ASST CIT 32(3), MUMBAI V. RPS CHIRAG NT (CONSORTIUM), MUMBAI

ITA 3259/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0112 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 18-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained expenditure
• Section: 69C; 133(6)

Judgement Text

P A G E | 1 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI G.S.PANNU , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO.3259 /MUM/201 5 ( / ASSESSMENT YEAR: 201 1 - 12 ) ASSTT. C IT - 32(3) , ROOM NO. 108, 1 ST FLOOR, BLDG. NO. C - 11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 / VS. RPS CHIRAG NT (CONSORTIUM) 104 - 105 GOPAL PURI, S.V. ROAD, BORIVALI(E) MUMBAI - 400066 ./ ./ PAN/GIR NO. AAAAR70681 ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MR. SAURABH KUMAR RAI / RESPONDENT BY : S H . HITESH SHAH / DATE OF HEARING : 06/06 /2017 / DATE OF PRONOUNCEMENT : 23 /06/2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST T HE ORDER PASSED BY THE CIT(A) - 44, MUMBAI, DATED 16.02.2015, WHICH IN ITSELF ARISES FROM THE OR DER PASSED BY THE A.O U/S. 143 (3) OF THE INCOME TAX ACT, 1961, ( FOR SHORT ACT ), DATED 25.03.2014 . THE REVENUE ASSAILING THE ORDER OF THE CIT (A) , TO THE EXTENT THE LATTER HAD PARTLY P A G E | 2 ALLOWED THE APPEAL OF THE ASSESSEE , HAD THEREIN RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: - '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID.CIT(A) ERRED IN RESTRICTING OF ADDITION OF UNEXPLAI NED EXPENDITURE TO RS. 7,97,441/ - AS AGAINST RS.99,68,007/ - ON ACCOUNT OF BOGUS PURCHASES U/S 69C OF THE ACT WITHOUT GIVING ANY COGENT REASONS.' 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID.CIT(A) ERRED IN RELYING UPON GUJARAT HIGH COURT'S JUDGMENT IN THE CASE OF CIT VS. SIMIT P. SHETH WITHOUT APPRECIATING THAT THE FACTS INVOLVED IN THE APPELLANT'S CASE ARE DIFFERENT FROM T H E FACTS OF THE ABOVE CASE LAW. 3. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID . CIT(A) ERRED IN NOT APPRECIATING THAT THE ASSESSEE HAS NOT PRODUCED ANY COGENT EVIDENCE TO SUBSTANTIATE THE FACT THAT HE HAS TAKEN ACTUAL DELIVERY OF GOO D S PURCHASED FROM THESE PARTIES. 4 ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID . CIT(A) GROSSLY ERRED IN NOT APPRECIATING THE FACT THAT THE NOTICES UNDER SECTION 133(6) ISSUED TO PARTIES FROM WHOM ALLEGED BILLS WERE RECEIVED WERE RETURNED UNDELIVERED BY THE POSTAL AUTHORITIES WITH THE REMARK 'NOT AVAILABLE AT THIS ADDRESS' AND THE ASSESSEE HAS ALSO FAILED TO PRO DUCE THE PARTIES BEFORE THE AO. 5 ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CIT (A) GROSSLY ERRED IN NOT APPRECIATING THE FACT THAT THE INQUIRIES MADE BY THE ASSESSING OFFICER THROUGH THE WARD INSPECTOR ALSO CORROBORATED THE FACT THAT THESE PARTIES ARE NOT RESIDING ON THE ADDRESSES GIVEN BY TH E ASSESSEE. 