M/s.Mehta Mukesh Kapoorchand (HUF),, Pune v. Income-tax Officer,,

ITA 802/PUN/2015 | 2010-2011
Pronouncement Date: 17-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 80224514 RSA 2015
Assessee PAN AAHHM7396G
Bench Pune
Appeal Number ITA 802/PUN/2015
Duration Of Justice 1 year(s) 4 month(s) 15 day(s)
Appellant M/s.Mehta Mukesh Kapoorchand (HUF),, Pune
Respondent Income-tax Officer,,
Appeal Type Income Tax Appeal
Pronouncement Date 17-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 17-10-2016
Date Of Final Hearing 11-08-2016
Next Hearing Date 11-08-2016
Assessment Year 2010-2011
Appeal Filed On 01-06-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH PUN E !'#'' $ % & BEFORE SHRI R.K. PANDA AM AND SHRI VIKAS AWASTHY JM / ITA NO. 802/PN/2015 %' ( ')( / ASSESSMENT YEAR : 2010-11 M/S. MEHTA MUKESH KAPOORCHAND (HUF) B-1 SHANTIBAN HSG. SOCIETY NEAR CHAPHEKAR CHOWK CHINCHWAD PUNE-411033 PAN : AAHHM7396G ....... / APPELLANT ' / V/S. INCOME TAX OFFICER WARD 9(3) PUNE / RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI HINTENDRA NINAWE / DATE OF HEARING : 18-08-2016 / DATE OF PRONOUNCEMENT : 17-10-2016 * / ORDER PER VIKAS AWASTHY JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-6 PUNE DATED 26-02- 2015 FOR THE ASSESSMENT YEAR 2010-11. 2 ITA NO. 802/PN/2015 A.Y. 2010-11 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AUTO COMPONENTS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR TH E IMPUGNED ASSESSMENT YEAR ON 15-10-2010 DECLARING TOTAL INCOME OF ` 7 39 450/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY THR OUGH CASS AND ACCORDINGLY FIRST NOTICE U/S. 143(2) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 27-08-2011. DURING THE COURSE OF ASSESSMENT PROCEED INGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS PURCHA SED STEEL FROM VARIOUS PARTIES. TO VERIFY THE GENUINENESS OF THE PURCH ASES AND UNSECURED LOANS THE ASSESSING OFFICER ISSUED NOTICE TO VAR IOUS PARTIES U/S. 133(6) OF THE ACT. SINCE THE PARTIES FROM WHOM INFORMAT ION WAS SOUGHT U/S. 133(6) FAILED TO APPEAR AND THE ASSESSEE FAILED TO PRODUCE CONFIRMATIONS FROM THE PARTIES THE ASSESSING OFFICER MADE AD DITION OF ` 89 08 557/- (SUBSEQUENTLY RECTIFIED AS ` 70 42 475/- U/S. 154 OF THE ACT) ON ACCOUNT OF BOGUS PURCHASES. THE ASSESSING OFFICE R MADE ADDITION U/S. 69C OF THE ACT ON THE GROUND THAT THE AS SESSEE HAS NOT BEEN ABLE TO PROVE THE GENUINENESS OF THE PARTIES AND N O DOCUMENT SUCH AS DELIVERY CHALLANS OCTROI RECEIPTS BANK STATEMENT ETC. WAS FURNISHED TO SHOW THE GENUINENESS OF THE TRANSACTIONS. 2.1 AGGRIEVED BY THE ASSESSMENT ORDER DATED 25-03-201 3 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) TH E ASSESSEE FURNISHED CONFIRMATION LETTERS FROM VARIOUS SUPPLIE RS LEDGER EXTRACTS OF THE PARTIES COPY OF BANK STATEMENT ETC. TO SHOW THE GENUINENESS OF TRANSACTIONS. THE COMMISSIONER OF INCOME T AX (APPEALS) AGREED IN PRINCIPLE WITH THE FINDINGS OF ASSESSING OFFICE R AND 3 ITA NO. 802/PN/2015 A.Y. 2010-11 CONFIRMED THE ADDITION OF ` 59 37 660/-. STILL AGGRIEVED BY THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI V.L. JAIN APPEARING ON BEHALF OF THE ASSESSEE SUBMIT TED THAT THE AUTHORITIES BELOW HAVE ERRED IN MAKING ADDITION U/S. 69 C OF THE ACT ON ACCOUNT OF BOGUS PURCHASES. THE LD. AR CONTENDED T HAT A PERUSAL OF IMPUGNED ORDER WOULD SHOW THAT NOTICE U/S. 133(6) WAS SEN T TO 18 PARTIES. SOME OF THE PARTIES DID NOT RESPOND TO THE NOT ICE AND TO SOME OF THE SUPPLIERS THE NOTICE WAS NOT SERVED. THE MAIN REA SON FOR NON- SERVICE OF NOTICE WAS THAT THE PARTIES HAD SHIFTED FROM TH E ADDRESS WHICH WAS AVAILABLE WITH THE ASSESSEE. THE LD. AR CONTEND ED THAT THE ASSESSEE HAD MADE PAYMENTS TO ALL THE PARTIES/SUPPLIERS THROUGH CHEQUES. THE ASSESSEE HAD PRODUCED BANK STATEMENT T O SHOW THAT ALL THE PAYMENTS WERE MADE THROUGH CHEQUE. IT IS NOT THE CASE OF THE REVENUE THAT THE PAYMENTS MADE BY THE ASSESSEE THRO UGH CHEQUE HAVE BEEN RECEIVED BACK BY THE ASSESSEE IN CASH. THE LD. AR POINTED THAT THE ASSESSING OFFICER HAD MADE ADDITION ON ACCOUNT OF BOG US PURCHASES U/S. 69C OF THE ACT. FURTHER THE ASSESSING O FFICER IN PARA 5 OF THE ASSESSMENT ORDER HAS USED EXPRESSION WITHOUT P REJUDICE AND THEREAFTER OBSERVED THAT THE CASH PURCHASES ARE LIABLE TO BE DISALLOWED U/S. 40A(3) OF THE ACT. THE ASSESSING OFFICER IS HIMSELF NOT C LEAR WHETHER THE ADDITION HAS TO BE MADE U/S. 69C OR U/S. 40A(3) OF THE ACT . THE ASSESSING OFFICER HAS MADE ADDITION MERELY ON THE BAS IS OF SUSPICION. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE SUB JECT TO AUDIT AND THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT. IN FACT THE ASSESSING OFFICER HAS ACCEPTED THE GROSS PROFIT (GP) DISCLOSED BY THE ASSESSEE. THE LD. AR SUBMITTED THAT THE 4 ITA NO. 802/PN/2015 A.Y. 2010-11 PROVISIONS OF SECTION 69C DOES NOT APPLY IN THE PRESENT CASE. THE ASSESSING OFFICER IN HIS ORDER HAS OBSERVED THAT THE SALE S TAX DEPARTMENT HAS PUBLISHED THE LIST OF SUSPECTED HAWALA PAR TIES IN WHICH THE NAME OF SOME OF THE PARTIES WITH WHOM THE ASSESSEE HAD DEALINGS ARE INCLUDED. HOWEVER THE ASSESSING OFFICER HAS NOT SPECIFIE D THE NAME OF PARTIES FROM WHOM THE ASSESSEE HAD MADE PURCHA SES ARE ALSO INVOLVED IN HAWALA TRANSACTIONS. THE CONFIRMATIONS RECEIVED FROM M/S. RIDHI SALES CORPORATION MUMBAI AND M/S. RED ROSE STEEL P. L TD. MUMBAI HAVE BEEN REJECTED DESPITE THE FACT PAN OF THE PARTIES WAS MENTIONED ON CONFIRMATION LETTERS. THE ASSESSING OFFICER REJ ECTED THE CONFIRMATIONS MERELY ON THE GROUNDS THAT THE ADDRESS O F BOTH THE PARTIES IS NOT PRINTED ON LETTER HEAD BUT IS TYPED. 3.1 THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN OBSERVING THAT THE ASSESSEE HAS NOT FILED CONFIRMATIONS. THE ASSESS EE FILED CONFIRMATION FROM ALL THE PARTIES. THE LD. AR REFERRED TO PA GES 22 TO 48 OF THE PAPER BOOK TO SHOW THAT VARIOUS SUPPLIERS HAVE FILE D CONFIRMATIONS AS WELL AS THEIR RESPECTIVE BANK STATEMENTS. THE LD. AR CONTENDED THAT ONLY TWO PARTIES I.E. OM METALLOYS MUMBAI A ND S.K. ENGINEERS MUMBAI HAVE NOT FILED CONFIRMATIONS HOWEVER BANK STATEMENT OF ASSESSEE WOULD SHOW THAT THE CHEQUES ISSU ED BY THE ASSESSEE HAVE BEEN CREDITED TO THE BANK ACCOUNTS OF T HE RESPECTIVE PARTIES. THE LD. AR SUBMITTED THAT IF THE PARTIES DO NOT R ESPOND TO THE COMMUNICATION/NOTICE ISSUED U/S. 133(6) ADVERSE INFERENCE SH OULD NOT BE DRAWN AGAINST THE ASSESSEE. IN SUPPORT OF HIS SUBMIS SIONS THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS : 5 ITA NO. 802/PN/2015 A.Y. 2010-11 I. COMMISSIONER OF INCOME TAX VS. M/S. NANGALIA FABRICS PVT. LT D. IN TAX APPEAL NO. 689 OF 2010 DECIDED ON 22-04-2013 BY H ON'BLE GUJARAT HIGH COURT; II. COMMISSIONER OF INCOME TAX VS. G.P. INTERNATIONAL LTD. 325 I TR 25 (P&H); III. COMMISSIONER OF INCOME TAX VS. NIKUNJ EXIMP ENTERPRISES PV T. LTD. 372 ITR 619 (BOM). 3.2 THE LD. AR CONTENDED THAT IF THE GROSS PROFIT AFTER TH E ADDITION IS ACCEPTED THE GROSS PROFIT WOULD SHOOT UP GIVING UNREALISTIC RESULTS. THEREFORE NO ADDITION SHOULD BE MADE. TO SUPPORT HIS CO NTENTIONS THE LD.AR PLACED RELIANCE ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ASSTT. COMMISSIONER OF INCOME TAX VS. SHRI R AMILA PRAVIN SHAH IN ITA NO. 5246/MUM/2013 FOR ASSESSMENT YEA R 2010-11 DECIDED ON 05-03-2015. THE LD. AR IN SUPPORT OF HIS CONTE NTIONS THAT NO ADDITION SHOULD BE MADE ON THE BASIS OF MERE SUSPICION DRAWS STRENGTH FROM THE FOLLOWING DECISIONS : I. UMACHARAN SHAW AND BROTHERS VS. COMMISSIONER OF INCOME TAX 37 ITR 271 (SC); II. MRS. NURMA RUKMANGAD BAWANE VS. ITO IN ITA NO. 637/PN/2010 FOR ASSESSMENT YEAR 1998-1999 DECIDED ON 20-06- 2012 (PUNE-TRIB.). 3.3 FURTHER THE LD. AR PLACED RELIANCE ON THE DECISION OF JO DHPUR BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. PERMANAND RE PORTED AS 107 TTJ 395 IN SUPPORT OF HIS CONTENTIONS THAT WHERE TH E ASSESSEE HAS DISCHARGED PRIMARY ONUS CAST ON HIM BY SHOWING PURCHASE IN THE BOOKS OF ACCOUNTS PAYMENT BY WAY OF ACCOUNT PAYEE CH EQUES AND 6 ITA NO. 802/PN/2015 A.Y. 2010-11 PRODUCING THE VOUCHERS OF SALE OF GOODS AND THE ASSESS ING OFFICER DID NOT MAKE REQUISITE INVESTIGATIONS AGAINST THE SAID SELLERS NO ADDITION CAN BE MADE. 3.4 THE LD. AR WHILE CONCLUDING HIS SUBMISSIONS STATED AT BA R THAT HE IS NOT PRESSING GROUND NO. 1 RAISE IN THE APPEAL. 4. ON THE OTHER HAND SHRI HINTENDRA NINAWE REPRESENTING THE DEPARTMENT STRONGLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE ADDITION MADE BY ASSESSING O FFICER ON ACCOUNT OF BOGUS PURCHASES. THE LD. DR SUBMITTED THAT T HE ASSESSEE IS NOT MAINTAINING STOCK REGISTER. THEREFORE PURCHASES OF MA TERIAL FROM VARIOUS PARTIES AS ALLEGED BY THE ASSESSEE COULD NOT BE VERIFIED. THE PRIMARY DUTY IS OF THE ASSESSEE TO PRODUCE THE PARTIES AND DISCHARGE THE ONUS OF PROVING GENUINENESS OF THE TRANSACTIONS. HOW EVER THE ASSESSEE HAS FAILED TO PRODUCE THE PARTIES BEFORE THE AS SESSING OFFICER. APART FROM NOTICE U/S. 133(6) SUMMONS U/S. 131 WERE GIVEN TO THE ASSESSEE TO PRODUCE THE PARTIES BEFORE THE ASSESSING O FFICER. HOWEVER NONE OF THE ALLEGED SUPPLIERS WERE PRODUCE BY THE ASSESS EE BEFORE THE ASSESSING OFFICER. THE LD. AR PRAYED FOR DISMISSING THE APPE AL OF THE ASSESSEE AND CONFIRMING THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS ON WHICH THE LD . AR OF THE ASSESSEE HAS PLACED RELIANCE AND DOCUMENTS FURNISHED IN T HE FORM OF PAPER BOOK BEFORE US. THE ASSESSING OFFICER HAD ISSUED LET TERS TO 7 ITA NO. 802/PN/2015 A.Y. 2010-11 VARIOUS PARTIES U/S. 133(6) OF THE ACT FROM WHOM THE ASSE SSEE HAD PURPORTEDLY MADE PURCHASES. THE COMMUNICATION SENT BY THE ASSESSING OFFICER WAS RETURNED BACK IN CASE OF SOME OF THE PARTIES WITH REMARKS UN-SERVED AND SOME OF THE PARTIES DID NOT RESP OND TO THE NOTICE/LETTER ISSUED BY THE ASSESSING OFFICER DESPITE SERVIC E. THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF THOSE SUPPLIERS TO WHOM NOTICE COULD NOT BE SERVED. THE LIST OF THE PARTIES IN RES PECT OF WHICH ADDITIONS HAVE BEEN CONFIRMED ARE AS UNDER : SR. NO. NAME OF THE PARTY REMARKS 1 RIDHI SALES CORPORATION MUMBAI NOT SERVE (POSTAL REMARKS - LEFT ADDRESS) 2 OM METALLOYS MUMBAI NO RESPONSE 3 RED ROSE STEEL P. LTD. NOT SERVED (POSTAL REMARKS - NOT KNOWN) 4 NIMESH STEEL P. LTD. MUMBAI NOT SERVED (POSTAL REMARKS - NOT KNOWN) 5 DONEAR TRADING P. LTD. NOT SERVED (POSTAL REMARKS - NOT KNOWN) 6 S.K. ENGINEERS MUMBAI (SUNDRY CREDITOR) NO RESPONSE 6. IT IS AN UNDISPUTED FACT THAT THE PAYMENTS TO AFOREM ENTIONED PARTIES/SUPPLIERS HAVE BEEN MADE BY THE ASSESSEE THROU GH ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAS ALSO FILED HIS BANK STA TEMENT TO SHOW THAT CHEQUES HAVE BEEN ENCASHED BY THE RESPECTIVE PA RTIES. THE ASSESSEE HAS FURNISHED COPIES OF INVOICES AND CONFIRMATIONS FROM SOME OF THE PARTIES. THE ASSESSEE HAS ALSO GIVEN THE DETAILS O F PAN OF THE SUPPLIERS. THE ASSESSING OFFICER REJECTED THE LEDGER EXTRA CTS FURNISHED BY THE ASSESSEE IN RESPECT OF RIDHI SALES CORPORATION AN D RED ROSE STEEL P. LTD. SUMMARILY ON THE GROUND THAT THE ADDRESS OF THE PARTIES 8 ITA NO. 802/PN/2015 A.Y. 2010-11 HAS NOT BEEN PRINTED BUT TYPED. APART FROM THAT NO OT HER REASON HAS BEEN GIVEN TO REJECT THE EVIDENCE FURNISHED BY THE ASSESSEE. THE ASSESSEE HAS FILED PAPER BOOK BEFORE US WHICH CONTAIN S TAX INVOICES OF RIDHI SALES CORPORATION DATED 13-10-2009 AT PA GE 30 AND RED ROSE STEEL P. LTD. DATED 17-06-2009 AT PAGE 46. A PERUSAL OF INVOICES OF BOTH THE SUPPLIERS SHOW THAT THE ADDRESS IS P RINTED AND BEARS THE SAME ADDRESS AS IS MENTIONED IN THE LEDGER EX TRACT WHICH HAVE BEEN REPRODUCED BY THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER. THE ASSESSEE HAS ALSO FILED COPY OF BANK STATEMENT WHICH SHOW THAT THE PAYMENTS HAVE BEEN MADE TO AFORESAID SUPPLIERS THROUGH BANKING CHANNEL. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO FAILED TO APPRECIATE THE FACT THAT THE ASSESSING OFFICER HAS REJECT ED THE DOCUMENTS FURNISHED BY THE ASSESSEE MERELY ON SUSPICION WITHOUT MAKING FURTHER INVESTIGATION OR ENQUIRY. THE ASSESSEE HA S DISCHARGED HIS ONUS BY FURNISHING NECESSARY DETAILS. EVEN THE COMMISS IONER OF INCOME TAX (APPEALS) HAS FAILED TO CONSIDER THE DOCUMENT S INVOICES LEDGER ACCOUNTS FURNISHED BY THE ASSESSEE. 7. IN SO FAR AS NON-APPEARANCE OF THE PARTIES BEFORE TH E ASSESSING OFFICER IS CONCERNED THE ASSESSEE CANNOT BE FAULTED IF THE PARTIES FAIL TO APPEAR EVEN AFTER SERVICE OF NOTICE/COMMUNICATION FROM ASS ESSING OFFICER. HOWEVER WHERE THE LETTER HAS NOT BEEN SERVED O N ACCOUNT OF PARTIES/SUPPLIERS SHIFTING OR LEAVING THE PREMISES ADDITION CA NNOT BE MADE IGNORING THE OTHER DOCUMENTS FURNISHED BY THE ASSE SSEE IN SUPPORT OF HIS CLAIM. 9 ITA NO. 802/PN/2015 A.Y. 2010-11 8. THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CA SE OF COMMISSIONER OF INCOME TAX VS. G.P. INTERNATIONAL LTD. (SUPRA ) UPHELD THE DECISION OF TRIBUNAL DELETING THE ADDITION WHERE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL. THE ASSESSING O FFICER HAD ISSUED ENQUIRY LETTER U/S. 133(6) OF THE ACT TO 25 PERSONS . SOME OF THE PERSONS CONFIRMED THE GENUINENESS OF TRANSACTION AND SO ME PERSONS DID NOT RESPOND. THE ASSESSING OFFICER MADE ADDITION BY TR EATING THE SOURCE OF SHARE CAPITAL OF THOSE PERSONS AS UNEXPLAINED. THE TRIBUNAL DELETED THE ADDITION AS THE ASSESSING OFFICER HAS NOT DOUB TED THE IDENTITY OF THE PERSONS FROM WHOM THE ASSESSEE HAS SHOW N RECEIPT OF APPLICATION MONEY. THE TRIBUNAL HELD THAT MERELY BECAUSE SOME OF THE PERSONS DID NOT RESPOND TO THE NOTICE ISSUED BY ASSES SING OFFICER U/S. 133(6) OF THE ACT IT CANNOT BE SAID THAT THE TRANSACTION WAS INGENUINE. THE HON'BLE HIGH COURT UPHELD THE FINDINGS OF TRIBUNAL. IN THE PRESENT CASE WE FIND THAT THE ASSESSING OFFICER HA S ACCEPTED THE CONTENTIONS OF THE ASSESSEE WITH RESPECT TO SOME OF THE SUPPLIERS EVEN THOUGH THEY HAD NOT RESPONDED TO THE N OTICE. WHEREAS IN CASE SOME OF THE SUPPLIERS TO WHOM EITHER THE NOTICES WERE NOT SERVED OR SERVED BUT DID NOT APPEAR THE ASSESSING OFFICE R DISBELIEVED THE TRANSACTIONS. NO COGENT REASON HAS BEEN GIVEN BY THE ASSESSING OFFICER FOR SELECTING SOME OF THE SUPPLIERS TO MAKE ADDITION. NO EFFORT WAS MADE TO SERVE FRESH NOTICES TO THE PARTIES. MERELY BECAUSE THE NOTICES WERE UNSERVED/NOT RESPONDED TO THE TRANSACTIO NS CANNOT BE TREATED AS BOGUS. THE ASSESSEE HAS PLACED ON RECORD OTHER DOCUMENTS SUCH AS INVOICES BANK STATEMENT LEDGER EXTRACTS ETC. IN SUPPORT OF HIS CONTENTIONS. BY IGNORING ALL SUCH DOCUMENTS ADDITIONS HAVE BEEN 10 ITA NO. 802/PN/2015 A.Y. 2010-11 MADE. THE ASSESSEE HAS DISCHARGED PRIMARY ONUS CAST ON HIM HENCE THE ADDITIONS MADE ARE NOT SUSTAINABLE. 9. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF COMMISSION ER OF INCOME TAX VS. NIKUNJ EXIMP ENTERPRISES PVT. LTD. (SUPRA) H AD UPHELD THE ORDER OF TRIBUNAL WHERE THE ADDITIONS WERE DELETED ON THE GROUND THAT MERELY BECAUSE SUPPLIERS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE COMMISSIONER OF INCOME TAX (APPEALS) IT CANNOT BE CONCLUDED THAT THE PURCHASES WERE NOT MADE BY THE ASSESSEE. 10. THE LD. AR HAS ALSO PLACED RELIANCE ON THE DECISION REND ERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ASSTT. CO MMISSIONER OF INCOME TAX VS. SHRI RAMILA PRAVIN SHAH (SUPRA) WHERE AFT ER THE ADDITION GROSS PROFIT RATIO OF THE ASSESSEE HAD BECOME AB NORMALLY HIGH. IN SUCH CIRCUMSTANCES THE COMMISSIONER OF INCOME TAX (A PPEALS) DELETED THE ADDITION THAT THE TRIBUNAL UPHELD THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION. IN THE PRESENT CASE WE FIND THAT THE ASSESSING OFFICER HA S NOT QUESTIONED THE GROSS PROFIT RATIO OF THE ASSESSEE. THE LD . AR HAS POINTED THAT AFTER THE ADDITION IN THE PRESENT CASE GROS S PROFIT RATIO IN THE IMPUGNED ASSESSMENT YEAR AS COMPARED TO PREVIOUS AND SUBSEQUENT ASSESSMENT YEAR WOULD CONSIDERABLY GO UP. THUS THE ADDITION WOULD RESULT INTO UNREALISTIC RESULT. WE FIND MERIT IN THE SUBMISSIONS OF THE LD. AR OF THE ASSESSEE. 11. THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE REJECTING THE SUBMISSIONS OF ASSESSEE HAS PLACED RELIANCE ON THE JUDGME NT OF HON'BLE 11 ITA NO. 802/PN/2015 A.Y. 2010-11 DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. LA MEDICA REPORTED AS 250 ITR 575 AND THE JUDGMENT OF HO N'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF SYSTEM INDIA COSTING VS. COMMISSIONER OF INCOME TAX REPORTED AS 229 ITR 636. WE FIND THAT THE RATIO LAID DOWN IN THE ABOVE JUDGMENTS W OULD NOT APPLY IN THE FACTS OF PRESENT CASE. IN THE CASE OF COMMISSIONER OF INCOME TAX VS. LA MEDICA (SUPRA) DETAILED ENQUIRIES WERE C ONDUCTED BY THE ASSESSING OFFICER. DURING ENQUIRY/INVESTIGATION IT WAS F OUND THAT ONE OF THE ALLEGED SUPPLIER WAS NOT IN EXISTENCE. THERE WA S SUFFICIENT MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE HAD M ADE BOGUS PURCHASES. IN THE CASE OF SYSTEM INDIA COSTING VS. COMMISSIONER OF INCOME TAX (SUPRA) THE HON'BLE HIGH COURT CONFIRMED THE ADDITION A S AN VERIFICATION IT WAS FOUND THAT PURCHASES WERE NOT MADE BY ASSESSEE AND THE ENTIRE TRANSACTION WAS SHAM. THE PAYMENTS MADE W ERE ACTUALLY RECEIVED BACK BY THE ASSESSEE. IN THE INSTANT CASE THE RE IS NO ALLEGATION BY DEPARTMENT THAT THE PAYMENTS MADE BY CHEQUE HAVE TRAVELLED BACK TO THE ASSESSEE. THUS BOTH JUDGMENTS ARE DISTINGUISHABLE ON FACTS AND WO ULD NOT SUPPORT THE CAUSE OF REVENUE. 12. THUS FOR THE REASONS MENTIONED ABOVE WE FIND MERIT IN THE GROUND NO. 2 RAISED IN THE APPEAL BY ASSESSEE. ACCORDIN GLY THE SAME IS ALLOWED. 12 ITA NO. 802/PN/2015 A.Y. 2010-11 13. THE LD. AR OF THE ASSESSEE HAS STATED AT THE BAR T HAT HE IS NOT PRESSING GROUND NO. 1 RAISED IN THE APPEAL. THEREFORE THE SAME IS DISMISSED AS NOT PRESSED. 14. GROUND NO. 3 IN GROUNDS OF APPEAL IS GENERAL IN NATURE AND HENCE REQUIRES NO ADJUDICATION. 15. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON MONDAY THE 17 TH DAY OF OCTOBER 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 17 TH OCTOBER 2016 RK *+ %-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-6 PUNE 4. THE PRINCIPAL CIT-5 PUNE 5. !*+ %% - - . ./0 / DR ITAT B BENCH PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER %5 0 / PRIVATE SECRETARY - / ITAT PUNE