ACIT 21(1), MUMBAI Vs. M/s ELECTROMAG METHODS, MUMBAI

This Income Tax Appellate Tribunal (ITAT) ruling concerns appeals filed by the Revenue (ACIT) against M/s Electromag Methods regarding additions made for bogus purchases across assessment years 2009-10, 2010-11, and 2011-12. The Revenue contested the CIT(A)'s decision to reduce the addition on bogus purchases to 30% and delete the remaining 70%, arguing that the entire bogus claim should be disallowed. The assessee did not appear for the hearing, so the tribunal proceeded based on available records.

IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCH “E” MUMBAI

BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND

SHRI N.K. PRADHAN (ACCOUNTANT MEMBER)

ITA No. 3586/MUM/2019

Assessment Year: 2009-10 &

ITA No. 3587/MUM/2019

Assessment Year: 2010-11 &

ITA No. 3588/MUM/2019

Assessment Year: 2011-12

ACIT-21(1),

Room No. 116, 1st floor, Piramal

Chambers, Parel,

Mumbai-400012.

Appellant

Vs

M/s Electromag Methods

4th Fl. Unique Indl. Estate, Off Veer

Savarkar Marg, Prabhadevi,

Mumbai-400025

PAN No. AAAFE0293R

Respondent

Revenue by : Mr. Amit Pratap Singh, DR

Assessee by : None

Date of Hearing : 30/09/2020

Date of Pronouncement: 01/10/2020

ORDER PER N.K. PRADHAN, A.M.

These captioned appeals filed by the Revenue are directed against the order passed by the Commissioner of Income Tax-(Appeals)-33, Mumbai [in short the ‘CIT(A)’] and arise out of the assessment completed u/s 143(3) r.w.s. 147 of the Income Tax Act 1961, (the ‘Act’). Though the case was fixed for hearing on 30.09.2020, neither the assessee nor its authorized representative participated for virtual hearing before the Tribunal. As there is non compliance by the assessee, we are proceeding to dispose off these appeals by examining the materials available on record and after hearing the Ld. Departmental Representative (DR). Facts being identical, we begin with the AY 2009-10.

2. The grounds of appeal filed by the Revenue read as under :

1. On the facts and circumstances of the case and in law the learned CIT(A) erred in reducing the addition on account of bogus purchases to 30 % thereof at Rs.34,438/- granting a relief of Rs.1,14,792/- without appreciating the fact that the addition made on the basis of credible information received from the Maharashtra Sales Tax Dept.

2. On the facts and circumstances of the case and in law the learned CIT(A) erred in deleting the 70% addition on account of bogus purchases without appreciating the fact that the assessee had failed to discharge his primary onus of proving the genuineness of the purchases claimed.

3. On the facts and circumstances of the case and in law the learned CIT(A) erred in holding that it is proper to add only profit element/benefit embedded in such purchases which is estimate at 30% of purchase amount when the assessee has failed to prove that the quantity of material in the bills was used in the manufacturing activity.

4. On the facts and circumstances of the case and in law the learned CIT(A) erred in deleting the 70% of addition on account of bogus purchases without appreciating the fact that once it is proved that the purchase claimed was bogus then there is no reason or basis to estimate the disallowance and the entire bogus claim should be disallowed.

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