6 ON THE FACT AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW, THE LD . CIT (A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE AO OVERLOOKING THE STATEMENT GIVEN BY THE PARTIES AND EXPLICIT FINDING OF THE INVESTIGATION CARRIED OUT BY THE SALES TAX DEPARTMENT AND CORROBORA TED BY THE ENQUIRIES OF THE AO. 7 THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O BE RESTORED. 8 THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM WHICH IS A CONTRACTOR OF GOVERNMENT AND SEMI GOVERNMENT P A G E | 3 DEPARTMENT S FOR VARIOUS CIVIL WORKS HAD E - FILED ITS RETURN OF INCOME ON 24.09.2011 DECLARING TOTAL INCOME AT RS.63,90,920/ - , WHICH WAS PROCESSED AS SUCH U/S. 143(1) OF THE ACT . THE CASE OF THE ASSESSEE WAS THEREAFTER TAKEN UP FOR SCRUTINY ASSESSMENT U/S 143(2). THAT THE A.O ON THE BASIS OF INFORMATION RECEIVED F ROM THE MAHARASHTRA SALE S TAX DEPARTMENT THAT THERE WERE CERTAIN DEALERS OPE RATING IN THE MARKET WHO WERE ONLY PROVIDING ACCO MMODATION ENTRIES AND WERE NOT GENUINE SELLERS , THEREIN OBSERVED THAT 8 SUCH BLACKLISTED CONCERNS FIGURED IN THE LIST OF THE PARTIES FROM WHOM THE ASSESSEE HAD CLAIMED TO HAVE MADE PURCHASES DURING THE YEAR UNDER CONSIDERATION, AS UNDER: - SR. NO. NAME OF THE PARTY AMOUNT (RS.) 1 M/S VARDHMAN TRADERS 6,04,763 2 M/S SUBH ENTERPRISES 27,77,129 3 PARAS ENTERPRISES 6,00,827 4 MERIDIAN TRADING CO. 10,51,748 5 BLUE NITE ENTERPRISES 7,02,751 6 ARYEN SALES CORPORATION 18,33,299 7 ARIHANT TRADERS 13,66,622 8 AAYUSHI NITE ENTERPRISES 1030,868 TOTAL 99,68,007 3. THE A.O IN ORDER TO INDEPENDENTLY VERIFY THE GENUINENESS OF THE AFORESAID PURCHASE TRANSACTIONS ISSUED NOTICES U/S. 133(6) TO THE AFOREMENTIONED RESPECTIVE PARTIES, WHICH HOWEVER WERE RETURNED UNSERVED WITH THE REMARKS N O T KNOWN AND N O T CLAIMED. THE A.O IN THE BACKDROP OF THE AFORESAID FACTS, THUS CALLED UPON THE ASSESSEE TO SUBSTANTIATE THE GENUINENESS AND VERACITY OF THE AFORESAID PURCHASE TRANSACTION S . THE ASSESSEE IN ORDER TO FORTIFY THE GENUINENESS OF THE PURCHASE TRANSACTIONS PRODUCED BEFORE THE A.O THE COPY OF THE LEDGER ACCOUNTS OF THE RESPECTIVE PARTIES AND EXTRACT O F THE ACCOUNT SHOWING THE TRANSACTIONS WITH THEM, AS WELL AS TOOK SUPPORT OF THE FACT THAT THE PAYMENTS TOWARDS THE PURCHASE CONSIDERATION WAS MADE TO THE P A G E | 4 RESPECTIVE SUPPLIER PARTIES VIDE ACCOUNT PAYEE CHEQUES FROM ITS DULY DISCLOSED BANK ACCOUNT. THAT IT WAS THE CLAIM OF THE ASSESSEE THAT THE STAND ALONE FACT THAT THE AFORESAID DEALER S HA D BEEN BLACK LIS TED BY THE SALES TAX DEPARTMENT WOULD NOT MEAN THAT ALL THE TRANSACTIONS DONE BY THEM WERE TO BE TAKEN AS BOGUS . THOUGH THE AFORESAID NOTICES SERVED BY THE A.O U/S. 133(6) WERE NOT COMPLIED WITH BY THE RESPECTIVE PARTIES , BUT ONE OF THE PARTY, VIZ. M/S AAYUSHI ENTERPRISES , THROUGH ITS PROPRIETOR MS. MEENA R. PARIKH, FILED A REPLY DATED 23.01.2014 WITH THE A.O , WHEREIN SHE CATEGORICALLY DEN IED OF HAVING DONE ANY BUSINESS