NEHAL HASMUKHRAI GANDHI,MUMBAI vs. THE DY. CIT, CIRCLE-2, BHAVNAGAR

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ITA 2578/AHD/2017Status: DisposedITAT Ahmedabad25 March 2019AY 2009-103 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal accepted the assessee's request to estimate the profit at 5% on the alleged bogus purchases of Rs. 27,94,300/-. This estimation was considered to meet the ends of justice, considering the assessee's gross profit margins in previous years.

What were the facts?

The assessee's purchases from three parties were deemed bogus based on information from the VAT department. The Assessing Officer made an addition of Rs. 27,94,300/- to the returned income. The assessee's ground regarding the reopening of assessment was dismissed as not pressed.

What were the issues?

The primary issue was the addition made by the AO on account of alleged bogus purchases. The secondary issue was the quantum of addition to be made in light of the assessee's acceptance of a profit estimation.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD

For Appellant: DR यथ क ओर से /

आदेश/O R D E R

PER MAHAVIR PRASAD - JM:

This appeal has been preferred by the assessee against the order of Ld. CIT(A) Appeal No. CIT(A)-6/139/2016-17 dated 11.10.2017 arising from assessment order dated 29.12.2016 and following grounds have been taken:-

“1. Confirming the action of the AO in re-openingthe conclude assessment for the reasons as recorded and as supplied in due course of time thereafter.

ITA No.2578/Ahd/2017 [Nehal Hasmukhrai Gandhi vs. DC IT] A.Y. 2009-10 - 2 -

2.

Confirming the action of the AO in making an aggregate addition of Rs. 27,94,300/- to the returned income, in respect of the purchases made from three specified parties. The Appellant craves leave to add, amend, delete or alter one or more grounds of appeal.”

2.

So far Ground No. 1 is concerned assessee does not want to place the same therefore Ground No. 1 is dismissed as not pressed.

3.

In this case information was received from the VAT department Mumbai of bogus supplier and only provider. During the course of action statement of the key persons of such concern were recorded in the list they were categorically accepted they are mainly providing bills and not supply any material. The list of the beneficiaries and such entry providers was circulated. After going through the list of beneficiaries it is seen that name of the assessee was also appear in the list. Therefore, on the basis of information assessing officer issued notice to the assessee and it is found that assessee has claimed to made the purchase from three bogus bulls to the tune of Rs. 33,39,507/- which is already deducted in their statement that they are mainly billers they are not supply any material. From the assessment record gross profit of the assessee in the assessment year of 2007-08 was 4.62% in assessment year 2008- 09 it was 6.16% in assessment year 2009-10 was 4.74% and before us assessment year is 2009-10.

4.

At the outset, Ld. AR made a request that if an addition is made on alleged bogus purchased of Rs. 27,94,300/- and profit of 5% is determined at our end he will accept the same as we can see in the assessment year 2009-10 gross profit was 4.74% in our considered opinion that if income of the assessee is estimated @ 5% of amount of Rs. 27,94,300/- same would meet the end of the

ITA No.2578/Ahd/2017 [Nehal Hasmukhrai Gandhi vs. DC IT] A.Y. 2009-10 - 3 -

justice. Therefore, appeal of the assessee’s allowed as per the terms stated above.

5.

In the result, appeal of the assessee is allowed.

This Order pronounced in Open Court on 25/03/2019

Sd/- Sd/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 25/03/2019 True Copy TANMAY आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file.

By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

1.Date of dictation on 06.03.2019 2.Date on which the typed draft is placed before the Dictating Member 06.03.2019 3.Date on which the approved draft comes to the Sr.P.S./P.S. 25.03.2019 4.Date on which the fair order is placed before the Dictating Member for pronouncement 25.o3.2019 5.Date on which the fair order comes back to the Sr.P.S./P.S 25.03.2019 6.Date on which the file goes to the Bench Clerk 29.03.2019 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Despatch of the Order………

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