MR.KAMLESH AMARLAL KEWALRAMANI, MUMBAI V. INCOME TAX OFFICER WARD 2(2), KALYAN

ITA 4116/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4116 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITNYA ANJARIA
• Assessee Lawyers: S M MAKHIJA; LIPSA A CHANCHLANI A R S
• Keywords: Bogus purchase; Set aside
• Section: 143(1)

Judgement Text

P A G E | 1 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NOS.4116 & 4117/MUM/2018 (ASSESSMENT YEARS: 2010 - 11 & 2011 - 12 ) MR. KAMLESH AMARLAL KEWALRAMANI, PROPRIETOR M/S SHARP CHEM (INDIA), BLOCK NO.A - 27, ROOM NO.157, GOAL MAIDAN, ULHASNAGAR 421 001 VS. THE INCOME TAX OFFICER WARD 2(2) KALYAN PAN AGXPK5182A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.M. MAKHIJA & SHRI LIPSA A. CHANCHLANI , A.R S RESPONDENT BY: SHRI CHAITNYA ANJARIA, D.R DATE OF HEARING: 30 .04.2019 DATE OF PRONOUNCEMENT: 08 .05.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEALS FILED BY THE ASSESSEE FOR A.Y (S) 2010 - 11 AND 2011 - 12 ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE CIT(A) - 3, THANE, DATED 04.12.2014, WHICH IN TURN ARISES FROM THE RESPECTIVE ASSESSMENT ORDERS PASSED UNDER SEC.143(3) R. W .S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT I - T. ACT), DATED 16.10.2014. AS THE ISSUES INVOLVED IN THE CAPTIONED APPEALS ARE INEXTRICABLY INTERLINKED AND INTERWOVEN, THEREFORE, THE SAME ARE BEING TAKEN UP AND DISPOSED OFF TOGETHER BY WAY OF A CONSOLIDATED ORDER. WE SHALL FIRST ADVERT TO THE APPEAL OF THE ASSESSEE F OR A.Y 2010 - 11. THE ASSESSEE ASSAILING THE P A G E | 2 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL : 1 . DISALLOWANCE IN RESPECT OF GENUINE BUSINESS PURCHASES OF RS 8,20,560/ - . 1.1 ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, TH E LD. CIT(A)ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE LD. A.O ON ACCOUNT OF G ENUINE BUSINESS PURCHASES OF RS. 8,20,560/ - WHICH WAS DISALLOWED BASED ON THE INFORMATION RECEIVED REGARDING HAWALA DEALERS FROM SALES TAX DEPARTMENT, MAHARASHTRA. 1.2 WITHOUT PREJUDICE TO THE ABOVE, HAVING HELD THE ALLEGED PURCHASES AS NON - GENUINE, THE LD. CIT(A) FURTHER ERRED IN NOT APPLYING A G.P/N.P RATIO ON THE SAID PURCHASES. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY OR DELETE ANY OF THE GROUNDS T AKEN IN APPEAL. 2. BRIEFLY STATED, THE ASSESSEE WH O IS ENGAGED IN THE BUSINESS OF TRADING AND REPACKING OF PHARMACEUTICAL AND CONSUMER PRODUCTS HAD E - FILED HIS RETURN OF INCOME FOR A.Y. 2010 - 11 ON 28.09.2010, DECLARING TOTAL INCOME OF RS.1,92,390/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH U/S 143(1) OF THE I - T ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED BY THE A.O FROM THE MAHARASHTRA SALES TAX DEPARTMENT, MUMBAI , THAT THE NAME OF THE ASSESSEE HAD FIGURED IN THE LIST O F THE BENEFICIARIES WHO HAD OBTAINED BOGUS PURCHASE BILLS FROM CERTAIN HAWALA PARTIES, HIS CASE WAS REOPENED