WITH THE ASSESSEE . THE A.O IN THE BACKDROP OF THE AFORESAID FACTS DIRECTED THE ASSESSEE TO PRODUCE THE AFOREMENTIONED SUPPLIER PARTIES FOR NECESSARY VERIFICATION, AS WELL AS PRODUCE THE COPIES OF BILLS/VOUCHERS INCLUDING QUANTITY OF ITEMS PURCHASED, COPIES OF DELIVERY CHALLANS AND THE COPIES OF THE BANK STATEMENT ALONG WITH THE CHEQUE NO (S) . OF THE RESPECTIVE PAYMENTS MADE TO THE SAID PARTIES. THAT DESPITE SPECIFIC DIRECTIONS, THE ASSESSEE H OWEVER FAILED TO PLACE ON RECORD THE DOCUMENTARY E VIDENCE AS WERE CALLED FOR BY THE A.O, VIZ. COPIES OF DELIVERY CHALLANS, LORRY RECEIPTS, THE MODE OF TRANSPORT OF GOODS, EVIDENCE OF PAYMENT OF OCTRO I (IF ANY) FOR MOVEMENT OF STOCK TO PROVE GENUINENITY OF PURCHASES, NOR SUBMITTED THE COPIES OF THE BILLS F OR THE REASON THAT THE SAME WERE NOT AVAILABLE. THE ASSESSEE NEITHER PRODUCE D THE PARTIES FOR NECESSARY VERIFICATION BEFORE THE A.O , AS WELL AS FAILED TO PRODUCE THE STOCK REGISTER, AND AS SUCH COULD NOT SUBSTANTIATE THE FACTUM AS REGARDS RECEIPT OF GOODS FROM THE AFORESAID PARTIES AND CONSUMPTION OF THE SAME AT HIS DIFFERENT SITES . THE A.O IN THE BACKDROP OF THE AFORESAID FACTS THUS CONCLUDED THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE PURCHASES CLAIMED TO HAVE BEEN MADE FROM THE AFORESAID PART IES, AND THUS BEING OF THE VIEW THAT THE ASSESSEE HAD NOT PURCHASED ANY GOODS/MATERIALS FROM THE SAID P A G E | 5 DEALERS MADE AN ADDITION OF RS.99,68,007/ - AS AN UNEXPLAINED EXPENDITURE U/S. 69C IN THE HANDS OF THE ASSESSEE. 4 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE A.O CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) ENDORSED THE OBSERVATIONS OF THE A.O THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE GENUINENESS OF THE PURCHASE TRANSACTION S , AS WELL AS HELD THAT MERE PAYMENT OF THE PURCHA SE CONSIDERATION BY CHEQUES WOULD IN NO WAY CONCLUSIVELY ESTABLISH THE GENUINENESS OF THE TRANSACTION S . THE CIT(A) HOWEVER CONSIDERING THE FACT THAT THE A.O HAD NEITHER DISPUTED THE BOOKS OF ACCOUNT OR THE SALES REFLECTED BY THE ASSESSEE, NOR ESTABLISHED THAT THE PAYMENTS MADE BY THE ASSESSEE TO THE SAID RESPECTIVE PARTIES HAD THEREAFTER FOUND ITS WAY BACK TO THE POCKET OF THE ASSESSEE, THUS IN ALL FAIRNESS GOING BY THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. S IMIT P. SHETH (TA X A PPEAL NO. 5531 OF 2012, DATED 16.01.2013), THEREIN HELD THAT NOW WHEN THE TOTAL SALE S HA D BEEN ACCEPTED BY THE A.O, THEN THE ENTIRE PURCHASE VALUE COULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE . T HE CIT(A) THUS ON THE BASIS OF HER AFORESAID OBSERVATIONS THEREIN HELD THAT A FAIR PROFIT RATIO WOULD BE NEEDED TO BE ADDED BACK TO THE INCOME OF THE ASSESSEE , AND THUS RESTRICTED THE ADDITION IN RESPECT OF THE SAID UNPROVED PURCHASES AT 8% OF THE AGGREGATE OF THE AFORESAID PURC HASE S OF RS. 99,68,007/ - (SUPRA) AND UPHELD THE ADDITION TO THE EXTENT OF RS. 7 ,97,441/ - . 5 . THE DEPARTMENT BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) THEREIN RESTRICTING THE ADDITION IN RESPECT OF THE BOGUS PURCHASES AT RS.7,97,441/ - , AS AGAINST THE ADDITION OF THE ENTIRE VALUE OF PURCHASE OF RS.99,68,007/ - MADE BY THE A.O, HAD THEREIN CARRIED THE MATTER IN APPEAL BEFORE US. THAT AT THE VERY OUTSET OF THE HEARING OF THE APPEAL THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT THE P A G E | 6 CIT(A) HAD ERRED IN RESTRICTING THE ADDITION IN RESPECT OF THE BOGUS PURCHASES TO AN AMOUNT OF RS. 7,97,441/ - . T HE LD. D.R. IN ORDER TO DRIVE HOME HIS CONTENTION THAT THE A.O HAD RIGHTLY MADE AN ADDITION OF THE ENTIRE AMOUNT OF BOGUS PURCHASE OF RS. 99,68,007/ - RELIED ON THE ORDER PASSED BY THE HONBLE SUPREME COURT DISMISSING THE S PECIAL LEAVE PETITION (SLP) OF THE ASSESSEE IN THE CASE OF N.K. PROT E INS LTD. VS. DCIT [ SPECIAL LEAVE TO APPEAL (C)... CC NO. (S)) 76 9 OF 2017, DATED 16.01.2017 ] . THE LD. D.R. S UBMITTED THAT IN THE AFORESAID CASE OF N.K. PROTEINS LTD.(SUPRA) THE HONBLE SUPREME COURT BY DISMISSING THE SLP OF THE ASSESSEE , HAD THUS CONFIRMED THE DECISION OF THE HONBLE HIGH COURT WHICH HAD HELD THAT THE ADDITION OF ENTIRE BOGUS PURCHASE WAS LIABLE TO BE MADE IN THE CASE OF THE ASSESSEE BEFORE THEM. THE LD. D.R. FURTHER IN SUPPORT OF HIS AFORESAID CONTENTION RELIED ON THE JUDGMENT OF THE HONBLE HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF CIT - II, CH ANDIGARH VS. NARENDRA KUMAR GUPTA (2015) 55 TAXMANN. COM 371 (PUNJAB AND HARYANA). PER CONTRA, THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE SUBMITTED THAT THE FACTS INVOLVED IN THE CASE OF N.K. PROTEINS LTD. (SUPRA) WERE DISTIN GUISHABLE , AS THE SAME WAS A CASE WHERE DURING THE COURSE OF SEARCH PROCEEDINGS CONDUCTED AT THE PREMISES OF THE ASSESSEE, THE DEPARTMENT HAD CAME ACROSS CERTAIN BLANK SIGNED CHEQUE BOOKS AND VOUCHERS OF NUMBER OF CONCERNS, WHICH IRREBUTTABLY ESTABLISHED T HE NEXUS OF THE SAM E WITH THE DEPOSITS IN THE BANK ACCOUNT OF THE SAID PARTIES . IT WAS SUBMITTED BY THE LD. A.R THAT IT WAS ONLY IN THE BACKDROP OF T H E AFORESAID MATERIAL AS HAD EMERGED DURING THE COURSE OF THE SEARCH PROCEEDINGS IN THE AFORESAID CASE, THAT IT WAS HELD THAT THE ASSESSEE HAD AS A MATTER OF FACT NOT CARRIED OUT ANY PURCHASES AT ALL FROM THE SAID CONCERNS, BUT HAD MERELY INFLATED THE SAM E. THE LD. A.R. THUS SUBMITTED THAT THE PECULIAR FACTS INVOLVED IN THE CASE OF N.K. PROTEINS LTD. ( S UPRA) WERE SUBSTANTIALLY P A G E | 7 DISTINGUISHABLE AS AGAINST THOSE INVOLVED IN THE CASE OF THE PRESENT ASSESSEE . THAT IT WAS AVERRED BY THE LD. A.R THAT UNLIKE THE F ACTS INVOLVED IN THE AFORESAID CASE, IN THE CASE OF THE ASSESSEE IT WAS A CONCEDED FACTUAL POSITION THAT THE PURCHASES MADE BY THE ASSESSEE CONCERN HAD BEEN CONSUMED IN THE CONTRACT WORKS EXECUTED BY THE ASSESSEE. THE LD. A.R. FURTHER REFERRING TO THE RELI ANCE PLACE BY THE LD. D.R. ON THE JUDGMENT OF THE HONBLE HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF NARENDRA KUMAR GUPTA ( S UPRA) , THEREIN SUBMITTED THAT THE FACTS INVOLVED IN THE SAID CASE WERE ALSO DISTINGUISHABLE, WHEREIN IN THE SAID CASE THERE WAS A VARIATION IN THE DESCRIPTION OF PURCHASE S ON THE VOUCHERS AND THE CORRESPONDING BILLS, AS WELL AS VARIATION IN RATES OF THE SAME ITEMS OF PURCHASE ETC. , WHICH FACTS INESCAPABLY PROVED THAT THE ASSESSEE IN THE SAID CASE HAD NEVER CARRIED OUT ANY PURCHASE S. THE LD. A.R IN ORDER TO FORTIFY HIS CONTENTION THAT THERE WAS NO INFIRMITY IN THE ORDER OF THE CIT(A) RESTRICTING THE ADDITIONS AT 8% OF THE AGGREGATE VALUE OF PURCHASE, THEREIN RELIED ON THE ORDER PASSED BY A COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF THE SISTER CONCERN OF THE ASSESSEE, VIZ. ACIT - 33(3), MUMBAI VS. M/S. SETH CONSTRUCTION COMPANY, MUMBAI (ITA NO. 4280/MUM/2015, DATED 24,03.2017). IT WAS SUBMITTED BY THE LD. A.R THAT ON THE BASIS OF SIMILAR FACTS INVOLVED IN THE AFORESAID CASE , THE TRIBUNAL BY DISMISSING THE APPEAL OF THE REVENUE HAD UPHELD THE ORDER OF THE CIT(A) AND RESTRICTED THE ADDITION TO 8% OF THE PURCHASES . THAT IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT CONSIDERING THE FACT THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE HAD NOT BEEN REJECTED, SALES H AVE NOT BEEN DISPUTED AND NEITHER THE CHEQUES HAVE BEEN SHOWN TO HAVE BEEN RECEIVED BACK IN CASH BY THE ASSESSEE, THEREFORE THE CIT(A) IN ALL FAIRNESS HAD RIGHTLY RESTRICTED THE ADDITION TO 8% OF THE PURCHASES . P A G E | 8 6 . WE HAVE HEARD THE AUTHORIZED R EPRESENTATIVE S FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PRODUCED BEFORE US. WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE FACT THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAD NOT BEEN REJECTED, SALES REF LECTED HAD NOT BEEN DISLODGED AND THE CHEQUES ISSUED TOWARDS THE PURCHASE CONSIDERATION HAVE NOT BEEN FOUND TO HAVE BEEN ROUTED BACK TO THE POCKET OF THE ASSESSEE , THEREFORE IT CAN BE FAIRLY CONCLUDED THAT THE ASSESSEE HAD CARRIED OUT THE PURCHASE S OF THE AFORESAID GOODS. WE HOWEVER ARE ALSO NOT OBLIVIOUS OF THE FACT THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE PURCHASE TRANSACTION S AS CLAIMED BY IT TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE AFORESAID FACTS IT CAN SAFELY BE CONCLUDED THAT IT IS NOT A CASE WHERE THE ASSESSEE IS FOUND NOT TO HAVE MADE ANY PURCHASES AT ALL, BUT RATHER IS A CASE WHERE THE PURC HASES HAD BEEN MADE BY THE ASSESSEE, THOUGH NOT FROM THE PARTIES FROM WHO M IT WAS CLAIMED TO HAVE BEEN MADE, BUT FROM THE PARTIES OPERATING IN THE OPEN/GREY MARKET , WITHOUT PRO PER BILLING . WE THUS ARE OF THE CONSIDERED VIEW THAT IN LIGHT OF OUR AFORESAID OBSERVATIONS , ONLY THE PROFIT INVOLVED IN SUCH PURCHASES MADE BY