SHREENOX SYNTHETICS, BHIWANDI V. ASST CIT CIR 1, KALYAN

ITA 5788/MUM/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3680 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 27-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KIRAN DOIFODE
• Keywords: Bogus purchase; Condonation of delay
• Section: 143(3); 143(2); 139(1); 147; 148

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL H BENCH MUMB AI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 5788/MUM/2016 (ASSESSMENT YEAR 2009-10 ) M/S SHREENOX SYNTHETICS SR.NO. 9, 548, AASBIBI, KALYAN ROAD, BHIWANDI- 421302. PAN: ABFFS4088N VS. ACIT - 19(1)(3) CIRCLE-1, 1 ST FLOOR, MOHAN PLAZA, WAYALE NAGAR, KHADAKPADA, KALYAN (W) - 421301 APPELLANT RESPONDE NT APPELLANT BY : MS. KIRAN DOIFODE (AR) RESPONDENT BY : SHRI MANOJ KUMAR SINGH (DR) DATE OF HEARING : 27.08.2019 DATE OF PRONOUNCEMEN T : 04.11.2019 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER ; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(A)-2, THANE DATED 30.06.2016 FOR ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: A. THE LD COMMISSIONER (APPEALS) HAS ERRED IN REJEC TING THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE I T ACT 1961 IN THE ABSENCE OF ANY DEFECT BEING POINTED OUT, WHEN THE REQUIRED DETAILE D INFORMATION WAS SUBMITTED BY THE APPELLANT AND FORM 3CD AUDIT TAX R EPORT WAS ALSO FILED. B. THE LD. COMMISSIONER (APPEALS) HAS ERRED IN HOLD ING THAT THE ONUS WAS NOT DISCHARGED BY THE APPELLANT AND HAS FAILED TO A PPRECIATE AND NO JUSTIFICATION IS GIVEN TO REJECT THE EXPLANATION/CL ARIFICATION GIVEN BY THE APPELLANT WHEN ALL THE NECESSARY SUPPORTING DOCUMEN TS WERE SUBMITTED BY THE APPELLANT. ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 2 C. THE LD COMMISSIONER (APPEALS) HAS FAILED TO CONS IDER AND APPRECIATE THE PURCHASE OF RS.737291/- AS GENUINE PURCHASE FROM M/ S. SWASTIK ENTERPRISES, IN THE LIGHT OF THE FACT THAT VIDE LET TERS DTD.27.6.2016, 31.5.2016 AND 24.5.2016, THE APPELLANTS HAD FILED CONFIRMATIO N OF ACCOUNTS DULY SIGNED BY PROP. OF M/S. SWASTIK ENTERPRISES, PRODUC ED ADEQUATE EVIDENCES I.E. SALE BILLS, DELIVERY CHALLANS AND OCTROI RECEI PTS FROM M/S. SWASTIK ENTERPRISES AND SUBMITTED CERTIFICATE DATED 12.12.2 013 GIVEN BY M/S. SWASTIK ENTERPRISES STATING THAT THEY HAD DELIVERED THE TEXTILE AUXILIARY AND SUBMITTED LEDGER CONFIRMATION ACCOUNTS. D. THE LD COMMISSIONER (APPEALS) HAS FAILED TO CONS IDER AND APPRECIATE THAT THERE WERE TWO DIFFERENT SUPPLIERS UNDER THE S AME NAME MS. SWASTIK ENTERPRISES, BUT HAVING DIFFERENT ADDRESSES, DIFFER ENT VAT TIN NUMBER AND THE A.O. IN HIS ORDER DATED 16.1.2014 IN PARA 6 ONL Y REFERS TO ONE AFFIDAVIT OF