RESHMA EMTERPRISES, MUMBAI v. INCOME TAX OFFICER WARD 14(2)(3), MUMBAI

ITA 3390/MUM/2014 | 2007-2008
Pronouncement Date: 05-10-2016

Appeal Details

RSA Number 339019914 RSA 2014
Assessee PAN AAAFR7937B
Bench Mumbai
Appeal Number ITA 3390/MUM/2014
Duration Of Justice 2 year(s) 4 month(s) 23 day(s)
Appellant RESHMA EMTERPRISES, MUMBAI
Respondent INCOME TAX OFFICER WARD 14(2)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 05-10-2016
Appeal Filed By Assessee
Bench Allotted D
Tribunal Order Date 05-10-2016
Assessment Year 2007-2008
Appeal Filed On 12-05-2014
Judgment Text
D IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SHRI ASHWANI TANEJA ACCOUNTANT MEMBER ITA NO.6246/MUM/2013 ASSESSMENT YEAR: 2004-05 RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 / VS. ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 ( APPELLANT ) ( REVENUE ) P.A. NO . AAAFR7937B ITA NO.6667/MUM/2013 ASSESSMENT YEAR: 2004-05 ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 / VS. RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 (REVENUE) (RESPONDENT ) P.A. NO . AAAF R7937B ITA NO.6247/MUM/2013 ASSESSMENT YEAR: 2005-06 RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 / VS. ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 (APPELLANT ) (REVENUE) P.A. NO . AAAFR7937B RESHMA ENTERPRISES 2 ITA NO.6668/MUM/2013 ASSESSMENT YEAR: 2005-06 ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 / VS. RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 (REVENUE) (RESPONDENT ) P.A. NO . AAAFR7937B ITA NO.3390/MUM/2014 ASSESSMENT YEAR: 2007-08 RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 / VS. ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 (APPELLANT ) (REVENUE) P.A. NO . AAAFR7937B ITA NO.4631/MUM/2014 ASSESSMENT YEAR: 2007-08 ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 / VS. RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 (REVENUE) (RESPONDENT ) P.A. NO . AAAFR7937B ITA NO.6248/MUM /2013 ASSESSMENT YEAR: 2008-09 RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 / VS. ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 (APPELLANT ) (REVENUE) P.A. NO . AAAFR7937B RESHMA ENTERPRISES 3 ITA NO.6669/MUM/2013 ASSESSMENT YEAR: 2008-09 ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 / VS. RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 (REVENUE) (RESPONDENT ) P.A. NO . AAAFR7937B ITA NO.6249/MUM/2013 ASSESSMENT YEAR: 2009-10 RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 / VS. ITO WD 14(2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 (APPELLANT ) (REVENUE) P.A. NO . AAAFR7937B ITA NO.6670/MUM/2013 ASSESSMENT YEAR: 2009-10 ITO WD 14( 2)(3) EARNEST HOUSE NARIMAN POINT MUMBAI-400021 / VS. RESHMA ENTERPRISES 282 KALBADEVI RD. MUMBAI-400002 (REVENUE) (RESPONDENT ) P.A. NO . AAAFR7937B APPELLANT BY SHRI DEEPAK TRALSHAWALA (AR) REVENUE BY SHRI B.S. BIST ( SR. DR) ! ' # $% / DATE OF HEARING : 05/10/2016 # $% / DATE OF ORDER: 05/10/2016 / O R D E R PER BENCH: THESE CROSS APPEALS ARE FILED BY THE REVENUE AND ASSESSEE AGAINST SEPARATE ORDERS OF LD. CIT(A) PASS ED FOR EACH OF THE AFORESAID ASSESSMENT YEARS INVOLVING IDENTIC AL ISSUE. RESHMA ENTERPRISES 4 2. DURING THE COURSE OF HEARING ARGUMENTS WERE MADE B Y SHRI DEEPAK TRALSHAWALA AUTHORISED REPRESENTATIVE (AR) ON SHRI DEEPAK TRALSHAWALA (AR) ON BEHALF OF THE ASSES SEE AND BY SHRI B.S. BIST DEPARTMENTAL REPRESENTATIVE (SR. DR ) ON BEHALF OF THE REVENUE. WE SHALL FIRST TAKE UP APPEAL FOR ASSESSMENT YEAR 2 004-05 IN ITA NO. 6667/MUM/2013 REVENUES APPEAL AND ITA NO.6246/MUM/20013 ASSESSEES APPEAL. 3. THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF LD. CIT(A) DATED 29.08.2013 PASSED AGAINST THE ASSESSME NT ORDER U/S 143(3) R.W.S. 147 OF THE ACT DATED 14.12.2011 ON FOLLOWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CT BY NOT SUSTAINING ADDITION U/S.69 AFTER HAVING ACCEPTE D THE FINDING IN PRINCIPLE THAT THE PURCHASES WERE MADE FROM UNDISCLOSED/UNVERIFIABLE/UNIDENTIFIABLE PARTIES IN THE GREY MARKET BY INVESTING IN CASH AND THE PURCHASES FROM THE GROUP CONCERNS OF SHRI RAKESH GUPTA & FAMILY WERE ONLY ACCOMMODATION ENTRIES AND NOT ACTU AL PURCHASES. 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) AFTER HAVING ACCEPTED THE FACT THAT THE PURCHASES MADE FROM OR THROUGH SHRI RAKESH KUMAR GUPTA AND HIS FAMILY MEMBERS ARE BOGUS ERRED IN LA W IN NOT CONFIRMING THE ADDITION AT LEAST TO THE EXTENT OF PEAK OF THE PURCHASES MADE FROM SUCH PARTIES ON ACCOUNT OF BOGUS PURCHASES MADE IN CASH FROM THE OPEN MARKET O UT OF UNACCOUNTED CASH IN VIEW OF THE DECISION HELD B Y THE HON'BLE ITAT'S C-BENCH AHMEDABAD IN THE CASE OF VIJAY PROTEINS LTD. VS. ACIT (58 ITD 428) 4. ON THE OTHER HAND ASSESSEE HAD FILED AN APPEAL AG AINST THE AFORESAID ORDER ON THE FOLLOWING GROUNDS: RESHMA ENTERPRISES 5 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A)-25 MUMBAI ERRED IN DIRECTING THE A 0 TO MAKE AN AD HOC ADDITION OF RS. 530 699/- (REPRESENTING 10% OF THE PURCHASES ALLEGED TO BE BO GUS BY THE A O)'TO COVER UP THE DIFFERENCE OF GP IN RECORD ING THE ABOVE SAID PURCHASES AS WELL AS TO PLUG ANY LEAKAGE OF REVENUE AND THE ADDITION RETAINED BY HIM BE DELETED IN TOTO. 5. DURING THE COURSE OF HEARING LD. COUNSEL OF THE A SSESSEE RELIED UPON THE JUDGMENT OF THE TRIBUNAL IN THE CAS E OF ASHOK TALREJA (HUF) DATED 17.03.2016 AND SUBMITTED THAT I T IS A CASE OF SISTER CONCERN OF THE ASSESSEE WHEREIN TOTAL AMO UNT HAS BEEN DELETED AND THEREFORE IN VIEW OF THE SAME REVE NUES APPEAL SHOULD BE DISMISSED AND ASSESSEES APPEAL SH OULD BE ALLOWED. 5.1. PER CONTRA LD. DR RELIED UPON THE ORDER OF THE AO AND REQUESTED THAT THE REVENUES APPEAL SHOULD BE ALLOW ED AND ASSESSEES APPEAL SHOULD BE DISMISSED. 5.2. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWE R AUTHORITIES. THE BRIEF BACKGROUND OF THE CASE IS TH AT ASSESSEE IS A PARTNERSHIP FIRM AND DURING THE YEAR IT WAS EN GAGED IN THE BUSINESS OF TRADING OF CLOTH ITEMS. THE ORIGINAL AS SESSMENT WAS COMPLETED U/S 143(3). SUBSEQUENTLY THE CASE OF ASSESSEE WAS REOPENED U/S 147 BASED UPON INFORMATION GATHERE D DURING THE SURVEY OPERATIONS AT THE PREMISES OF ONE SHRI RAKESH KUMAR M. GUPTA. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO PROVE THE TRANSACTIONS DONE WITH THE PARTIES CONNECTED WITH T HE AFORESAID MR. GUPTA. THE AO ASKED TO SUBSTANTIATE T HE GENUINENESS OF THE PURCHASE MADE FROM THESE PARTIES WITH DOCUMENTARY EVIDENCES AND ASKED TO EXPLAIN AS TO WH Y SUCH RESHMA ENTERPRISES 6 PURCHASES SHOULD NOT BE TREATED AS NON-GENUINE AND ADDED TO THE TOTAL INCOME. IN RESPONSE THE ASSESSEE SUBMITT ED THAT IT HAD MADE PURCHASES FROM THESE PARTIES AND THE MATER IAL PURCHASED FROM THESE PARTIES HAD BEEN FURTHER SOLD BY IT DURING THE YEAR. IN SUPPORT OF ITS CLAIM THE ASSES SEE SUBMITTED FOLLOWING DOCUMENTARY EVIDENCES: A) COPY OF CONFIRMATION OF ACCOUNT OF SAID PARTIES B) COPY OF BANK STATEMENT HIGHLIGHTING PAYMENT TO S AID PARTIES BY ACCOUNT PAYEE CHEQUE. C) COPY OF BILLS OF SAID PARTIES IN RESPECT OF PURC HASES MADE FROM THEM. D) COPY OF DAY TO DAY MOVEMENT OF THE MATERIALS (QU ANTITY WISE AND QUALITY WISE) PURCHASED FROM THESE PARTIES ALONG WITH THE SALE OF THIS MATERIAL MADE TO ASSESSEE'S R EGULAR CUSTOMERS. E) COPY OF SALES BILLS ISSUED TO ASSESSEES REGULAR CUSTOMERS TO WHOM THIS MATERIAL WAS SOLD. 5.3. THUS ASSESSEE CLAIMED THAT PURCHASE FROM THESE PA RTIES WERE FULLY EXPLAINED AND DULY CORROBORATED WITH THE DOCUMENTARY EVIDENCES. HOWEVER AO WAS NOT CONVINCE D WITH THE RESPONSE OF THE ASSESSEE AND RELYING UPON THE S TATEMENT MADE BY THE SAID PERSONS THE ENTIRE AMOUNT OF PURC HASES MADE FROM THESE PERSONS WERE TREATED AS BOGUS AND A DDED TO THE TOTAL INCOME OF THE ASSESSEE. 5.4. BEING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFO RE LD. CIT(A) WHEREIN DETAILED SUBMISSIONS WERE MADE ALONG WITH DOCUMENTARY EVIDENCES. AFTER CONSIDERING SUBMISSION S OF THE ASSESSEE LD. CIT(A) DELETED THE ADDITION PARTLY BY SUSTAINING THE DISALLOWANCE TO THE EXTENT OF 10% WITH FOLLOWI NG OBSERVATIONS: RESHMA ENTERPRISES 7 5.5. THE APPELLANT IN THE STATEMENT OF FACTS SUB MITTED DURING THE COURSE OF APPELLATE PROCEEDINGS STATED T HAT IT HAD SUBMITTED XEROX COPIES OF PURCHASE BILLS OF SAI D PARTIES ALONG WITH CHART FOR DAY TO DAY MOVEMENT OF THE MATERIALS ALONG WITH DETAILS OF SALES MADE IN R ESPECT OF PURCHASES EFFECTED FROM THESE PARTIES. THE APPELLAN T HAD MADE PAYMENT TO THESE PARTIES BY PAYEES ACCOUNT CHEQUES AND HAD SUBMITTED RELEVANT XEROX COPIES OF BANK STATEMENTS REFLECTING THESE PAYMENTS IN SUPPOR T OF CLAIM OF GENUINENESS OF PURCHASES. THE LEDGER EXTRA CTS OF THESE PARTIES STATING THEIR CURRENT ADDRESS PAN D ULY CONFIRMED BY THEM WERE FILED BEFORE THE AO. THE APPELLANT FURTHER STATED THAT THE LD. AO HAS NO T POINTED OUT ANY DISCREPANCIES IN THE DETAILED QUANT ITATIVE STATEMENTS FURNISHED ALONG WITH COPIES OF SALES AND PURCHASES BILLS AND HAS NOT POINTED OUT ANY INFIRMI TIES IN THE BOOKS OF ACCOUNTS OR THE QUANTITY STATEMENTS FI LED BUT IN FACT HAS STATED THAT 'THUS APPARENTLY NOTHIN G WRONG IS VISIBLE'. THIS GOES TO PROVE THAT THE ACCO UNT OF THE APPELLANT IS FULLY AUTHENTICATED AND MERELY ON THE STATEMENT MADE BY A PERSON THAT THE PURCHASES A RE BOGUS AND NOT RECORDED IN HIS BOOKS CANNOT BE HELD TO BE BOGUS PURCHASES. THE APPELLANT FURTHER SUBMITTED THAT THE LD. AO HAS NOT GIVEN THE PEL1ANT AN OPPORTUNITY TO CROSS EXAMINE T HESE PARTIES IN RESPECT OF THEIR CLAIM THAT THESE PARTIE S ARE NOT GENUINE. THE APPELLANT HAD FURNISHED COPIES OF HIS BANK STATEMENTS WHEREIN THE PAYMENTS MADE TO THESE PARTIES BY ACCOUNT PAYEE CHEQUES WERE REFLECTED. TH E LD. AO WAS ALSO INFORMED THAT SINCE THE SALES ARE ACCEP TED; PURCHASES ARE PRESUMED TO HAVE BEEN MADE EFFECTING SUCH SALES AND AS BILL WISE QUANTITATIVE DETAILS OF PURC HASES AND SALES ARE FURNISHED ALONG WITH DETAILED INVENTO RY OF CLOSING STOCK THE BOOK RESULT BE ACCEPTED AND NO A DDITIONS CAN BE MADE ON THE ASSUMPTION THAT PURCHASES FROM T HESE PARTIES ARE BOGUS. THE APPELLANT ALSO STATED THAT THE LD. AO SHOULD HA VE CONSIDERED THE FOLLOWING DECISIONS: I) OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF YUSUF FAZLEHUSAIN ZAVERI AND ANR. VS. AJAY SINGH ITO AND OTHERS 213 ITR 712 (BOM.) II) OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF DC IT VS. RESHMA ENTERPRISES 8 ADINATH INDUSTRIES [2001] 252 ITR 476 (GUJ.) III) OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF R.B . JESSARAM FATEHCHAND (SUGAR DEPARTMENT) VS. CIT [197 0] 75 ITR 33 (BOM.) IV) OF THE HON'BLE TRIBUNAL CALCUTTA 'B' BENCH IN THE C ASE OF SAGAR BOSE VS. ITO [1996] 56 LTD 561 (CAL.) V) OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. U.M. SHAH PROP. SHRENIK TRADING CO. [1973] 90 ITR 396 (BOM.) HENCE THE APPELLANT OBJECTED TO THE ADDITION OF RS. 53 06 985/- BEING THE ENTIRE PURCHASES FROM SAID PA RTIES. I HAVE PERUSED THE ASSESSMENT ORDER AND THE FACTS AND CIRCUMSTANCE OF THE CASE. ON PLAIN READING OF T HE ASSESSMENT ORDER I FIND THAT THE AO HAS BASICALLY RELIED ON THE STATEMENTS RECORDED OF SHRI RAKESHKUMAR M. GUPTA & OTHERS DURING THE COURSE OF SURVEY ACTION U/S 133A AND SUBSEQUENTLY RE-AFFIRMED ON OATH U/S 131 OF THE ACT TO MAKE ADDITIONS IN HANDS OF PURCHASER PARTY I.E. THE APPELLANT IN THIS CASE. HOWEVER THE AO DID NOT PROVIDE THE OPPORTUNITY OF CROSS EXAMINATION OF SAID PARTIES TO THE APPELLANT IN SPITE OF SPECIFIC REQUEST MADE BY THE APPELLANT. THE HONTHIL E SUPREME COURT IN THE CASE OF KISHANCHAND CHELLARAM VS. CIT [1980] 125 ITR 713 (SC) HAS HELD THAT BEFORE THE INCOME-TAX AUTHORITIES COULD RELY UPON ANY EVIDENCE THEY ARE BOUND TO PRODUCE IT BEFORE THE ASSESSEE SO THAT THE ASSESSEE COULD CONTROVERT THE STATEMENTS CONTAINED IN IT BY ASKING FOR AN OPPORTUNITY TO CROSS EXAMINE TH E PERSONS GIVING SUCH EVIDENCE. THE LAW PRONOUNCED BY HON'BLE SUPREME COURT IS THE LAW OF THE LAND AND TH E HON'BLE SUPREME COURT HAS HELD THAT IF CROSS EXAMIN ATION IS NOT PERMITTED IN THAT CASE THE STATEMENT OF THIRD PARTIES CANNOT BE RELIED UPON AND USED AGAINST THE ASSESSEE . SINCE IN THE PRESENT CASE THE CROSS EXAMINATION OF THE ALLEGED HAWALA PARTIES WAS NOT PERMITTED THE STATE MENT OF THOSE PARTIES CANNOT BE USED AGAINST THE APPELLANT. THEREFORE ADDITIONS MADE MERELY ON THE BASIS OF ST ATEMENT OF THOSE PARTIES WITHOUT ANY CORROBORATIVE EVIDENCE S CANNOT BE THE BASIS OF ADDITIONS IN THE ASSESSMENT. 5.7. I FURTHER FIND THAT THE APPELLANT HAS SUBMITTE D DURING ASSESSMENT PROCEEDINGS THE DAY-TO-DAY MOVEMENT OF T HE RESHMA ENTERPRISES 9 MATERIAL PURCHASED FROM THESE PARTIES ALONG WITH TH E CORRESPONDING SALES/ INVENTORY OF STOCK AT THE YEAR END. THE BOOKS OF ACCOUNTS OF THE APPELLANT ARE AUDITED WHEREIN THE COMPLETE PURCHASE AND SALE DETAILS ARE INCORPORATED AND THERE IS NO CASE OF ANY ADVERSE C OMMENTS MADE BY THE AUDITORS ON THE SAME. THERE ARE NO ADVE RSE COMMENTS IN THE ASSESSMENT ORDER ABOUT THE QUANTITA TIVE RECONCILIATION. HENCE IF THE SALES OF APPELLANT AR E I AS GENUINE THE CORRESPONDING PURCHASES CANNOT BE CONSIDERED AS BOGUS. 5.8. THE AO HAS NOT DEALT WITH THE CASE LAWS RELIED UPON BY THE APPELLANT IN REACHING AT CONCLUSION AGAINST THE APPELLANT. THE RATIO OF SAID JUDGMENTS SEEMS TO BE THAT THERE CAN BE NO SALES WITHOUT CORRESPONDING PURCHASES AND WHEN THE QUANTITATIVE DETAILS OF PURCHASE SALES & CLOSING STOCK ARE AVAILABLE THE SAME CANNOT BE COMPLETELY OVERLOOKED IN ARRIVING AT ANY ADVERSE CONCLUSION. 5.9. IN ABOVE CIRCUMSTANCES EVEN ASSUMING THE PURCHASES FROM SAID PARTIES TREATED AS BOGUS FOR TH E REASONS STATED IN ASSESSMENT ORDER THE CONTENTION OF APPELLANT THAT IT HAS SHOWN DAY TO DAY MOVEMENT OF ALLEGED MATERIAL PURCHASED CANNOT BE OVERLOOKED. A LOGICAL CONCLUSION WHICH MAY BE DRAWN IN SUCH SITUATION MAY BE THAT THE APPELLANT HAS RECORDED SOME SALES IN ITS B OOKS OF ACCOUNTS WHICH MATERIALS MIGHT HAVE BEEN PURCHASED BY IT IN GREY MARKET WITHOUT BILLS; AND TO REGULARIZE SUCH PURCHASES IN GREY MARKET THE APPELLANT MIGHT HAVE TAKEN ACCOMMODATION BILLS FROM THE SAID PARTIES FOR PURCH ASE OF SPECIFIED MATERIAL. IN FACT THE AO IN PAGE 13 O F THE ASSESSMENT ORDER HAS STATED AS UNDER: 'IN THE CIRCUMSTANCES THE BILLS INTRODUCED IN THE BOOKS ARE NOTHING BUT COLOURABLE DEVICE ADOPTED TO COVER UP INVESTMENT IN PURCHASE MADE FROM OUTSIDE THE BOOKS WHICH ATTRACTS THE PROVISION OF SEC. 69 OF THE IT A CT.' THE AFORESAID CONCLUSION REACHED BY AO DOES NOT DEN Y AND IN FACT GIVES AN ILLUSION THAT PURCHASES HAVE B EEN MADE BY THE APPELLANT FROM OUTSIDE THE BOOKS (I.E. IN CASH) AND TO COVER UP SUCH INVESTMENT IN CASH THE SAID B ILLS ARE INTRODUCED IN THE BOOKS. ONE CANNOT DENY THE GROUND REALITY THAT GOODS MAY BE AVAILABLE IN GREY MARKET WITHOUT BILL AND RESHMA ENTERPRISES 10 BY CASH AT COMPARATIVELY LESSER PRICES SUCH A SITU ATION IT WOULD NOT BE JUSTIFIED TO MAKE ADDITION OF THE FULL AMOUNT OF PURCHASE MADE FROM SAID PARTIES. RATHER THE CAU SE OF JUSTICE WOULD HE MET BY MAKING ADDITION OF A REASON ABLE PERCENTAGE OF SUCH PURCHASES IN ORDER TO FILL IN TH E GAP AND PLUCK LOOPHOLE OF ANY REVENUE LEAKAGE IN AFORESAID CIRCUMSTANCES. I FEEL THAT ESTIMATE OF DIFFERENTIAL PROFIT @10% OF DISPUTED PURCHASES WILL BE FAIR AND REASONABLE TO COVER UP THE DIFFERENCE OF GP IN RECO RDING THE SAID PURCHASES AS WELL TO PLUG ANY LEAKAGE OF R EVENUE. THEREFORE ADDITION. @10% OF DISPUTED PURCHASES I.E . RS. 5 30 699/- IS CONFIRMED AND THE BALANCE AMOUNT OF ADDITION IS DELETED HENCE THE APPELLANT GETS PARTI AL RELIEF OF RS. 47 76 286/-. 5.5. THUS FROM THE ABOVE ORDER OF LD. CIT(A) IT IS NO TED THAT AFTER ANALYZING DETAILS AND EVIDENCES OF THE CASE IT HAS BEEN HELD BY THE LD. CIT(A) THAT SINCE SALES OF THE ASSE SSEE HAVE BEEN TREATED AS GENUINE OF THE AO THE CORRESPONDIN G PURCHASES CANNOT BE CONSIDERED AS BOGUS ESPECIALLY WHEN QUANTITATIVE CONCILIATION WAS PRODUCED BEFORE THE A O AND NOTHING WRONG HAS BEEN FOUND THEREIN. IT WAS THUS H ELD THAT SINCE SALES HAVE BEEN ACCEPTED THEREFORE GOODS SOL D MUST HAVE BEEN PURCHASED ALSO THUS ENTIRE PURCHASES CO ULD NOT HAVE BEEN DISALLOWED. BUT IT WAS FURTHER HELD THAT SINCE PURCHASES COULD NOT BE FULLY SUBSTANTIATED THEREFOR E THERE MAY BE SOME ELEMENT OF INFLATION THEREIN. UNDER THE SE CIRCUMSTANCES LD. CIT(A) TOOK A VIEW TO SUSTAIN DI SALLOWANCES TO THE 10% OF THE PURCHASES. DURING THE COURSE OF H EARING BEFORE US LD. COUNSEL OF THE ASSESSEE REQUESTED TH AT TOTAL DISALLOWANCES SHOULD BE DELETED AND PURCHASES SHOUL D BE FULLY ALLOWED. 5.6. PER CONTRA LD. DR SUBMITTED THAT SINCE PURCHASES COULD NOT BE SUBSTANTIATED FULLY THEREFORE ELEMENT OF IN FLATION RESHMA ENTERPRISES 11 CANNOT BE TOTALLY RULED OUT. THEREFORE SOME REASON ABLE DISALLOWANCE MUST BE SUSTAINED. 5.7. IT WAS ALTERNATIVELY SUBMITTED BY THE LD. COUNSEL THAT DISALLOWANCE @ 10% IS VERY HIGH AND RATE OF 5% WAS PROPOSED. THIS WAS NOT OBJECTED TO BY THE LD. DR. THUS TAKIN G INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND TO MEET ENDS OF JUSTICE AND KEEPING IN VIEW PECULIAR F ACTS OF THIS CASE WE SUSTAIN THE DISALLOWANCE TO THE EXTENT OF 5% AND UPHOLD THE ACTION OF LD. CIT(A) FOR DELETING THE BA LANCE ADDITIONS. THUS ORDER OF LD. CIT(A) IS MODIFIED AC CORDINGLY AS A RESULT OF WHICH ONLY 5% OF THE DISPUTED PURCHASES STANDS DISALLOWED AND THE REMAINING DISALLOWANCE MADE BY T HE AO WOULD BE DELETED. 6. AS A RESULT APPEAL OF THE REVENUE IS DISMISSED AN D THAT OF ASSESSEE IS PARTLY ALLOWED. NOW WE TAKE UP APPEALS FOR A.YS. 2005-06 2007-08 2008- 09 & 2009-10 IN ITA NOS.6247 & 6668/MUM/2013 ITA NOS. 4631 & 3390/MUM/14 ITA NOS.6248 & 6669/MUM/2013 & ITA NOS. 6249/MUM/2013 & 6670/MUM/2013 7. IT WAS STATED BY BOTH THE PARTIES THAT FACTS INVOL VED IN ALL THE YEARS ARE IDENTICAL. THERE ARE NO DISTINGUISHIN G FEATURES EXCEPT THE AMOUNTS INVOLVED. UNDER THESE CIRCUMSTAN CES WE DIRECT THE AO TO FOLLOW OUR ORDER FOR A.Y. 2004-05 AND DISALLOWANCE TO THE EXTENT OF 5% IS SUSTAINED IN AL L THE YEARS AND BALANCE ADDITION IS DIRECTED TO BE DELETED. RESHMA ENTERPRISES 12 8. AS A RESULT ALL THE REVENUES APPEALS ARE DISMISS ED AND ASSESSEES APPEALS ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF HEARING. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER ! ' MUMBAI; ' DATED : 31/10/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. ) *+ / THE APPELLANT 2. -*+ / THE RESPONDENT. 3. .$ . ! / ( ) ) / THE CIT MUMBAI. 4. .$ . ! / / CIT(A)- MUMBAI 5. 23 45 .$ )% 45$6 ! ' / DR ITAT MUMBAI 6. 7 8 ' / GUARD FILE. / BY ORDER - 2) //TRUE COPY// / (DY./ASSTT. REGISTRAR) ! ' / ITAT MUMBAI