THE ASSESSEE FROM THE OPEN/GREY MARKET IS LIABLE TO BE ADDED TO THE INCOME OF THE ASSESSEE, AND NOT THE ENTIRE PURCHASE VALUE. WE HOWEVER FIND THAT ONE OF THE PARTIES, VIZ, M/S AAYUSHI NITE ENTERPRISES (SUPRA) FROM WHOM THE ASSES SEE HAD CLAIMED TO HAVE MADE PURCHASE OF RS.10, 30,868/ - HAD IN COMPLIANCE TO A NOTICE UNDER SECTION 133(6), THEREIN VIDE A L E TTER DATED 23.01.2014 CATEGORICALLY DECLINED OF HAVING CARRIED OUT ANY BUSINESS WITH THE ASSESSEE. WE ARE THUS OF THE CONSIDERED VI EW THAT IN THE BACKDROP OF THE AFORESAID FACTS , WITH THE EXCEPTION OF THE PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM M/S AAYUSHI NITE ENTERPRISES (SUPRA) , IN RESPECT OF THE PURCHASE S RELATABLE P A G E | 9 TO THE REMAINING 7 PARTIES ONLY AN ADDITION TO THE EXTENT OF A FAIR PROFIT RATIO WOULD BE CALLED FOR IN THE HANDS OF THE ASSESSEE . W E HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE OF THE CONSIDERED VIEW THAT AN ADDITION IN THE HANDS OF THE ASSESSEE BY APPLYI NG THE PROFIT RATE OF 8% IN RESPECT OF THE PURCHASES MADE BY THE ASSESSEE FROM THE AFORESAID 7 PARTIES HAD IN ALL FAIRNESS BEEN CARRIED OUT BY THE CIT(A), AND THUS TO THE SAID EXTENT WE UPHOLD THE ORDER OF THE CIT(A). W E HOWEVER ARE OF THE CONSIDERED VIEW THAT IN LIGHT OF THE CLEAR DENIAL ON THE PART OF M/S AAYUSHI NITE ENTERPRISES ( S UPRA ) OF HAVING CARRIED OUT ANY BUSINESS WITH THE ASSESSEE, WHICH WE FIND HAD NOT BEEN REBUTTED BY THE ASSESSEE TILL DATE, THE ONLY INFERENCE WHICH CAN THEREIN BE DRAWN IS THAT THE PURCHASE TO THE EXTENT RELATABLE TO THE SAID LATTER PARTY IS IN SUM AND SUBSTANCE BOGUS, AND HAD NEVER BEEN CARRIED OUT BY THE ASSESSEE. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS THOUGH CONCUR WITH THE VIEW ARRIVED AT BY THE CIT(A) THAT THE ADDITION RELATABLE TO PURCHASES MADE BY THE ASSESSEE FROM THE AFOREMENTIONED 7 PARTIES , PLACED AT SR. NO. 1 - 7 IS LIABLE TO BE RESTRICTED BY APPLYING A PROFIT RATE OF 8%, BUT HOWEVER IN LIGHT OF THE DIFFERENTLY PLACED FACTS AS OBSERVED BY US HEREINABOVE IN RESPECT OF THE ALLEGED PURCHASES FROM M/S AAYUSHI NITE ENTERPRISES (SUPRA) , WHEREIN IT STANDS ESTABLISHED TH AT NO BUSINESS HAD BEEN DONE BY THE ASSESSEE WITH THE SAID PARTY, WE HEREIN SET ASIDE THE ORDER OF THE CIT(A) AND BEING OF THE CONSIDERED VIEW THAT TO THE SAID EXTENT IT CAN SAFELY B E CONCLUDE D THAT THE ASSESSEE HAD INFLATED ITS PURCHASES , THEREIN DIRECT THAT THE ENTIRE AMOUNT OF RS.10,30,868/ - (SUPRA) BE ADDED TO THE INCOME OF THE ASSESSEE. 6. THE APPEAL OF THE DEPARTMENT IS PARTL Y ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. P A G E | 10 ORDER PRONOUNCED IN THE OPEN COURT ON 23 .06.2017 SD/ - SD/ - ( G.S. PANNU ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; : 23 .06.2017 PS. ROHIT KUMAR / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 11 SR.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER