Principal Commissioner Of Income Tax-33 v. Synergy Infrastructures

Digitally signedby URMILAURMILAPRAMODPRAMODINGALEDate:INGALE2023.07.0610:39:02+0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 442 OF 2018 Principal Commissioner of Income Tax-33 ….. Appellant Vs. Synergy Infrastructures ….. Respondent Ms. Sushma Nagaraj a/w Ms. Kinjal Patel and Ms. Vibhuti Keny, forAppellant.Mr. Ajay R. Singh a/w Mr. Akshay Pawar, for Respondent. CORAM:K.R.SHRIRAM, J & FIRDOSH P. POONIWALLA, J. DATED : JUNE 28, 2023 P.C. 1.The following 4 questions of law are proposed: a) Whether on the facts & circumstances of thecase and in law the ITAT is justified inconfirming the action of the Ld. CIT(A) inrestricting the addition to 12.5% of the boguspurchase amount without appreciating the factthat assessee failed the substantiate the claim ofgenuineness of purchases? b) Whether in law and on the facts andcircumstances of the case, was the Tribunal notrequired to examine the facts of the case wherethe respondent was not in a position to bring theparties for cross examination, or to prove thatthe alleged materials were received by it ? c) Whether in law, and on the facts of the instantcase was the Tribunal failed to appreciate certainsignificant facts brought out by the lowerauthorities that the respondent firm had failed to produce the parties for cross examination andthere were no evidences of delivery of the‘purported goods’; thereby lending credibility tothe fact that these are accommodation bills wereonly to claim expenditure thereby reducing thetaxable income. d) Whether in law and in the facts of the instantcase, where the Appellate authorities aresatisfied that expenditure purported to havebeen paid for goods is not genuine, could not apart thereof be treated as deemed income as perSection 69C of the Act? 2.There are plethora of judgments to the extent of adhocdisallowances to be sustained with respect to the bogus purchases, whatshould be the percentage of the profit margin that has to be added toassessee’s income etc. Mr. Singh has tendered a compilation of 6judgments in which Courts have held that these are issues which wouldrequire evidence to be led. Whether the purchases were bogus or partiesfrom whom such purchases were made were bogus are essentiallyquestions of fact. We would also add that the Assessing Officer (‘AO’) in allfairness stated that the purchases by assessee, per se, are not the issue andthese purchases were not being treated as bogus. He also admits thatgoods have entered into assessee’s regular business. But AO says, assesseehas not been able to give any convincing or cogent explanation as to howthese goods happened to come in his possession and therefore, thepurchases are not being treated as bogus or sham rather the expenditureincurred on such purchases is treated as unexplained. 3.In our view, having considered this portion of the assessment order,the CIT(A) and ITAT are correct in coming to the conclusion that only theprofit element embedded in such purchases should be added to the incomeof assessee. The CIT(A) has added 12.5% which has been sustained byITAT. 4.In our view, no substantial question of law arises. 5.Appeal dismissed. (FIRDOSH P. POONIWALLA, J) (K.R.SHRIRAM, J)