENTIRE PURCHASES CANNOT BE ADDED AS INCOME OF T HE APPELLANT. WHAT NEEDS TO BE TAXED IS ONLY THE PROFIT ELEMENT EMBEDDED IN THESE PURCHASES. 6.4 IDENTICAL ISSUE CAME UP BEFORE THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. BHOLAN ATH POLY FAB. PVT. LTD. REPORTED IN 355 ITR 200 (GUJ). THE ASSESSEE WA S ENGAGED IN THE BUSINESS OF TRADING IN FINISHED FABRICS. THE AO DIS ALLOWED, PURCHASE AMOUNTING TO RS.40,69,540/- AS BOGUS/UNEXPLAINED. T HE CIT(A) CONFIRMED THE ACTION OF THE AO. THE ISSUE WAS CARRI ED IN APPEAL BEFORE THE HON'BLE TRIBUNAL WHICH CONCURRED WITH TH E FINDING OF THE REVENUE AUTHORITIES BELOW THAT SUCH PURCHASE WAS MA DE FROM BOGUS PARTIES. AFTER ADVERTING TO THE FACTS AND DATA PLAC ED BEFORE IT, THE HON'BLE TRIBUNAL NOTED THAT THE ENTIRE 1,02,514 MET RES OF CLOTH WAS SOLD DURING THE YEAR AND 'THEREFORE ACCEPTED THE AS SESSEE'S CONTENTION THAT FINISHED GOODS PURCHASED BY THE APP ELLANT MAY NOT BE FROM THE PARTIES SHOWN IN THE ACCOUNTS BUT FROM OTHER PARTIES. IN VIEW OF THIS THE HON'BLE ITAT WAS OF THE VIEW TFIT ONLY PROFIT MARGIN EMBEDDED IN SUCH PURCHASES WOULD BE SUBJECTED TO TAX. THE HO N'BLE TRIBUNAL RELIED OP EARLIER DECISION IN THE CASE OF M/S. SAKET STEEL TRADERS VS. ITO (ITA NO.2801/AHD/2008 DT. 20/5/2008) AND ALSO MADE REFERENCE TO THE DECISION IN THE CASE OF VIJAYA PROTEIN VS. GIT 56 ITD 425 (AHD.). ON APPEAL BY THE DEPARTMENT, THE HON'BLE HC OF GUJARAT DISMIS SED THE APPEAL. THE HEAD NOTE IS AS UNDER: INCOME FROM UNDISCLOSED SOURCES- -ASSESSMENT(--ASSE SSEE TRADING IN FINISHED FABRICSWHETHER PURCHASES THEMSELVES BOGUS--WHETHER PARTIES FROM WHOM SUCH PURCHASES WERE MADE BOGUS--QUESTIONS OF FACTTRIBUN AL FINDING ASSESSEE DID PURCHASE CLOTH AND SELL FINISHED FABRICS--NOT ENTIR E PURCHASE PRICE BUT PROFIT ELEMENT EMBEDDED IN PURCHASES LIABLE TO TAX--INCOME -TAX ACT, 1061. THE ASSESSEE, FOR THE ASSESSMENT YEAR 2005-06, WAS ENGAGED IN THE BUSINESS OF TRADING IN FINISHED FABRICS. THE ASSESSING OFFICER , HOLD THAT PURCHASES WORTH RS. 40,69,546 WERE UNEXPLAINED AND DISALLOWED THE EXPEN DITURE CLAIMED BY THE ASSESSEE AND COMPUTED THE TOTAL INCOME OF RS. 41, 1 0, 187 IN SO FOR AS THE QUESTION OF BOGUS PURCHASES WAS CONCERNED, THE TRIB UNAL CONCURRED WITH THE REVENUE'S VIEWS THAT SUCH PURCHASES WERE MADE FROM BOGUS PARTIES. THE TRIBUNAL NOTED THAT THE ASSESSING OFFICER HAD ISSUED NOTICES TO ALL THE PARTIES FROM WHOM SUCH PURCHASES WERE ALLEGEDLY MADE. SUCH NOTICES WE RE RETURNED UNSERVED BY THE POSTAL AUTHORITIES WITH THE REMARK THAT THE ADDRESS ES WERE INCOMPLETE. THE INSPECTOR DEPUTED BY THE INCOME-TAX DEPARTMENT ALSO COULD NOT FIND ANY OF THE PARTIES AVAILABLE AT THE GIVEN ADDRESSES. THE ASSES SEE WAS UNABLE TO PRODUCE ANY CONFIRMATION FROM ANY OF THE PARTIES. THOUGH THE AS SESSEE HAD CLAIMED TO HAVE MADE PAYMENT BY ACCOUNT PAYEE CHEQUES, UPON VERIFIC ATION, IT WAS FOUND THAT THE CHEQUES WERE ENCASHED BY SOME OTHER PARTIES AND NOT BY THE SUPPOSED SELLERS. HOWEVER, THE TRIBUNAL WAS OF THE OPINION T HAT THOUGH THE PURCHASES MIGHT M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 15 HAVE BEEN MADE FROM BOGUS PARTIES, THE PURCHASES TH EMSELVES WERE NOT BOGUS. THE TRIBUNAL ADVERTED TO THE FACTS AND DATA ON RECORD AND CAME TO THE CONCLUSION THAT THE ENTIRE QUANTITY OF OPENING STOCK, PURCHASE S AND THE QUANTITY MANUFACTURED DURING THE YEAR 2005-06 WERE SOLD BY THE ASSESSEE. THEREFORE, HO PURCHASES OF THE ENTIRE 1,02,514 METRES OF CLOTH WERE SOLD DURIN G THE YEAR 2005-06. THE TRIBUNAL, THEREFORE, ACCEPTED THE ASSESSEE'S CONTEN TION THAT THE FINISHED GOODS WERE PURCHASED BY THE ASSESSEE, THOUGH NOT FROM THE PARTIES SHOWN IN THE ACCOUNTS, BUT FROM OTHER SOURCES. THE TRIBUNAL WAS OF THE OPINION THAT NOT THE ENTIRE AMOUNT, BUT THE PROFIT MARGIN EMBEDDED IN SU CH AMOUNT WOULD BE SUBJECTED TO TAX. ON APPEAL: HELD, DISMISS/RIG THE APPEAL, THAT WHETHER THE PURC HASES THEMSELVES WERE BOGUS OR WHETHER THE PARTIES FROM WHOM SUCH PURCHASES WER E ALLEGEDLY MADE WERE BOGUS WAS ESSENTIALLY A QUESTION OF FACT. THE TRIBU NAL HAVING EXAMINED THE EVIDENCE ON RECORD CAME TO THE CONCLUSION THAT THE ASSESSEE DID PURCHASE THE CLOTH AND SELL THE FINISHED FABRICS. THEREFORE, AS A NATURAL COROLLARY, NOT THE ENTIRE AMOUNT COVERED UNDER SUCH PURCHASES, BUT THE PROFIT ELEMENT EMBEDDED THEREIN WOULD BE SUBJECT TO TAX'. 6. 5 IN THE CASE OF MIS SANJAY OILCAKE INDUSTRIES V. COMMISSIONER OF INCOME-TAX REPORTED IN 316 ITR 274(GUJ), THE HON'BLE COURT HAD UPHELD THE ACTION OF THE CIT(A) AND ITAT IN DETERMINING ESTIMATED ADDITION O F 25% OF THE PURCHASES IN CASES INVOLVING BOGUS PURCHASES . THE HEAD NOTE IS AS UNDER- ASSESSMENTINCOME FROM UNDISCLOSED SOURCES--ADDITIO NS ON ACCOUNT OF INFLATED PURCHASE PRICE--ESTIMATE--NOT A QUESTION OF LAW--NO MATERIAL PRODUCED BY ASSESSEE TO DISPROVE INFLATED PURCHASESTRIBUNAL'S ORDER IN ACCORDANCE WITH LAWINCOME-TAX ACT. 1961. WHETHER AN ESTIMATE SHOULD BE AT A PARTICULAR SUM O R AT A DIFFERENT SUM, CAN NEVER BE A QUESTION OF LAW. FOR THE ASSESSMENT YEARS 1984-85 AND 1985-86, THE A SSESSING OFFICER MADE ADDITIONS TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF INFLATED PURCHASE PRICE OF OILCAKES. THE COMMISSIONER (APPEALS) HELD THAT 25 P ER CENT. OF THE VALUE OF THE PURCHASE PRICE WAS NOT GENUINE AND THE ADDITION MAD E BY THE ASSESSING OFFICER WAS ACCORDINGLY RESTRICTED TO 25 PER CENT, OF THE A MOUNT PAID TO THE PARTIES FROM WHOM THE ASSESSING OFFICER HAD DISALLOWED THE ENTIR E PURCHASES. ON CROSS-APPEALS BY THE ASSESSEE AND THE REVENUE, THE TRIBUNAL CONFI RMED THE ORDER OF THE COMMISSIONER (APPEALS). THE ASSESSEE SOUGHT MODIFIC ATION OF THE ORDER ON THE GROUND THAT THE TRIBUNAL HAD FAILED TO CONSIDER VAR IOUS PIECES OF EVIDENCE ENUMERATED BY IT IN THE APPLICATION. THE TRIBUNAL R EJECTED THE APPLICATION HOLDING THAT THERE WAS NO APPARENT ERROR ON RECORD WHICH WOULD PERMIT THE TRIBUNAL TO UNDERTAKE REVIEW OF ITS OWN ORDER. ON A REFERENCE TO THE HIGH COURT: HELD, THAT THE FINDING OF THE ASSESSING OFFICER HAD BEEN ACCEPTED BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL THAT (LIE A PPARENT SELLERS WHO HAD ISSUED SALE BILLS WERE NOT TRACEABLE. THE GOODS WER E RECEIVED FROM THE PARTIES OTHER THAN THE PERSONS WHO HAD ISSUED BILL'S FOR SU CH GOODS. THOUGH (LIE M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 16 PURCHASES WERE SHOWN TO HAVE BEEN MADE BY MAKING PA YMENT THEREFORE BY ACCOUNT PAYEE CHEQUES, AND THE CHEQUES HAD BEEN DEP OSITED IN BANK ACCOUNTS OSTENSIBLY IN THE NAME OF THE APPARENT SELLERS, THE REAFTER THE ENTIRE AMOUNTS HAD BEEN WITHDRAWN BY BEARER CHEQUES AND THERE WAS NO T RACE OR IDENTITY 01 THE PERSON WITHDRAWING THE AMOUNT FROM THE BANK ACCOUNTS. BOTH THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAD COME TO THE CONCLUSI ON THAT IN SUCH CIRCUMSTANCES, THE LIKELIHOOD OF THE PURCHASE PRICE BEING INFLATED COULD NOT BE RULED OUT AND THERE WAS NO MATERIAL TO DISLODGE SUC H FINDING. THE ASSESSEE HAD, BY EVIDENCE AVAILABLE ON RECORD, MADE IT POSSI BLE FOR THE RECIPIENTS NOT BEING TRACEABLE FOR THE PURPOSE OF INQUIRY AS TO WH ETHER THE PAYMENTS MADE BY THE ASSESSEE HAD BEEN ACTUALLY RECEIVED BY THE APPARENT SELLERS. HENCE, THE ESTIMATE MADE BY THE APPELLATE AUTHORITI ES DID NOT WARRANT INTERFERENCE. 6.6 VERY RECENTLY IN THE CASE OF COMMISSIONER OF INCOME -TAX V. SIMIT P. SHETH 356 ITR 451 (GUI), THE HON'BLE COURT HAS GIVEN A FINDING THAT ESTIMATI ON OF RATE OF PROFIT RETURN MUST NECESSARILY VARY WITH TH E NATURE OF BUSINESS AND NO UNIFORM YARDSTICK COULD BE ADOPTED AND FINALLY C ONFIRMED THE ACTION OF THE ITAT DETERMINING 12.5% OF THE BOGUS PURCHASES AS TH E PROFIT EM4DDED IN SUCH TRANSACTION. THE HEAD NOTE IS AS UNDER: INCOME FROM UNDISCLOSED SOURCES--ASSESSEE TRADING I N STEELFINDING THAT SOME PURCHASES RECORDED BY IT WERE NOT BOGUS BUT FR OM OTHER PARTIES NOT RECORDED IN BOOKS- ESTIMATION OF PROFIT ELEMENT EMBEDDED IN PURCHASES TRIBUNAL JUSTIFIED IN ESTIMATION ON THE BASIS OF FACTS-INCOME-TAX ACT, 19 61. ' THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRADING IN STEEL ON WHOLESALE BASIS. DURING THE COURSE OF THE REASSESSM ENT PROCEEDINGS FOR THE YEAR 2006-07, THE ASSESSING OFFICER NOTICED THAT SO ME OF THE SUPPLIERS OF STEEL TO THE ASSESSEE HAD MADE THEIR STATEMENTS ON OATH T O THE EFFECT THAT THEY HAD NOT SUPPLIED THE STEEL TO THE ASSESSEE BUT HAD ONLY PROVIDED SALE BILLS. IN TURN, THEY WERE RECEIVING A SMALL COMMISSION. THE A SSESSING OFFICER CONCLUDED THAT THE TOTAL PURCHASE OF RS. 41,04,903 CUMULATIVE LY MADE FROM THE THREE PARTIES WERE BOGUS. HE THUS TREATED SUCH PURCHASES AS BOGUS PURCHASES AND ADDED THE ENTIRE AMOUNT OF RS.41,04,903 TO THE GROS S PROFIT OF THE ASSESSEE. HE ALSO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE ASSESSEE'S BUSINESS PROFITS AT RS. 5 LAKHS. THE COMMISSIONER (APPEALS) HELD THAT THE ASSESSEE HAD MADE PURCHASES FROM OTHER PARTIES IN THE OPEN MARKE T. THEREFORE, HE RETAINED 30 PER CENT. OF THE PURCHASES COST AS THE PROBABLE PROFIT OF THE ASSESSEE. HE REDUCED THE ADDITIONS FROM RS.41,04,903 TO RS. 12,3 1,471 AND DELETED THE BALANCE OF RS. 26,73,432. WHILE DOING SO, HE DELETED THE ADDITION OF RS. 5 LAKHS AS MADE BY THE ASSESSING OFFICER ON THE GROUN D THAT THE ADDITION ON ACCOUNT OF BOGUS PURCHASES HAD ALREADY BEEN MADE. T HE TRIBUNAL WAS OF THE OPINION THAT TWELVE AND HALF PERCENT. OF THE DISPUT ED PURCHASES SHOULD BE RETAINED IN THE HANDS OF THE ASSESSEE AS BUSINESS P ROFITS. ON APPEAL TO THE HIGH COURT. M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 17 HELD, DISMISSING THE APPEAL, THAT THE COMMISSIONER (APPEALS) BELIEVED THAT THE PURCHASES WERE NOT BOGUS BUT WERE MADE FROM THE PARTIES OTHER THAN THOSE MENTIONED IN THE BOOKS OF ACCOUNT. THAT BEING THE POSITION, NOT THE ENTIRE PURCHASE PRICE BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES COULD BE ADDED TO THE INCOME OF THE ASSESSEE. IN ES SENCE, THE TRIBUNAL ONLY ESTIMATED THE POSSIBLE PROFIT OUT OF PURCHASES MADE THROUGH NON-GENUINE PARTIES. 'THE ESTIMATION OF RATE OF PROFIT RETURN MUST NECESSARILY VARY WITH TH E NATURE OF BUSINESS AND NO UNIFORM YARDSTICK COULD B E ADOPTED. 6.7 THE FACTS IN THE PRESENT CASE INDICATE THAT THE APPELLANT WAS NOT IN A POSITION TO PROVE THE EXISTENCE OF THE SUPPLIERS. T HE SUPPLIERS WERE FOUND TO HAVE BEEN ENGAGED IN PROVIDING BOGUS BILLS WITHOUT ACTUAL DELIVERY OF GOODS. MOREOVER FEW OF THE SUPPLIERS AR E NOT REGULAR PARTIES AND THEY WERE FOUND TO HAVE SUPPLIED ONLY DURING TH E YEAR AND THERE WERE NO SUPPLY EITHER IN THE EARLIER YEAR OR IN THE SUBS EQUENT YEAR. AS DISCUSSED ABOVE THIS CIRCUMSTANTIAL - EVIDENCE PROVE THE BOGUS NATURE OF THE TRANSACTION. ON CAREFUL ANALYSIS OF THE FINDING OF HON'BLE HIGH COURT OF GUJARAT IN THE ABOVE MENTIONED CASES, I AM OF THE FIRM VIEW THAT WITHOUT PURCHASE OF MATERIALS IT WAS NOT POSSIBLE F OR THE APPELLANT TO EITHER SELL THE ITEMS OR COMPLETE THE CONTRACT. AS MENTIONED ABOVE THE AO HAD NEVER DISPUTED OR EXAMINED THE ASPECT OF SAL ES. HENCE I AM OF THE FIRM BELIEF THAT THE APPELLANT HAD MADE CASH PURCHA SES FROM OTHER PARTIES WHICH WERE NOT RECORDED IN THE BOOKS. THE A PP ELLANT TOOK ONLY BILLS FROM THESE 9 PARTIES AS ACCOMMODATION TO EXPL AIN THE PURCHASES. THEREFORE THE ENTIRE PURCHASE FROM THESE 9 PARTIES CANNOT BE ADDED AS BOGUS AND WHAT NEEDS TO BE TAXED IS THE PROFIT ELEM ENT EMBEDDED IN SUCH TRANSACTION. PROFIT ESTIMATES RANGING FROM 12. 5% TO 25% HAS BEEN UPHELD BY THE HON'BLE GUJARAT HIGH COURT DEPENDING UPON THE NATURE OF THE BUSINESS. AS HELD IN THE CASE OF SIMIT P. SHETH (SUPRA) NO UNIFORM YARDSTICKS COULD BE APPLIED TO ' ESTIMATE THE RATE OF PROFIT AND IT VARY WITH , THE NATURE OF BUSINESS. TAKING ALL THE FACTS INTO C ONSIDERATION AND THE FINDINGS OF THE HON'BLE COURTS ON THIS ISSUE, I AM OF THE VIEW THAT ESTIMATION OF 15% OF PROFIT WOULD MEET THE ENDS OF JUSTICE. THEREFORE, I ESTIMATE PROFIT @ 15% OF THE TOTAL ALL EGED BOGUS PURCHASE AS INCOME OF THE APPELLANT WHICH IS WORKED OUT AS UNDE R:- SR. NO. A.Y. TOTAL BOGUS PURCHASES ESTIMATED PROFIT @ 15% OF THE PURCHASES BALANCE RELIEF 1 2009 - 10 1,56,47,52 7 23,47,129 1,33,00398 2 2010 - 11 93,86,559 14,07,984 79,78,575 3 2011 - 12 68,94,851 10,34,228 58,60,623 GROUND NO. 1 & 2 RAISED IN ALL THE THREE YEARS ARE, THEREFORE, PARTLY ALLOWED. M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 18 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, IT IS NOTED THAT THE IN FORMATION WAS RECEIVED FROM THE INVESTIGATION WING OF THE SAL ES TAX DEPARTMENT THAT THEY HAVE RECORDED THE STATEMENT OF CERTAIN HAWALA OPERATORS, WHO HAVE CONFIRMED TO HAVE GIVEN BOGUS BILLS TO CERTAIN PARTIES INCLUDING THE PRESENT ASSE SSEE. THE DETAILS OF SUCH BOGUS BILLS WERE ALSO CLAIMED TO BE ACCEPTED BY THE ASSESSEE. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTIONS, NOTICE U/S 133(6) OF THE ACT WERE ISS UED TO THE PARTIES CALLING FOR THE FOLLOWING INFORMATION. PURCHASE ORDERS, INVOICES, LORRY RECEIPTS, CHECK PO ST ENTRIES, GATE ENTRIES, GOODS RECEIVED NOTES, ISSUE OF MATERI AL, PRODUCTION RECORD OF CONSUMPTION, DELIVERY CHALLANS , OCTROI CHARGES IN RELATION TO THE GOODS SUPPLIED TO THE AS SESSEE FROM AY. 2006-07 TO TILL DATE. COPIES OF INCOME TAX RETURNS, COMPUTATION OF INCO ME, BALANCE SHEET AND PROFIT & LOSS ACCOUNT-WITH ANNEXU RES AND SCHEDULES THERETO FOR THE AY. 2011-12. EXTRACT OF BANK STATEMENT(S) REFLECTING THE RELEV ANT ENTRIES IN RELATION TO TRANSACTIONS WITH THE ASSESSEE COMPANY TILL DATE . COPY OF LEDGER ACCOUNT IN RELATION TO THE ASSESSE E COMPANY FROM AY. 2006-07 TO TILL DATE. ANY OTHER INFORMATION THAT MAY BE PARTED WITH, IN CONNECTION WITH THE TRANSACTIONS WITH THE ASSESSEE DURING THE YEAR . 2.4. DURING ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE WAS INFORMED THAT NOTICES ISSUED TO THE PA RTIES HAVE RETURNED UN-SERVED. IN THE ABSENCE OF GENUINENESS OF M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 19 TRANSACTION, THE ADDITIONS WERE MADE AS DETAILS IN THE RESPECTIVE APPEAL AS BOGUS PURCHASES AND ADDED TO T HE TOTAL INCOME. ON APPEAL BEFORE THE LD. COMMISSIONER OF IN COME TAX (APPEAL), THE FACTUAL MATRIX WAS CONSIDERED AND THE LD. COMMISSIONER OF INCOME TAX (APPEAL) DIRECTED THE AS SESSEE TO ESTIMATE THE PROFIT AT THE RATE OF 15% (AS DISCUSSE D IN PRECEDING PARA OF THIS ORDER). THE REVENUE IS AGGRI EVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. 2.5. UNDER THE FACTS NARRATED HEREINABOVE AND ALSO AVAILABLE ON RECORD, EVEN IT IS PRESUMED THAT THE P URCHASES ARE BOGUS AND THE ASSESSEE WAS NOT IN A POSITION TO PROVE THE EXISTENCE OF THE SUPPLIERS ADMITTEDLY, WITHOUT PURC HASES OF THE MATERIAL, THERE CANNOT BE ANY SALE. EVEN OTHERWISE, THE ASSESSING OFFICER HAS NOT EXAMINED THE ASPECT OF SA LE. EVEN AS PER THE PROVISION OF SECTION 44AD OF THE ACT, WHICH IS A SPECIAL PROVISION FOR COMPUTING PROFIT & GAINS ON BUSINESS ON PRESUMPTIVE BASIS, THE PROFIT IS TO BE COMPUTED EQU AL TO 8% OF THE TOTAL TURNOVER OR GROSS RECEIPT OF THE ASSESSEE . IN THE PRESENT APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS DIRECTED TO ADOPT THE PROFIT AT 15% OF THE ALLE GED BOGUS PURCHASES AND NO APPEAL HAS BEEN FILED BY THE ASSES SEE BY ACCEPTING THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEAL), THEREFORE, IN OUR VIEW, THE FIRST APPELLA TE AUTHORITY IS QUITE JUSTIFIED TO SAFEGUARD THE INTEREST OF THE RE VENUE, CONSEQUENTLY, WE FIND NO INFIRMITY IN THE CONCLUSIO N OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), HIS STAND IS A FFIRMED, RESULTING INTO DISMISSAL OF APPEALS OF THE REVENUE. M/S. PCI ANALYTICS PVT. LTD. ITA NO.1913 TO 1915/MUM/2015 20 FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 23/11/2016. SD/- SD/- ( N.K. PRADHAN ) (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; * DATED : 02/12/2016 F{X~{T? P.S / +! !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 0./ / THE RESPONDENT. 3. 1 1 2$ ( ,- ) / THE CIT, MUMBAI. 4. 1 1 2$ / CIT(A)- , MUMBAI 5. 4!5$ , 1 ,-(, , / DR, ITAT, MUMBAI 6. 7'8 / GUARD FILE. ! / BY ORDER, 04-$$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI,