ITO WD 3(5), KALYAN V. JAYESH VELJI KARIA, DOMBIVALI

ITA 3135/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9437 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 01-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Assessee Lawyers: NEELAM C JADHAV
• Keywords: Bogus purchase
• Section: 69C; 143(3); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L , MUMBAI BEFORE S HRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 3135 /MUM/20 1 7 ASSESSMENT YEAR: 2011 - 2012 THE INCOME TAX OFFICER, WARD - 3(5), 2 ND FLOOR, RANI MANSION, KALYAN - MURBAD ROAD, NR . S.B.I., KALYAN (W) - 421301 VS. SHRI JAYESH VELJI KARIA, 01, RAKHMABAI JADHAV NIWAS, DHORTE COMPOUND, DR. R.P. ROAD, DOMBIVLI (E), 421201 PAN: ABLPK8953G (APPELLANT) (RESPONDENT) ITA NO. 3108 /MUM/201 7 ASSESSMENT YEAR: 2011 - 2012 SHRI JAYESH VELJI KARIA, (PROP. JAINAM TRADERS), C - 38, MUNSHI ESTATE, 1 ST FLOOR, M.G. ROAD, ABOVE MAHAVIR JAIN DUDHALAY, MULUND (WEST), MUMBAI 400080 PAN: ABLPK8953G VS. THE INCOME TAX OFFICER, WARD - 3(5), KALYAN (APPELLANT) (RESPONDENT) ITA NO. 3134 /MU M/201 7 ASSESSMENT YEAR: 2011 - 2012 THE INCOME TAX OFFICER, WARD - 3(5), 2 ND FLOOR, RANI MANSION, KALYAN - MURBAD ROAD, NR. S.B.I., KALYAN (W) - 421301 VS. SHRI JITESH VELJI KARIA, 01, SURESH ANNA DHORTE BLDG., NEW BHARAT CHS, DR. R.P. ROAD, DOMBIVLI (E) 421201 PAN: AGOPK7897F (APPELLANT) (RESPONDENT) 2 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 ITA NO. 3109 /MUM/201 7 ASSESSMENT YEAR: 2011 - 2012 SHRI JITESH VELJI KARIA, (PROP. KARIA TRADERS), 01, SURESH ANNA DHORTE BLDG., NEW BHARAT CHS, DR. R.P. ROAD, DOMBIVLI (E) 421201 PAN: AGOPK7897F VS. THE INCOME TAX OFFICER, WARD - 3(5), KALYAN (APPELLANT) (RESPONDENT) REVENUE BY : SHRI M.V. RAJGURU ( SR. D R) ASSESSEE BY : M S. NEELAM C. JADHAV (A R) DATE OF HEARING: 03/10 /201 7 DATE OF PRONOUN CEMENT: 06 / 10 /201 7 O R D E R PER BENCH THESE ARE THE TWO CROSS APPEALS ONE FILED BY THE REVENUE AND ASSESSEE JAYESH VELJI KARIA & ANOTHER FILED BY THE REVENUE AND ASSESSEE JITESH VELJI KARIA AGAINST TWO ORDER S DATED 27/02/2017 PASSED BY THE COMMISSI ONER OF INCOME TAX (APPEALS) - 3 , NASIK , PERTAINING TO THE ASSESSMENT YEAR 2011 - 12, WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED BOTH APPEAL FILED BY ASSESSEE JAYESH VELJI KARIA AND JITESH VELJI KARIA AGAINST ASSESSMENT ORDERS PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. SINCE BOTH THE APPEALS/CROSS APPEALS PERTAIN TO RELATED PARTIES AND THE FACTS AND ISSUES INVOLVED IN BOTH THE APPEALS ARE COMMON, BOTH THE CROSS APPEALS WERE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSE D OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 ITA NO. 3135/MUM/2017 (ASSESSMENT YEAR: 2011 - 2012 ) BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , ENGAGED IN THE WASTE PAPER BUSINESS, FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR D ECLARING THE TOTAL INCOME OF RS. 7,10,450/ - . THE RETURN WAS PROCESSED U/S 143 (1) OF THE ACT. SUBSEQUENTLY, AO RECEIVED INFORMATION FROM THE DIRECTOR GENERAL OF INCOME TAX (INV.) (DGIT ) THAT THE SALES TAX DEPARTMENT, MUMBAI HAS UNEARTHED A RACKET INVOLVED IN ISSUING BOGUS INVOICES TO ALLOW THE TRADERS TO CLAIM TAX CREDITS . T HERE WERE MORE THAN 37000 BENEFICIARIES, WHO CLAIMED SUCH PURCHASES AS WELL AS BOGUS TAX C REDITS. AS PER THE LIST RECEIVED, THE ASSESSEE WAS ONE OF SUCH BENEFICIARIES. FROM VERIFICATION, IT CAME TO THE NOTICE THAT D URING THE RELEVANT YEAR, THE A SSESSEE OBTAINED BOGUS PURCHASE BILLS FROM 13 HAWALA DEALERS (MENTIONED IN THE ASSESSMENT ORDER) AND CLAIMED PURCHASE S WORTH RS. 1,17,68,162/ - FROM THE SAID DEALERS. 2. ACCORDINGLY, NOTICE U/S 14 8 OF THE ACT WAS SERVED UPON THE ASSESSEE. THE ASSESSEE WAS FURTHER ASKED TO FURNISH THE REQUIRED INFORMATION BY ISSUING NOTICE U/S 142 (1) AND 143 (2) IN RESPONSE THEREOF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE (AR) FILED THE AUDITED STATEMENTS OF A CCOUNTS ALONG WITH FORM NO. 3CB AND 3CD. THE AR OBJECTED THE RE - OPENING OF ASSESSMENT AND CONTENDED THAT THE ENTIRE PURCHASE S ARE GENUINE AND THE ASSESSMENT MAY BE COMPLETED ON THE BASIS OF ANALYSIS OF GROSS PROFIT. THE LD. AR FURTHER CONTENDED THAT THE AO CANNOT DISALLOW THE PURCHASES MERELY ON THE GROUND THAT SUMMONS ISSUED TO THE PARTIES WERE RETURNED UN - SERVED. THE AO AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MADE BY THE AO IN THE LIGHT OF THE EVIDENCE ON RECORD , REJECTED THE CONTENTION OF THE ASS ESSEE AND TREATED THE ENTIRE AMOUNT OF PURCHASES MADE FROM THE AFORESAID PARTIES AS BOGUS AND ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE. 4 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 3. IN THE FIRST APPEAL, THE LD. CIT (A) AFTER HEARING THE ASSESSEE RESTRICTED THE ADDITION TO 12.5% OF THE AMOUNT OF UNPROVED PURCHASES OF RS. 1,17,68,162/ - . THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) BY RAISING FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE HONBLE CIT (A) ERRED IN RESTRICTING THE DISALLOWANCE MADE U/S 69C FROM RS. 1,17,68,162/ - TO RS. 14,71,020/ - BY SUSTAINING THE DISALLOWANCE @ 12.5% OF THE TOTAL UNPROVED PURCHASES. 1.1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT (A) ERRED IN GRANTING THE ABOVE RELIEF TO THE ASSESSEE WITHOUT APPRECIATING THE DECISION OF HONBLE GUJARAT HIGH COURT AND APPROVED BY HONBLE SUPREME COURT IN THE CASE OF N.K. PROTEINS LTD VS. DCIT, IN SPECIAL LEAVE APPEAL ( CC NO. 769 OF 2017) WHEREIN IT WAS HELD THAT WHEN THE ENTIRE PURCHASES HAVE BEEN FOUND TO BE BOGUS THEN CONFIRMING DISALLOWANCE ON PERCENTAGE BASIS GOES AGAINST THE PRINCIPLE OF SECTION 68 & 69C. 4. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBM ITTED THAT THE ASSESSMENT WAS RE - OPENED ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING OF INCOME TAX DEPARTMENT THAT THE APPELLANT/ASSESSEE HAD OBTAINED BOGUS BILLS IN ORDER TO SHOW PURCHASES AMOUNTING TO RS. 1,17,68,162/ - DURING THE FINANCIA L YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. SINCE, T HE SUBMISSIONS MADE IN BY THE ASSESSE E WERE NOT PLAUSIBLE AND THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE TO PROVE THE ACTUAL DELIVERY OF THE MATERIAL PURCHASED , THE AO RIGHTLY MADE THE AD DITION IN QUESTION . MOREOVER, THE INVESTIGATION CARRIED OUT BY THE SALES TAX DEPARTMENT HAS ESTABLISHED THAT THE SAID PARTIES USED TO ISSUE BOGUS BILLS TO THE DIFFERENT COMPANIES INCLUDING THE ASSESSEE IN THE PRESENT APPEAL. THE LD. DR RELYING ON THE VARIO US DECISIONS INCLUDING THE DECISION OF HONBLE HIGH COURT OF GUJARAT RENDERED IN N.K. PROTEIN LTD. VS. DCIT IN TAX APPEAL NO. 240, 241 261, 242 AND 260 OF 2003, UPHELD BY THE HONLE SUPREME 5 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 COURT , SUBMITTED THAT IF PURCHASES ARE NOT PROVED TO THE GENUINE T HEN THE ENTIRE PURCHASE NEEDS TO BE TAKEN AS INCOME OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) HAS WRONGLY RESTRICTED THE ADDITION TO 12.5 % OF THE TOTAL AMOUNT AS AGAINST 100% ADDITION MADE BY THE AO. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE COPIES OF INVOICES IN RESPECT PURC HASES IN QUESTION AND LEDGER ACCOUNTS OF ALL THE PARTIES WERE FILED BEFORE THE AO. THE LD. COUNSEL FURTHER SUBMITTED THAT PAYMENTS WERE MADE BY BANKING CHANNELS. THE AO HAS NOT REJECTED THE SALES MADE BY THE ASSESSEE DURING THE RELEVANT FINANCIAL YEAR AND AS PER THE SETTLED LAW FOR EVERY SALE THERE HAS TO BE CORRESPONDING PURCHASES. IF SALES BILLS ARE BEING ACCEPTED THEN THE TOTAL PURCHASES AMOUNT SHOULD BE ACCEPTED. IT WAS FURTHER POINTED OUT THAT GROS S PROFIT OF THE ASSESSEE DURING THE YEAR 2010 - 11, 2011 - 12 AND 2012 - 13 WAS 5.66%, 4.03% AND 3.38% RESPECTIVELY AND IF THE ADDITION IN QUESTION IS MADE THEN GROSS PROFIT INCREASES TO 22.13% WHICH IS NOT POSSIBLE IN WASTE PAPER BUSINESS. LD. COUNSEL FURTHER S UBMITTED THAT IN THE LIGHT OF THE AFORESAID FACTS, THE LD. CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION. WITHOUT PREJUDICE, THE LD. COUNSEL SUBMITTED THAT IN ANY CASE ADDITION OF 12% IS ON THE HIGHER SIDE. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND AL SO GONE THROUGH THE MATERIAL ON RECORD. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT (A) HAS WRONGLY RESTRICTED THE ADDITION TO THE EXTENT OF 12.5 % OF THE TOTAL ALLEGED BOGUS PURCHASES. THE LD. CIT(A) HAS RESTRICTED THE ADDITION HOLDING AS UNDER: - 6. ON GOING THROUGH THE FACTS OF THE CASE DISCUSSED ABOVE, I AM OF THE CONSIDERED OPINION THAT THE PURCHASES OF RS. 1,17,68,162/ - MADE BY THE APPELLANT FROM VARIOUS PARTIES ARE FROM HAWALA DEALERS. THESE DEALERS ONLY GAVE THE BILLS AND THERE WAS NO ACT UAL SALE AND PURCHASE TRANSACTIONS AND NO TRANSFER OF GOODS. AT THE SAME TIME, WHEN THE SALES ARE ACCEPTED BY AO, WHICH WERE NOT POSSIBLE WITHOUT CORRESPONDING 6 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 PURCHASES. FURTHER IF ENTIRE BOGUS PURCHASES ARE ADDED TO THE INCOME OF THE APPELLANT THEN THE N ET PROFIT RATE WILL GO UP TO 22% WHICH IS ABNORMAL FOR THE WASTE PAPER BUSINESS. THEREFORE, IT CAN BE INFERRED THAT THE APPELLANT HAD MADE PURCHASES IN THE OPEN MARKET WHICH WERE USED IN TRADING AND HAD OBTAINED BILLS FROM THE HAWALA OPERATORS. IT IS NOT K NOWN AT WHAT PRICE THE APPELLANT ACTUALLY MADE THE PURCHASES FROM THIRD PARTIES. UNDER SUCH CIRCUMSTANCES THE LIKELIHOOD OF THE PURCHASES BEING INFLATED CANNOT BE RULED OUT AND THERE IS NO MATERIAL TO DISLODGE SUCH FINDINGS. IN THIS PROCESS THE APPELLANT S AVED ON THE SALES - TAX/VAT AND ENHANCED HIS PROFIT BY MANIPULATING THE PURCHASES. THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE CIT - 1 VS. SIMIT P. SHETH IS APPLICABLE TO APPELLANT CASE. THEREFORE, IT WOULD BE APPROPRIATE IF 12.5% OF THE AMOUNT OF U NPROVED PURCHASES OF RS. 1,17,68,162/ - AMOUNTING TO RS. 14,71,020/ - IS DISALLOWED TO THE APPELLANT, WHICH WILL BE OVER AND ABOVE THE PROFITS SHOWN BY THE APPELLANT IN HIS RETURN OF INCOME. 7. WE NOTICE THAT T HE CONTENTION OF THE ASSESSEE BEFORE THE AUTH ORITIES BELOW WAS THAT EITHER THE ADDITION SHOULD BE DELETED OR THE SAME SHOULD BE DETERMINED ON GP BASIS IN ACCORDANCE WITH THE DECISION S OF VARIOUS BENCHES OF THE INCOME TAX TRIBUNAL. WE FURTHER NOTICE THAT THE ASSESSEE SUBMITTED THE COPIES OF INVOICES I N RESPECT OF PURCHASES IN QUESTION AND LEDGER ACCOUNTS OF ALL THE PARTIES DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE FURTHER ESTABLISHED THAT PAYMENTS WERE MADE BY BANKING CHANNELS. ON THE BASIS OF THE SAID DOCUMENTS THE ASSESSEE TRIED TO PROVE THE GE NUINENESS OF THE PURCHASES IN QUESTION . BUT THE AO REJECTING THE SUBMISSIONS, MADE ADDITION OF THE ENTIRE AMOUNT TO THE INCOME OF THE ASSESSEE, HOWEVER, NOT REJECTED THE SALES MADE BY THE ASSESSEE DURING THE RELEVANT FINANCIAL YEAR . HENCE, THE ACTION OF AO IN MAKING ADDITION OF ENT I RE AMOUNT TO THE INCOME IS NOT IN ACCORDANCE WITH THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ EXIMP ENTERPRISES PVT. LTD. 372 ITR 619 (BOM) AND CIT VS. U M SHAH 90 ITR 396 (BOMB.) SINCE, TH E ACTION OF AO IS NOT JUSTIFIABLE, THE LD CIT(A) HAS R IGHTLY MODIFIED THE ASSESSMENT ORDER BY RESTRICTING THE ADDITION. WHILE UPHOLDING THE DECISION OF MUMBAI TRIBUNAL THE HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ 7 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 EXIMP ENTERPRISES PVT. LTD. (SUPRA) HAS HELD THAT MERELY BECAUSE THE SUPPLIERS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE CIT (A) ONE COULD NOT CONCLUDE THAT THE PURCHASES WERE NOT MADE BY THE RESPONDENT/ASSESSEE. 8. SO FAR AS THE ADDITION OF 12.5% MADE BY THE LD. CIT(A) IS CONCERNED , T HE HONBLE GUJRAT HIGH COURT IN CIT VS. SIMIT P. SETH 356 ITR 451(GUJ) HAS UPHELD THE DECISION OF THE TRIBUNAL AND SUSTAINED THE ADDITION 12.5% OF THE TOTAL BOGUS PURCHASES HOLDING THAT ONLY PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE ADDED TO INCO ME OF THE ASSESSEE. HENCE, I N OUR CONSIDERED VIEW, THE ORDER PASSED BY THE LD. CIT(A) IS BASED ON THE LAW LAID DOWN BY THE HONBLE BOMBAY HIGH COURT AND THE HONBLE GUJARAT HIGH COURT IN THE AFORESAID CASES. ON THE OTHER HAND THE LAW RELIED UPON BY THE LD . DR ARE DISTINGUISHABLE ON FACTS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT (A) TO INTERFERE WITH. HENCE, WE UPHOLD THE ORDER OF THE LD. CIT (A) AND DISMISS ALL THE GROUND S OF APPEAL FILED BY THE REVENUE. ITA NO. 3108/MUM/2017 (ASSESSMENT YEAR: 2011 - 2012 ) THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 14,71,020/ - I.E. 12.5% OF ALLEGED UNPROVED PURCHASES, WITHOUT APPRECIATING THAT ALL THE PURCHASES WERE GENUINE AND SUPPORTED BY DOCUMENTARY EVIDENCE AND QUANTITATIVE DETAILS WERE FURNISHED AND BOOKS OF ACCOUNT IS NOT REJECTED HENCE ADDITION CONFIRMED BY THE CIT (A) MAY BE DELETED. 2. WITHOUT PREJUDI CE TO ABOVE THE ADDITION OF 12.5% OF ALLEGED UNPROVED PURCHASES IS VERY MUCH HIGH AND WITHOUT ANY BASIS, THEREFORE SAME MAY BE DIRECTED TO BE DELETED. 8 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 2. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER VIDE WHICH THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO 12.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES MADE BY THE ASSESSEE . SINCE, WE HAVE UPHELD THE FINDINGS OF THE LD. CIT(A) AND DISMISSED THE REVENUES APPEAL, THE GROUNDS OF ASSESSEES APPEAL DO NOT SURVIVE. HENCE, WE DISMISS THE P RESENT APPEAL PREFERRED BY THE ASSESSEE. I TA NO. 3134/MUM/2017 (ASSESSMENT YEAR: 2011 - 2012 ) THIS APPEAL PERTAINS TO THE ASSESSEE JITESH VELJI KARIA. THE FACTS OF THIS CASE ARE ALMOST IDENTICAL TO THE FACTS OF THE CASE OF THE ASSESSEE JAYESH VELJI KARIA, DISCUSSED ABOVE, EXCEPT THE AMOUNT OF ADDITION MADE BY THE AO. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE HONBLE CIT (A) ERRED IN RESTRICTING THE DISALLOWANCE MADE U/S 69C FROM RS. 1,47,63,750/ - TO RS. 18,45,468/ - BY SUSTAINING THE DISALLOWANCE @ 12.5% OF THE TOTAL UNPROVED PURCHASES. 1.1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN GRANTING THE ABOVE RELIEF TO THE ASSESSEE WITHOUT APPRECIATING THE DECISION OF HONBLE GUJARAT HIGH COURT AND APPROVED BY HONBLE SUPREME COURT IN THE CASE OF N.K. PROTEINS LTD VS. DCIT, IN SPECIAL LEAVE APPEAL (CC NO. 769 OF 2017) WHEREIN IT WAS HELD THAT WHEN THE ENTIRE PURCHASES HAVE BEEN FOUND TO BE BOGUS THEN CONFIRMING DISALLOWANCE ON PERCENTAGE BASIS GOES AGAINST THE PRINCIPLE OF SECTION 68 & 69C. 2. SINCE, IN THE IDENTICAL APPEAL WE HAVE UPHELD THE ORDER PASSED BY THE LD. C IT(A) RESTRICTING THE ADDITION TO 12.5% OF THE TOTAL BOGUS PURCHASES MADE BY THE ASSESSEE DURING THE ASSESSMENT YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND DISMISSED THE APPEAL OF THE 9 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 REVENUE, CONSISTENT WITH OUR FINDINGS, WE DISMISS THIS APPEAL OF THE REVENUE FOR THE SAME REASONS. WE DIRECT THE AO TO COMPUTE THE ADDITION IN TERMS OF THE ORDER OF THE LD. CIT(A) . ITA NO. 3109/MUM/2017 (ASSESSMENT YEAR: 2011 - 2012 ) THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 18,45,468/ - I.E. 12.5% OF ALLEGED UNPROVED PURCHASES, WITHOUT APPRECIATING THAT ALL THE PURCHASES WERE GENUINE AND SUPPORTED BY DOCUMENTARY EVIDENCE AND QUANTITATIVE DETAILS WERE FURNISHED AND BOOKS OF ACCOUNT IS NOT REJECTED HENCE ADDITION CONFIRMED BY THE CIT (A) MAY BE DELETED. 2. WITHOUT PREJUDICE TO ABOVE THE ADDITION OF 12.5% OF ALLEGED UNPROVED PURCHASES IS VERY MUCH HIGH AND WITHOUT ANY BASIS, THERE FORE SAME MAY BE DIRECTED TO BE DELETED. 2. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER VIDE WHICH THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO 12.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES. SINCE, WE HAVE UPHELD THE FINDINGS OF THE LD. CIT(A) AND DISMISSED THE REVENUES APPEAL, THE GROUNDS OF ASSESSEES APPEAL DO NOT SURVIVE. HENCE, WE DISMISS THE PRESENT APPEAL PREFERRED BY THE ASSESSEE. IN THE RESULT, BOTH THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE FOR ASSESSME NT YEAR 2011 - 12 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH . OCTOBER , 2017 . SD/ - SD/ - ( B.R. BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 06 / 10 / 2017 10 ITA NO S . 3135, 3108, 3134 & 3109/MUM/2017 ASSESSMENT YEAR: 2011 - 2012 ALINDRA PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI