Alleged bogus purchases made by the assessee from dealers without supply of actual goods

The Income Tax Appellate Tribunal dismissed an appeal by the Revenue concerning alleged bogus purchases made by M/s. Futura Infraprojects Ltd. from hawala dealers. While the assessee failed to prove the genuineness of some purchases, the tribunal upheld additions for specific bills and directed a disallowance of 9.44% for others, aligning with the Gross Profit ratio for the assessment year.

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI
BEFORE SHRI AMARJIT SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM

I.T.A. No.661/Mum/2020

Assessment Year: 2010-11)

DCIT-1(1)(2) 579, Aayakar Bhavan, M. K. Road, Mumbai-400020.

vs

M/s. Futura Infraprojects Ltd. 303, 3rd Floor, Rajendra Chambers, 19, Nanabhai Lane, Fort, Mumbai-400001.

Revenue by: Ms. Usha Gaikwad (DR)
Assessee by: None

Date of Hearing: 14/07/2021

Date of Pronouncement: 03/09/2021

O R D E R

1.On the facts and in the circumstances of the case and in law, the Ld, CIT(A) erred restricting the addition to the extent of 9.44% of the total alleged bogus purchases from hawala dealers added by the A.O by ignoring the fact that the assesses could not produce the parties from whom purchases were made thereby failed to discharge the primary onus to establish genuineness and creditworthiness of the purchase transaction during the course of assessment proceedings.

2. The brief facts of the case are that the assessee filed its return of income on 15.10.2010 declaring a total income to the tune of Rs.11,94,110/-. The assessment was completed on 25.03.2013 determining the total income to the tune of Rs.30,74,690/- in view of the provision u/s 143(3) of the I. T. Act, 1961.

3. I find that the appellant has disclosed sales of construction project at Rs.157,681,475/- and the G,P. rate declared during A.Y. 2010-11 is higher than the G.P. rate in A.Y. 2009-10. Considering the above facts and circumstances and the above precedent in appellant's own case for A.Y. 2009-10, I am of the considered opinion that the addition in respect of the purchases of Rs.3,06,185/- from Padmalakshmi Steel Alloys Pvt. Ltd. needs to be upheld in its entirety since the appellant has failed to furnish even the purchase bill relating to the said transaction. In respect of the balance purchases of Rs,23,07,523/- the AO is directed to compute the disallowance at the rate of 9.44% which is the G.P. ratio for this assessment year.

4. In the result, the appeal filed by the revenue is hereby dismissed. Order pronounced in the open court on 03/09/2021.

Please find attached the enclosed file for the full judgement