SHRI ABDUL SARI JAMEER AHMED KHAN, PROP. OF M/S. SWASTIK ENTERPRISES HAVING TIN NO.27610669252-V, THIS SUPPLIER IS DIFFE RENT AND THEREFORE THE PURCHASE OF RS.737291 FROM M/S. SWASTIK ENTERPRISES , PROP. SHRI JATIN G. GHELANI OUGHT TO HAVE BEEN CONSIDERED AS GENUINE. E. THE LD. COMMISSIONER (APPEALS) IN PARA 9.13 HAS ERRED IN HOLDING THAT THE APPELLANTS HAD SUPPRESSED ITS PROFIT BY 0.47% A ND HAS WRONGLY WORKED OUT QUANTUM OF SUPPRESSED PROFIT AS RS. 615013/-, A ND THEREFORE, THE RATIO APPLIED OF GROSS PROFIT IS ERRONEOUS. F. THE LD COMMISSIONER (APPEALS) HAS FAILED TO APPR ECIATE AND CONSIDER THAT IN THE AY 2007-08 (NON HAWALA YEAR) THE GROSS PROFIT WAS 2.97% WHICH WAS LOWER THAN 4.73% IN AY 2009-2010, AND THEREFORE THE LD CIT OUGHT TO HAVE WORKED OUT ON THE BASIS OF AVERAGE GROSS PROFI T OF AY 2007-08 (2.97%) AND AY 2008-09 (5.20%) NON HAWALA YEARS, WH ICH WOULD BE 4.90% AND THEREFORE THE SUPPRESSED PROFIT WOULD COME TO 0 .17% (4.90% (-) 4.73% WHICH WORKS OUT TO RS 2,22,452/- (13,08,53,927 X 0. 17/100). G. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBU NAL TO ADD, DELETE, AMEND OR MODIFY ANY OF THE ABOVE GROUNDS IF NECESSA RY BEFORE THE APPEAL IS FINALLY DECIDED. ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 3 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF YARN PROCESSING & DYEING, FILED HIS RETURN OF INCOM E ON 31.08.2009 DECLARING TOTAL INCOME OF RS. 8,99,460/- FOR ASSESS MENT YEAR 2009-10. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 14 3(1). THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 31.03.2011 ASSESSING TOTAL INCOME AT RS. 939460/-. THEREAFTER, THE CASE WAS RE-OPENED UNDER SECTION 14 7 ON THE BASIS OF INFORMATION RECEIVED FROM SALE TAX DEPARTMENT, GOVE RNMENT OF MAHARASHTRA THAT CERTAIN HAWALA OPERATORS ARE INDUL GING IN PROVIDING ACCOMMODATION BILLS WITHOUT ACTUAL DELIVERY OF GOOD S. THE SALE TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA REFERRED THE LIST OF SUCH HAWALA DEALERS AND THE BENEFICIARY TO THE DGIT (INV ESTIGATION), MUMBAI. THE NAME OF ASSESSEE APPEARED IN THE LIST O F BENEFICIARY. THE ASSESSEE ALLEGEDLY MADE THE PURCHASES OF RS. 9,68,6 91/- FROM SUCH HAWALA DEALERS. ON THE BASIS OF INFORMATION, THE AS SESSING OFFICER MADE A BELIEF THAT THE INCOME OF THE ASSESSEE ESCAPED AS SESSMENT, THEREFORE, RE-OPENED THE ASSESSMENT UNDER SECTION 147. NOTICE UNDER SECTION 148 WAS ISSUED ON 25.03.2013 TO THE ASSESSEE. THE ASSES SEE IN RESPONSE TO THE NOTICE UNDER SECTION 148 FILED ITS REPLY DATED 03.10.2013 AND STATED THAT ORIGINAL RETURN FILED ON 31.08.2009 UNDER SECT ION 139(1) BY ASSESSEE BE TREATED AS RETURN IN RESPONSE TO THE SAID NOTICE . THE ASSESSING OFFICER AFTER SERVING NOTICE UNDER SECTION 143(2) DATED 25. 03.2013 PROCEEDED ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 4 FOR RE-ASSESSMENT. DURING THE ASSESSMENT, THE ASSES SING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN PURCHASES FROM THE FOLL OWING PARTIES, WHICH WAS DECLARED AS HAWALA DEALERS BY THE SALE TAX DEPA RTMENT, GOVERNMENT OF MAHARASHTRA. NAME OF THE PARTIES BILL AMOUNT (RS.) M/S SHREEJI COMMERCIAL CORPORATION 1,43,000/- M/S SWASTIK ENTERPRISES 7,81,4 91/ - M/S PAWAN ENTERPRISES 44,200/ - TOTAL 9,68,691/- 3. THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE PURCHASE S AND TO FURNISH THE NAME OF DEALERS, BILLS &, VOUCHERS, DESCRIPTION OF GOODS PURCHASED, QUANTITY, RATE AND AMOUNT, THE DATE OF DISPATCH OF GOODS AND THE NAME OF PLACE ALONG WITH MODE OF TRANSPORTATION BY ROAD OR OTHER MODE, VEHICLE NUMBER, AND PAYMENT DETAILS. THE ASSESSEE WAS ALSO ASKED TO FURNISH THE CORRESPONDING SALES OF GOODS. THE ASSESSING OF FICER NOTED THAT THE PURCHASES REFLECTED IN THE BOOKS OF ACCOUNT OF THE ALLEGED HAWALA PARTIES, WERE NOT PROPERLY SUPPORTED WITH THE RELEV ANT DOCUMENT LIKE TRANSPORTATION BILLS, DELIVERY CHALLAN, GOODS RECEI VING NOTE AND OCTROI RECEIPT. THE ASSESSING OFFICER ON THE BASIS OF MATE RIAL AVAILABLE BEFORE HIM AND ON THE BASIS OF INFORMATION RECEIVED FROM S ALE TAX DEPARTMENT DISALLOWED THE ENTIRE PURCHASE SHOWN FROM ALL THREE PARTIES WHILE PASSING THE ASSESSMENT ORDER ON 16.01.2014 PASSED U NDER SECTION 143(3) R.W.S. 147. ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 5 4. AGGRIEVED BY THE ADDITIONS OF 100% DISALLOWANCE OF THE ALLEGED BOGUS PURCHASES, IN THE ASSESSMENT ORDER, THE ASSESSEE FI LED APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE MAD E ELABORATE SUBMISSION AND ALSO FURNISHED VARIOUS EVIDENCES T O SUBSTANTIATE THE GENUINENESS OF THE PURCHASES AND SUBMITTED THAT TH E DISPUTED PURCHASES FROM THREE PARTIES ARE ONLY 0.27% AGAINST TOTAL PUR CHASES OF RS. 11,12,68,521/-. THE ASSESSEE ALSO FURNISH THE GROSS PROFIT (GP) AND NET PROFIT (NP) RATIO SHOWN BY ASSESSEE FOR ASSESSMENT YEAR 2007-08 TO 2011-12, WHICH IS RECORDED BY LD. CIT(A) IN PARA-9. 10 OF THE IMPUGNED ORDER. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISS ION OF THE ASSESSEE HELD THAT THE ASSESSEE HAD SUPPRESSED PROFIT BY BOO KING HAWALA PURCHASES AND RESTRICTED THE DISALLOWANCES TO THE E XTENT OF 25% OF THE DISPUTED PURCHASES, WHICH WAS WORKED OUT TO BE RS. 2,42,173/-. THE LD. CIT(A) BY TAKING VIEW THAT THE DISALLOWANCE OF HA WALA PURCHASES IS LESS THAN THE SUPPRESSED GP, THEREFORE, THE DISALLO WANCE WAS RESTRICTED TO THE EXTENT OF SUPPRESSED GP I.E. RS. 6,15,013/-, OUT OF TOTAL HAWALA PURCHASES OF RS. 9,68,691/-. THEREBY GRANTED RELIE F OF RS. 3,53,948/-. FURTHER, AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD THE SUBMISSION OF AUTHORIZED REPRESEN TATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) F OR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. A R OF THE ASSESSEE ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 6 SUBMITS THAT THE LD. CIT(A) WHILE RESTRICTING THE A DDITION AS MECHANICALLY MADE THE DISALLOWANCE OF RS. 6,15,013/ -, WHICH IS EXCESSIVE. THE LD. AR OF THE ASSESSEE FURTHER SUBMI TS THAT THE ASSESSEE MADE PURCHASES OF DYES AND CHEMICAL. THE ASSESSEE F URNISHED COMPLETE DETAILS IN THE FORM OF LEDGER ACCOUNTS, PURCHASE IN VOICES, DELIVERY CHALLANS SHOWING GOODS RECEIVED BY THE ASSESSEE. TH E PAYMENTS WERE MADE THROUGH CHEQUES/BANKING CHANNEL. THE PURCHASES WERE DULY ENTERED IN THE BOOKS OF ACCOUNT AND PURCHASE REGIST ER. ENTIRE PURCHASES FROM THREE ALLEGED BOGUS PARTIES OF 5730 KG. IS REF LECTED IN THE TAX AUDIT REPORT. THE ASSESSEE ALSO FILED A CERTIFICATE FROM SWASTIK ENTERPRISES DATED 12.12.2013 CERTIFYING THAT THE GO ODS/MATERIALS WERE DELIVERED TO THE ASSESSEE. THE ASSESSEE ALSO FURNIS HED THE VAT AMOUNT PAID BY ASSESSEE. THE ASSESSING OFFICER AND THE LD. CIT(A) RELIED UPON THE STATEMENT/AFFIDAVIT OF THREE PARTIES WITHOUT GI VING ANY OPPORTUNITY TO THE ASSESSEE. THE LD. AR OF THE ASSESSEE SUBMITS TH AT THOUGH THE ENTIRE ADDITION IS LIABLE TO BE DELETED, HOWEVER, TO AVOID THE PROTRACTED LITIGATION, THE DISALLOWANCE MAY BE RESTRICTED TO T HE REASONABLE PERCENTAGE KEEPING IN VIEW THE BUSINESS ACTIVITIES OF THE ASSESSEE AND THE HISTORY OF GROSS PROFIT (GP) DECLARED BY THE AS SESSEE IN PAST YEARS. IN THE AY 2007-08 THE ASSESSEE DECLARED GP @ 2.97%, IN AY 2008-09 @ 5.20% AND DURING THE UNDER CONSIDERATION (AY 2009 -10) @ 4.73%. FOR SUBSEQUENT YEARS THE ASSESSEE DECLARED GP @ 3.7 3% FOR AY 2010-11 ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 7 AND AT 3.44% FOR AY 2011-12. THE DISALLOWANCES SUS TAINED BY LD CIT(A) IS ON HIGHER SIDE. 6. THE LD. AR FURTHER SUBMITS THAT THERE IS DELAY OF 1 3 DAYS IN FILING THE PRESENT APPEAL. IN SUPPORT OF APPLICATION FOR CONDO NATION OF DELAY, THE ASSESSEE HAS FILED THE AFFIDAVIT OF SHRI SUMAN LAL JAIN, ONE OF THE PARTNERS OF THE ASSESSEE FIRM. THE LD. AR OF THE AS SESSEE SUBMITS THAT THE IMPUGNED ORDER OF LD CIT(A) DATED 30.06.2016 WAS RE CEIVED BY ASSESSEE ON 16.07.2016, THE PARTNER OF THE ASSESSEE FIRM WHO IS TAKING CARE OF DAY TO DAY AFFAIR WAS OBSERVING JAIN PARUSH AN FROM 29 TH AUGUST 2016 TO 5 TH SEPTEMBER 2016 AND THEREAFTER ATTENDED PILGRIMAGE AT PALI THANA JAIN TEMPLE AND RETURN TO MUMBAI ON 13.09.201 6 AND THE APPEAL WAS FILED IMMEDIATELY AFTER PROPER CONSULTATION WIT H ADVOCATE ON 27.09.2016. THE DELAY IS NEITHER INTENTIONAL NOR DE LIBERATE AND THE BENCH MAY TAKE A LENIENT VIEW IN CONDONING THE DELA Y AS THE ASSESSEE HAS GOOD CASE ON MERIT. 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ON TH E ISSUE OF CONDONATION OF DELAY SUBMITS THAT THE BENCH MAY TAK E APPROPRIATE DECISION AS PER THEIR DISCRETION. 8. ON MERIT, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE SUPPORTED THE ORDER OF LOWER AUTHORITIES. THE LD. D R FURTHER SUBMITS THAT INVESTIGATION WING OF INCOME-TAX DEPARTMENT HAS MAD E FULL-FLEDGED INVESTIGATION IN RESPECT OF HAWALA TRADERS. THE HAW ALA TRADERS WERE/ARE ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 8 ENGAGED IN PROVIDING BOGUS BILL WITHOUT ACTUAL DELI VERY OF GOODS. THE ASSESSEE HAS SHOWN BOGUS PURCHASES ONLY TO INFLATE THE PROFIT. THE LD. DR FOR THE REVENUE SUBMITS THAT THE ASSESSING OFFIC ER HAS GIVEN SUFFICIENT RELIEF. THE LD. CIT(A) HAS REASONABLY ES TIMATED THE DISALLOWANCES. THE ASSESSEE IS NOT ENTITLED FOR ANY FURTHER RELIEF. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES AND PERUSED THE ORDER OF LOWER AUTHORITIES AND THE OTHER MATERIAL A VAILABLE ON RECORD. FIRST WE ARE CONSIDERING THE PLEA OF LD. AR OF THE ASSESSEE FOR CONDONING THE DELAY IN FILING APPEAL. WE HAVE NOTED THAT THE LD. AR OF THE ASSESSEE HAS FAIRLY STATED IN THE APPLICATION/AFFIDAVIT FOR CONDONATION OF DELAY THAT THE IMPUGNED ORDER DATED 30.06.2016 WAS RECEIVED ON 16.07.2016. CONSIDERING THE CONTENTS OF THE AFFIDAVIT OF THE PA RTNER OF THE ASSESSEE THAT HE WAS OBSERVING JAIN PARUSHAN FROM 29 TH AUGUST 2016 TO 5 TH SEPTEMBER 2016 AND THEREAFTER ATTEND PILGRIMAGE AT PALI THANA JAIN TEMPLE AND RETURN TO MUMBAI ONLY ON 13.09.2016 AND THE APPEAL WAS FILED IMMEDIATELY AFTER PROPER CONSULTATION WITH AD VOCATE ON 27.09.2016. THE ASSESSEE HAS SHOWN BONAFIDELY EXPLA INED THE DELAY AND WE HAVE FURTHER SEEN THAT THE DELAY IS OF ONLY 13 D AYS, THUS, THE DELAY IN FILING OF THE APPEAL IS CONDONED. 10. NOW WE ARE ADVERTING TO THE MERITS OF GROUNDS OF AP PEAL. WE HAVE SEEN THAT THE ASSESSEE HAS RAISED AS MANY AS SEVEN GROUN DS OF APPEALS. GROUND NO.1 RELATES TO REJECTION OF BOOKS OF ACCOUN TS, WE NOTED THAT THE ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 9 LD AR FOR THE ASSESSEE HAS NOT ARGUED IN SUPPORT OF THIS GROUND, THEREFORE, THIS GROUND IS TREATED AS NOT PRESSED AN D DISMISSED. REST OF THE GROUNDS OF APPEAL ARE RELATED TO THE DISALLOWANCE O F BOGUS PURCHASES. THE ASSESSING OFFICER MADE THE ADDITIONS/ DISALLOWA NCE BY TAKING VIEW THAT THE ASSESSEE HAS SHOWN PURCHASES FROM THE PART IES WHICH ARE IDENTIFIED AS HAWALA DEALERS BY SALES TAX DEPARTMEN T OF THE STATE GOVERNMENT. THE LIST OF SUCH HAWALA DEALERS WAS FOR WARDED BY THE SALES TAX DEPARTMENT TO THE INVESTIGATION WING OF INCOME TAX AUTHORITIES AND THE ASSESSEE WAS SHOWN AS ONE OF THE BENEFICIARY. A ND THAT DURING THE ASSESSMENT THE ASSESSEE COULD NOT SUBSTANTIATE DELI VERY OF SUCH PURCHASES. THE ASSESSING OFFICER MADE 100% DISALLO WANCES OF SUCH PURCHASES. HOWEVER, ON APPEAL THE LD CIT(A) AFTER CONSIDERING THE DISALLOWANCE @ 25% OF THE BOGUS PURCHASES NOTED THA T DISALLOWANCE @ 25% OF HAWALA PURCHASES ARE IS LESS THAN THE SUPPRE SSED GP, THEREFORE, DISALLOWANCE TO THE EXTENT OF ALLEGED SUPPRESSED GP I.E RS. 6,15,013/- OUT OF TOTAL HAWALA PURCHASE WAS SUSTAINED. THE LD AR FOR THE ASSESSEE VEHEMENTLY SUBMITTED THAT THE DISALLOWANCES SUSTAIN ED BY LD CIT(A IS ON HIGHER SIDE AND THAT THE ASSESSEE FOR THE YEAR U NDER CONSIDERATION HAS ALREADY DECLARED GP @ 4.73%. WE HAVE THAT IN THE AY 2007-08 THE ASSESSEE DECLARED GP @ 2.97%, IN AY 2008-09 @ 5.20% AND DURING THE UNDER CONSIDERATION (AY 2009-10) @ 4.73% AND IN SUB SEQUENT YEARS THE ASSESSEE DECLARED GP @ 3.73% FOR AY 2010-11 AND AT 3.44% FOR AY ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 10 2011-12 RESPECTIVELY. CONSIDERING THE GP RATION DEC LARED BY THE ASSESSEE, THE DISALLOWANCES SUSTAINED BY LD CIT(A) IS ON HIGHER SIDE. 11. WE ARE OF THE CONSIDERED OPINION THAT UNDER INCOME TAX ACT ONLY REAL INCOME CAN BE TAXED BY THE REVENUE. WE MAY FURTHER CONCLUDE THAT EVEN IF THE TRANSACTION IS NOT VERIFIABLE, THE ONLY TAXABLE IS THE TAXABLE INCOME COMPONENT AND NOT THE ENTIRE TRANSACTION. AN D AFTER CONSIDERING THE FACTS OF THE CASE AND THE RIVAL CONTENTIONS OF THE PARTIES WE ARE OF THE OPINION THAT IN ORDER TO FULFILL THE GAP OF REVENUE LEAKAGE THE DISALLOWANCE OF REASONABLE PERCENTAGE OF SUCH PURCH ASES WOULD MEET THE END OF JUSTICE. THE HONBLE BOMBAY HIGH COURT I N CIT VS HARIRAM BHAMBHANI IN ITA NO. 313 OF 2013 DECIDED ON 04.2.2015 HELD THAT REVENUE IS NOT ENTITLED TO BRING THE ENTI RE SALES CONSIDERATION TO TAX, BUT ONLY THE PROFIT ATTRIBUTABLE ON THE TOTAL UNRECORDED SALES CONSIDERATION ALONE CAN BE SUBJECT TO INCOME TAX. CONSIDERING THE FACTS OF THE PRESENT CASE THE DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES IS RESTRICTED TO 12% OF THE TOTAL IMPUGNED (DISPUTED) PURCHASES. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/11/2019. SD/- SD/- R.C. SHARMA PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 04.11.2019 SK ITA NO. 5788 MU M 2016-M/S SHREENOX SYNTHETICS 11 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR H BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI