M.R. Shah, J. - As common question of law and facts arise in both these appeals but with respect to different assessment years and are arising out of the common judgment and order passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'the ITAT') both the appeals are disposed of by this common order.
2. Tax Appeal No. 801 of 2013 is arising out of the impugned common judgment and order passed by the learned ITAT dated 4.1.2013 passed in ITA No.3147/Ahd/2008 (assessee appeal) and ITA No.3248/Ahd/2008 (revenue appeal) with respect to assessment year 2005-06, by which, the learned Tribunal has partly allowed the appeal preferred by the assessee and dismissed the appeal preferred by the revenue.
2.1 Tax Appeal No. 803 of 2013 preferred by the revenue is arising out of the impugned common judgment and order passed by the learned ITAT dated 4.1.2013 passed in ITA No.3273/Ahd/2009 (assessee appeal) and ITA No.3460/Ahd/2009 (revenue appeal) with respect to assessment year 2006-07, by which, the learned Tribunal has partly allowed the appeal preferred by the assessee and has dismissed the appeal preferred by the revenue.
TAX APPEAL NO.801 OF 2013
3. That the assessee filed return of income for the assessment year 2005-06 declaring total income of Rs.1,96,710/-. The case was selected for scrutiny, a notice under section 143(2) of the Income-tax Act, 1961 (hereinafter referred to as the "I.T. Act") was issued and served upon the assessee. Subsequently, a notice under section 142(1) of the I.T. Act along with questionnaire was issued and duly served upon the assessee. That during the course of assessment, it was found that the assessee made the bogus bills to the tune of Rs.39,75,571 from one M/s. R.R. Patel Trading Corporation and payment of Rs.2,74,000 made to M/s. R.R. Patel Trading Corporation by way of issuing cheque. Therefore, Assessing Officer treated an amount of Rs.42,45,526 as bogus purchases and the amount to be paid to M/s. R.R. Patel Trading Corporation as unexplained money and while passing the assessment order, the Assessing Officer made the addition of aforesaid amount of Rs.42,54,526/- to the total income of the assessee.
3.1 Feeling aggrieved and dissatisfied with the order of assessment making addition of Rs.42,45,526/-, the assessee preferred appeal before the learned CIT(A) and learned CIT(A) partly allowed the said appeal deleting the amount of Rs.27,80,068 from the addition of Rs.39,71,526 made by the Assessing Officer on account of purchases from M/s. R.R. Patel Trading Corporation and consequently confirmed the addition of Rs.11,91,458 being 30% purchases and total purchases from M/s. R.R. Patel Trading Corporation. The learned CIT(A) also deleted addition of Rs.2,74,000.
3.2 Feeling aggrieved and dissatisfied with the order passed by the learned CIT(A) both the assessee and the revenue preferred appeals before the learned CIT(A). The assessee preferred appeal against the order passed by the learned CIT(A) confirming the addition of Rs.11,91,458 and revenue preferred cross appeals against the order passed by the learned CIT(A) confirming the addition to the extent of Rs.11,91,458 only and deleting the rest of the addition made by the Assessing Officer. By impugned common judgment and order, the learned Tribunal has partly allowed the appeal preferred by the assessee and confirming the addition to the extent of 25% of the purchases from M/s. R.R. Patel Trading Corporation (in place of 30% of the addition confirmed by the CIT(A)) and consequently the learned Tribunal has partly allowed the appeal preferred by the assessee and dismissed the appeal preferred by the revenue.
3.3 Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned Tribunal in directing to make the addition to the extent of 20% of the purchases amount of the goods purchases by M/s. R.R. Patel Trading Corporation, revenue has preferred the present appeal with the following proposed substantial question of law.
"Whether on facts and in the circumstances of case, Tribunal was right in restricting addition on account of proven bogus purchases to be @20% without assigning any basis?"
TAX APPEAL NO.803 OF 2013
4. That the assessee filed return of income for the assessment year 2006-07 declaring total income of Rs.4,88,760. The case was selected for scrutiny, a notice under section 143(2) of the Income-tax Act, 1961 (hereinafter referred to as the "I.T. Act") was issued and served upon the assessee. Subsequently, a notice under section 142(1) of the I.T. Act along with questionnaire was issued and duly served upon the assessee. That during the course of assessment, it was found that the assessee made the bogus bills to the tune of Rs.39,75,571 from one M/s. R.R. Patel Trading Corporation and payment of Rs.2,74,000 made to M/s. R.R. Patel Trading Corporation by way of issuing cheque. Therefore, Assessing Officer treated an amount of Rs.9,83,580/- as bogus purchases and the amount to be paid to M/s. R.R. Patel Trading Corporation as unexplained money and while passing the assessment order, the Assessing Officer made the addition of aforesaid amount of Rs.9,83,580/- to the total income of the assessee.
4.1 Feeling aggrieved and dissatisfied with the order of assessment passed by the Assessing Officer, the assessee preferred appeal before the learned CIT(A) and the learned CIT(A) partly allowed the appeal preferred by the assessee confirming the addition of Rs.2,95,074/- (in place of Rs.9,83,580/- as made by the Assessing Officer) being 30% of the total purchases from M/s. R.R. Patel Trading Corporation.
4.2 Feeling aggrieved and dissatisfied with the order passed by the CIT(A), both the revenue as well as assessee preferred appeals before the learned ITAT being ITA No.3273/Ahd/2009 and ITA No.3460/Ahd/2009 respectively. Thus, the revenue preferred appeal against the order passed by the learned CIT(A) confirming the addition to the extent of 30% of the purchases from M/s. R.R. Patel Trading Corporation and assessee preferred appeal against the order passed by the learned CIT(A) in not deleting the entire addition made by the Assessing Officer.
4.3 By impugned common judgment and order, the learned Tribunal has partly allowed the appeal preferred by the assessee reducing the addition to the extent of 20% of the purchases from M/s. R.R. Patel Trading Corporation and has consequently dismissed the appeal preferred by the revenue.
4.4 Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned ITAT passed in ITA No.3273/Ahd/2009 and ITA No.3460/Ahd/2009, the revenue has preferred present appeal with the following proposed substantial question of law.
"Whether on facts and circumstances of the, Tribunal was right in restricting addition on account of proven bogus purchases to be @ 20% without assigning any basis?"
5. Heard Shri K.M. Parikh, learned advocate appearing on behalf of the revenue. It appears that on appreciation of evidence and in exercise of discretion vested in it, the learned ITAT has reduced the addition to the extent of 20% of the purchases booked in the name of R.R. Patel Trading Corporation. It is required to be noted that so far as the Assessing Officer is concerned, while passing the assessment order the Assessing Officer added the entire amount of the purchases booked in the name of R.R. Patel Trading Corporation and considered the same as the income of the assessee. However, in appeal, CIT(A) reduced the addition to the extent of 30% of the purchases booked in the name of R.R. Patel Trading Corporation observing that the Assessing Officer was not justified in making the addition of the total amount of the purchases booked. The CIT(A) also observed that as far as the goods shown by the R.R. Patel Trading Corporation were actually delivered to the reputed parties and there is complete quantitative tally between goods shown to be purchased from R.R. Patel Trading Corporation and correspondingly those in turn sold by the assessee. However, taking into account the difference in purchase rate in GP under the provisions of Section 40A(3) of the Act, the learned CIT(A) held that if 30% of the purchased is booked in the name of R.R. Patel Trading Corporation is added, it will be reasonable amount and, therefore, directed to add 30% of the purchases booked in the name of R.R. Patel Trading Corporation and confirmed the addition to the aforesaid extent and deleted rest of the addition. In appeal, the ITAT instead of 30% of the purchases booked in the name of R.R. Patel Trading Corporation has directed to make the addition to the extent of 20% of the purchases booked in the name of R.R. Patel Trading Corporation in the income of the assessee. The impugned order passed by the learned ITAT is on facts. Considering the facts and circumstances of the case, as such, no question of law much less substantial question of law arises in the present appeals. The learned advocate appearing on behalf of the appellant is not in a position to satisfy the Court how the suggested question of law can be said to be question of law.
6. It is required to be noted that in similar set of facts and circumstances of the case but with respect to one another assessee American Steel Corporation Pvt. Ltd and purchases booked in the name of R.R. Patel Trading Corporation, we have confirmed order passed by the learned ITAT making the addition to the extent of 20% (Tax Appeal Nos. 504 of 2012 and 508 of 2013)
7. Under the circumstances, we are of the opinion that as no substantial question of law arises in the present appeals, the present appeals deserve to be dismissed and are accordingly dismissed.