ORDER

PER C.N. PRASAD (JM)

1. These three appeals are filed by the assessee [for the A.Y. 2009-10 and A.Y. 2011-12] and revenue for the A.Y. 2011-12 against different orders of the Ld.CIT(A) dated 28.02.2019.

2. First we take up the cross appeals of the assessee and revenue for the A.Y. 2011-12.

ITA.No. 3345/MUM/2019 (A.Y. 2011-12) (Assessee Appeal)

3. Assessee raised following grounds in its appeal: -

“The Learned CIT(A) erred on facts, in law and under the circumstances in confirming the disallowance of Rs.41,94,244/-

being 10% of disputed purchase made during the year.

The Learned CIT(A) further erred in rejecting its claim of deduction of allowance u/s 35(2AB) of IT Act, 1961 of Rs.4,98,89,829/-.

The appellant respectfully submits that no disallowance is required to be made of Rs.41,94,244/- being purchase from disputed parties and also the expenses on Research & Development incurred as per Sec.35(2AB) of Rs.4,98,89,829/- should have been allowed.”

4. Ground No.1 of grounds of appeal is in respect of confirming the disallowance at 10% of disputed purchases made during the year. The Assessing Officer while completing the assessment noticed that the assessee is one of the beneficiaries of various dealers who provide only accommodation entries without any delivery of goods based on the information received from Sales Tax Department, Mumbai. In view of the above information a survey u/s. 133A was carried out on 22.11.2012 in the business premises of the assessee. The assessee declared ₹.9.27 crores as additional income on account of non-genuine purchases for Financial Years 2008-09 to 2011-12. For the Financial Year 2010-11 relevant to the A.Y. 2011-12 the declaration made by the assessee in the form of non-genuine purchases was at ₹.4,19,42,439/-. The Assessing Officer noticed that assessee company has not filed any revised return of income for the relevant assessment year disclosing the additional income declared during the survey proceedings. In the course of the assessment proceedings assessee was required to establish the genuineness of the purchases thereon which have been made from above parties as mentioned in the Assessment Order. Assessee vide letter dated 07.03.2014 furnished party wise details of purchases from various parties along with copies of their ledger in the Books of Accounts and submitted that the purchases made by the assessee are genuine. Not convinced with the submissions of the assessee the Assessing Officer disallowed purchases of ₹.4,92,14,139/- as agreed by the assessee in the survey proceedings as non-genuine. Before the Ld.CIT(A) the assessee furnished all the necessary information and documents regarding purchases made from various parties. On analyzing the information furnished by the assessee and after calling for remand report from the Assessing Officer the Ld.CIT(A) restricted the addition to 10% in view of the order of the Tribunal in assessee’s own case in ITA.No. 3768/Mum/2014 dated 11.12.2018 for A.Y. 2010-11. Against this order both assessee as well as revenue are in appeal.

5. Ld. Counsel for the assessee submits that entire details evidencing the purchases, consumption, sales and the closing stock was furnished before the lower authorities and those have not been doubted or disputed by the Assessing Officer as well as Ld.CIT(A). Ld. Counsel for the assessee submits that the addition has been made by the Assessing Officer based on some statements of third parties whose cross examination was not granted despite request and even the copies of their statements were not furnished. Ld. Counsel for the assessee submits that assessee has retracted its statement given during survey proceedings and therefore such retracted statement could not be the basis of addition.

6. Ld. Counsel for the assessee further referring to the remand report of the Assessing Officer, submits that no adverse inference is drawn by the Assessing Officer except stating that the information was not provided in the course of assessm