UNDER SEC. 147 OF THE I - T ACT. 3. IN THE COUR SE OF THE ASSESSMENT PROCEEDINGS , IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD CLAIMED TO HAVE MADE PURCHASES AGGREGATING TO RS. 8,20,560 - / - FROM THE FOLLOWING TAINTED PARTIES: SR. NO. NAME OF THE ENTRY PROVIDER AMOUNT OF PURCHASE BILLS TAKEN BY THE ASSESSEE (IN RS.) 1. JMD ORGENIC 3,16,160/ - 2. BHAVNA ENTERPRISES 2,38,160/ - 3. CHEMI AGE ENTERPRISES 2,66,240/ - TOTAL 8,20,560/ - P A G E | 3 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) IN ORDER TO VERIFY THE GENUINENESS AND VERACITY OF THE AFORESAID PURCHASE TRANSACTIONS , THE A.O CALLED UPON THE ASSESSEE TO PLACE ON RECORD DOCUMENTARY EVIDENCE IN SUPPORT OF THE AUTHENTICITY OF THE PURCHASES CLAIMED TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. AS THE ASSESSEE FAILED TO SUBSTANTIATE THE AUTHENTICITY OF THE PURCHASE TRA NSACTIONS ON THE BASIS OF SUPPORTING DOCUMENTARY EVIDENCE, THEREFORE, THE A.O HELD A CONVICTION THAT THE ASSESSEE HAD NOT MADE ANY PURCHASES AND HAD ONLY OBTAINED ACCOMMODATION BILLS FROM THE AFORESAID PARTIES. APART THERE FROM , THE ASSESSEE DESPITE SPECIF IC DIRECTION BY THE A.O TO PRODUCE THE PARTIES FOR EXAMINATION BEFORE HIM, FAILED TO PRODUCE EITHER OF THE AFORESAID PARTIES. IN THE BACKDROP OF THE AFORESAID FACTS, THE A.O HOLDING A CONVICTION THAT THE ASSESSEE HAD ON THE BASIS OF BOGUS BILLS PROCURED FR OM THE AFOREMENTIONED PARTIES INFLATED HIS PURCHASES, DISALLOWED THE ENTIRE AMOUNT OF SUCH PURCHASE S AGGREGATING TO RS. 8,20,560/ - . 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE ASSESSEE IN ORDER TO BUTTRESS HIS CLAIM AS RE GARDS THE GENUINENESS OF THE PURCHASE S CLAIMED TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES , FURNISHED THE COPIES OF THE PURCHASE BILLS ALONG WITH EXTRACTS OF THE BANK STATEMENTS EVIDENCING THE PAYMENTS OF THE PURCHASE CONSIDERATION TO THE AFOREMENTIONED PARTIES. FURTHER, T HE ASSESSEE IN ORDER TO REBUT THE OBSERVATIONS OF THE A.O THAT NO DOCUMENTARY EVIDENC E TO PROVE THE ACTUAL MOVEMENT OF GOODS WAS PLACED ON RECORD, THEREIN FILED THE COPY OF THE DELIVERY CHALLANS PERTAINING TO ONE OF THE PARTY VIZ. M/S CHEM I AGE ENTERPRISES. IT WAS SUBMITTED BY THE ASSESSEE THAT AS HE WAS TRYING TO LOCATE THE COP IES OF THE TRANSPORT RECEIPTS PERTAINING TO THE PURCHASES UNDER CONSIDERATION , THEREFORE, SOME FURTHER TIME FOR DOING THE NEEDFUL MAY BE GIVEN . HOWEVER, THE CIT(A) WAS NOT PERSUADED TO SUBSCRIBE TO THE CLAIM OF THE ASSESSEE THAT HE HAD MADE GENUINE PURCHASES FROM TH E P A G E | 4 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) AFOREMENTIONED PARTIES. AS THE ASSESSEE HAD FAILED TO FURNISH THE NECESSARY DOCUMENTARY EVIDENCE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THEREFORE, THE CIT(A) REMANDED THE MATTER OF THE A.O . H OWEVER , THE ASSESSEE IN THE COURSE OF THE REMAND PROCEEDI NGS ALSO COULD NOT JUSTIFY THE GENUINENESS OF THE PURCHASE TRANSACTIONS . APART THERE FROM, AS THE ASSESSEE HAD NOT MAINTAINED ANY STOCK REGIST E R, THEREFORE, THE CIT(A) WAS OF THE VIEW THAT THE QUANTITATIVE DETAILS WITH REGARD TO THE OPENING STOCK, PURCHASE S , SALES AND CLOSING STOCK COULD NOT BE SUBSTANTIATED BY THE ASSESSEE . IN SUM AND SUBSTANCE, IT WAS CONCLUDED BY HIM THAT THE PURCHASES AND THE SALES COULD NOT BE CORRELATED BY THE ASSESSEE WITH THE QUANTITATIVE DETAILS. THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE IN ORDER TO SUPPORT THE AUTHENTICITY OF THE PURCHASES, HAD EVEN FAILED TO DO THE LEAST POSSIBLE THAT WAS REQUIRED ON HIS PART I.E PRODUCE THE COPY OF THE INCOME TAX RETURNS, PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND BANK STATEMENTS OF THE AFORESAID PARTIES . ACCORDINGLY, THE CIT(A) C ONSIDERING THE TOTALITY OF THE FACTS OF THE CASE REJECTED THE BOOK RESULTS OF THE ASSESSEE UNDER SEC.145(3) OF THE I.T ACT. IN THE BACKDROP OF THE AFORESAID FACTS , THE CIT(A) NOT FINDING ANY INFIRMITY IN THE ADDI TION MADE BY THE A.O TOWARDS BOGUS/INFLATED PURCHASES, UPHELD THE DISALLOWANCE AND DISMISS ED THE APPEAL. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS SUBMITTED BY THE LD. A.R THAT THE LOWE R AUTHORITIES HAD GROSSLY ERRED IN DISALLOWING THE TOTAL VALUE OF PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. IT WAS THE CLAIM OF THE LD. A.R THAT THE A . O HAD MERELY ACTED ON THE BASIS OF THE INFORMATION RECEIVED FR OM THE S ALES TAX AUTHORITIES, MAHARASHTRA , AND WITHOUT MAKING ANY INDEPENDENT INVESTIGATIONS HAD DISALLOWED THE PURCHASES MADE BY THE ASSESSEE FROM THE AFOREMENTIONED PARTIES. IN ORDER TO IMPRESS UPON US P A G E | 5 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) THAT GENUINE PURCHASE OF MATERIAL WAS MADE BY THE AS SESSEE FROM T H E AFOREMENTIONED PARTIES , IT WAS SUBMITTED BY THE LD. A.R THAT THE PAYMENTS TOWARDS THE PURCHASE CONSIDERATION TO THE AFOREMENTIONED SUPPLIER PARTIES WAS MADE THROUGH BANKING CHANNEL AND THE MATERIAL PURCHASE D FROM THEM WAS SOLD. FURTHER, IT WAS SUBMITTED BY HIM THAT THE ASSESSEE HAD IN THE COURSE OF THE PROCEEDINGS BEFORE THE CIT(A) PLACE D ON RECORD THE COPIES OF THE PURCHASE BILLS , ALONG WITH THE EXTRACTS OF THE BANK STATEMENTS EVIDENCING THE PAYMENTS MADE TO THE AFORE SAID SUPPLIER PARTIES . THE LD. A.R SUBMITTED THAT AS THE G.P RATE OF 8.91% OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y. 2010 - 11 WAS IN CONFORMITY WITH THAT OF THE IMMEDIATELY 4 SUCCEEDING YEARS, THEREFORE, IT COULD SAFELY BE CONCLUDED THAT THE SALES CORRESPONDING TO THE PURCHASES UNDER CONSIDERATION WERE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. IT WAS FURTHER SUBMITTED BY HIM THAT ADDITION, IF ANY, IN RESPECT OF THE AFORESAID PURCHASE TRANSACTIONS WAS LIABLE TO BE RESTRICTED TO THE EXTENT OF THE PROFIT ELEME NT EMBEDDED IN THE SAME . 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE ASSESSEE COULD NOT PLACE ON RECORD ANY MATERIAL WHICH COULD PROVE THAT THE GOODS UNDER CONSIDERATIO N WERE ACTUALLY PURCHASE D BY HIM , THEREFORE , THE LOWER AUTHORITIES HAD RIGHTLY DISALLOWED THE ENTIRE AMOUNT OF PURCHASES OF RS.8,20,560/ - . 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAD IN THE COURSE OF THE ASSESSMENT PROCEEDINGS FAILED TO DISCHARGE THE ONUS AS WAS C A ST UPON HIM AS REGARDS PROV ING THE GENUINENESS OF THE PURCHASE TRANSACTIONS UNDER CONSIDERATION. IN FACT, WE A RE OF THE CONSIDERED VIEW THAT AS THE P A G E | 6 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) ASSESSEE HAD CLAIMED TO HAVE MADE PURCHASES FROM THE AFOREMENTIONED TAINTED PARTIES, THEREFORE, A VERY HEAVY ONUS WAS C A ST UPON HIM TO SUBSTANTIATE THE AUTHENTICITY OF THE SAID TRANSACTIONS , WHICH WE FIND HE HAD F A ILED TO DISCHARGE. APART THERE FROM, WE FIND THAT I T IS A MATTER OF FACT THAT THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS ALSO COULD NOT SUBSTANTIATE THE AUTHENTICITY OF THE PURCHASES CLAIMED TO HAVE BEEN MADE BY HIM FROM THE AFOREMENTIONED PARTIE S ON THE BASIS OF ANY CLINCHING DOCUMENTARY EVIDENCE . AT THE SAME TIME, WE ALSO CANNOT REMAIN OBLIVIOUS OF THE FACT THAT THE ASSESSEE HAD IN THE COURSE OF THE PROCEEDINGS BEFORE THE CIT(A) PLACE D ON RECORD COPIES OF THE PURCHASE BILLS, BANK STATEMENTS EVID ENCING PAYMENTS TO THE AFOREMENTIONED PARTIES THROUGH BANKING CHANNEL AND COPIES OF SOME DELIVERY CHALLANS PERTAINING TO ONE OF THE PARTY VIZ. M/S CHEM I AGE ENTERPRISES. IN OUR CONSIDERED VIEW , THE CIT(A) TAKING COGNIZANCE OF THE AFORESAID DOCUMENTS HAD THOUGH IN ALL FAIRNESS REMANDED THE MATTER BACK TO THE A.O, HOWEVER, THE ASSESSEE STILL FAILED TO SUBSTANTIATE THE GENUINENESS OF THE PURCHASES ON THE BASIS OF CLINCHING DOCUMENTARY EVIDENCE. INSOFAR, THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT THE ASSE SSEE HAD FAILED TO PROVE THE AUTHENTICITY OF THE PURCHASE TRANSACTIONS IS CONCERNED, WE CONCUR WITH THE SAME. AT THE SAME TIME, WE ARE OF THE CONSIDERED VIEW THAT TO THE EXTENT CERTAIN DOCUMENTS VIZ. PURCHASE BILLS, BANK STATEMENTS , DELIVERY CHALLANS ( IN P ART) WERE PRODUCED BY THE ASSESSEE , THE SAME SUBSTANTIATE S THE FACT THAT THE MATERIAL /GOODS UNDER CONSIDERATION WAS PURCHASED BY THE ASSESSEE . IN FACT, IN CASE THE ASSESSEE WOULD HAD DEBITED BOGUS PURCHASES ONLY WITH AN INTENT TO SUPPRESS ITS TRUE INCOME, THEN THE SAME WOULD HAD WITNESS ED A SHARP DECLINE IN THE G.P RATE DURING THE YEAR, WHICH WE FIND IS NOT THE CASE. AS A MATTER OF FACT , THE G.P RATE OF 8.91% OF THE ASSESSEE FOR THE YEAR UNDER P A G E | 7 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) CONSIDERATION IS FOUND TO BE VERY MUCH IN CONFORMITY WITH THAT O F THE IMMEDIATELY SUCCEEDING FOUR YEARS, AS UNDER: A.Y. GP NP 2010 - 11 8.91 4.57 2011 - 12 9.79 5.51 2012 - 13 9.96 5.52 2013 - 14 8.50 8.09 2014 - 15 7.24 8.12 ON A PERUSAL OF THE AFORESAID DETAILS , WE FIND THAT THE G.P RATE OF 8.91% OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION IS PROGRESSIVE AS AGAINST THE AVERAGE G.P. RATE OF 8.87% FOR THE AFORESTATED SUCCEEDING FOUR YEARS I.E A.Y. 2011 - 12 TO A.Y. 2014 - 15 . IN OUR CONSIDERED VIEW, THE ASSESSEE AFTER PROCUR IN G THE GOODS AT A DISCOUNTED VALUE FROM THE OPEN/GREY MARKET, HAD ONLY OBTAINED THE ACCOMMODATION BILLS FROM THE AFOREMENTIONED PARTIES. AS OBSERVED BY US HEREINABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE HAD IN ORDER TO ROUTE OUT THE TRANSACTIONS THROUGH H IS REGULAR BOOKS OF ACCOUNTS , HAD PROCURED BOGUS BILLS FROM THE AFOREMENTIONED HAWALA PARTIES. IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION IN THE HANDS OF THE ASSESSEE IS LIABLE TO BE LIMITED ONLY TO THE E XTENT OF THE PROFIT ELEMENT EMBEDDED IN MAKING OF SUCH PURCHASES BY HIM FROM THE OPEN/GREY MARKET. 8. WE SHALL NOW DELIBERATE ON THE ASPECT OF QUANTIFICATION OF THE PROFIT ELEMENT INVOLVED IN MAKING OF SUCH PURCHASES BY THE ASSESSEE FROM THE OPEN/GREY MAR KET . ADMITTEDLY, BY PROCURING THE GOODS FROM THE OPEN/GREY MARKET, THE ASSESSEE WOULD HAVE SAVED ON VAT, AS WELL AS AVAILED CERTAIN OTHER BENEFITS VIZ. CASH DISCOUNT ETC. WE FIND THAT THE HONBLE HIGH COURT OF BOMBAY RECENTLY IN THE CASE OF PR. COMMISSIONE R OF INCOME TAX - 17 VS. MOHOMMAD HAJI ADAM AND COMPANY (ITA NO.1004 OF 2016, DATED 11.02.2019) , WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE WHO WAS A TRADER OF FABRICS, P A G E | 8 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) HAD OBSERVED , THAT THE TRIBUNAL HAD CORRECTLY RESTRICTED THE ADDITION AS REGARDS THE PURCHASES WHICH WERE FOUND TO BE BOGUS , TO THE EXTENT OF BRINGING THE G.P RATE OF SUCH PURCHASES AT THE SAME RATE OF OTHER GENUINE PURCHASES. WE THUS RESPECTFULLY FOLLOWING THE AFORESA ID JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT , ARE OF THE CONSIDERED VIEW THAT THE ADDITION AS REGARDS THE BOGUS PURCHASES OF RS.8,20,560/ - IN THE CASE OF THE ASSESSEE BEFORE US IS LIABLE TO BE RESTRICTED BY BRINGING THE G.P RATE OF SUCH BOGUS PURCH ASES IN CONFORMITY WITH THE G.P RATE OF THE OTHER GENUINE PURCHASES. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS RESTORE THE MATTER TO THE FILE OF THE A.O , WHO IS DIRECTED TO RESTRICT THE ADDITION IN THE CASE OF THE ASSESSEE IN TERMS OF OUR AFORESAID OB SERVATIONS. NEEDLESS TO SAY, THE ASSESSEE SHALL IN THE COURSE OF THE SET ASIDE PROCEEDINGS FURNISH THE REQUISITE DETAILS WITH THE A.O , IN ORDER TO FACILITATE HIM TO GIVE EFFECT TO OUR AFORESAID OBSERVATIONS . 9. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. ITA NO. 4117/MUM/2018 A.Y. 2011 - 12 10. WE SHALL NOW ADVERT TO THE APPEAL OF THE ASSESSEE FOR A.Y. 2011 - 12. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUND S OF APPEAL : 1. DISALLOWANCE IN RESPECT OF GENUINE BUSINESS PURCHASES OF RS 12,62,873/ - 1.1 ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE LD. A.O ON ACCOUNT OF GENUINE BUSINESS PURCHASES OF RS. 12,62,873/ - WHICH WAS DISALLOWED BASED ON THE INFORMATION RECEIVED REGARDING HAWALA D EALERS FROM SA LES TAX DEPARTMENT, MAHARASHTRA . 1.2 W ITHOUT PREJUDICE TO THE ABOVE, HAVING HELD THE ALLEGED PURCHASES AS NON - GENUINE, THE LD. CI T(A) FURTHER ERRED IN NOT APPLYING A G.P/N.P RATIO ON THE SAID PURCHASES. P A G E | 9 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY OR DELETE ANY OF THE GROUNDS TA KEN IN APPEAL. 11. BRIEFLY STATED, THE ASSESSEE HAD E - FILED HIS RETURN OF INCOME FOR A.Y. 2011 - 12 ON 21.09.2011, DECLARING TOTAL INCOME OF RS.4,64,600/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE I - T ACT. S UBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE MAHARASHTRA SALES TAX DEPARTMENT, MUMBAI , THAT THE NAME OF THE ASSESSEE HAD FIGURED IN THE LIST OF THE BENEFICIARIES WHO HAD OBTAINED BOGUS PURCHASE BILLS FROM CERTAIN HAWALA PARTIES, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SEC. 147 OF THE I - T ACT. 12. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS , IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD CLA I MED TO HAVE MADE PURCHASES AGGREGATING TO RS.12,62,873/ - FROM THE FOLL OWING TAINTED PARTIES: SR. NO. NAME OF THE ENTRY PROVIDER AMOUNT OF PURCHASE BILLS TAKEN BY THE ASSESSEE (IN RS.) 1. JMD ORGENIC 6,18,187/ - 2. BHAVNA ENTERPRISES 6,44,686/ - TOTAL 12,62,873/ - AS THE ASSESSEE FAILED TO SUBSTANTIATE THE AUTHENTICITY OF THE AFORESAID PURCHASE TRANSACTIONS, THEREFORE, THE A.O DISALLOWED THE ENTIRE AMOUNT OF PURCHASES. AGGRIEVED, THE ASSESSEE UNSUCCESSFULLY CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) , WHO UPHELD THE ADDITION /DISALLOWANCE MADE BY THE A.O . 13. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT AS THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL REMAIN S THE SAME AS WERE THERE BEFO RE US IN HIS APPEAL FOR THE IMMEDIATELY PRECEDING YEAR I.E A.Y. 2010 - 11 IN ITA NO.4116/MUM/2018, THEREFORE, OUR ORDER PASSED WHILE P A G E | 10 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2) DISPOSING OFF THE SAID APPEAL FOR A.Y. 2010 - 11 SHALL APPLY MUTATIS MUTANDIS FOR THE DISPOSAL OF THE PRESENT APPEAL FOR A.Y. 2 011 - 12. 14. THE APPEAL OF THE ASSESSEE FOR A.Y. 2011 - 12 IS ON THE SAME TERMS ALLOWED FOR STATISTICAL PURPOSES. 15. THAT BOTH THE APPEALS OF THE ASSESSEE I.E A.Y. 2010 - 11 VIZ . ITA NO.4116/MUM/2018 AND FOR A.Y. 2011 - 12 VIZ . ITA NO.4117 /MUM/2018 ARE ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 08 . 05.2019 SD/ - SD/ - ( SHAMIM YAHYA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 08 .05.2019 PS. ROHIT / 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 ITA NOS. 4116 & 4117/MUM/2018 AYS. 2010 - 11 & 2011 - 12 MR. KAMLESH AMARLAL KEWALRAMANI VS. ITO, WARD 2(2)