GOLD ANCHER EXIM PRIVATE LIMIED ,MUMBAI vs. INCOME TAX OFFICER WARD 12(2)(3), MUMBAI
What did the Tribunal hold?
The Tribunal held that in earlier assessment years, Co-ordinate Benches had consistently taken a view by restricting the element of profit to 1% on ingenuine purchases. The Tribunal found parity of facts in the present appeals and saw no reason to differ from the findings of the Co-ordinate Benches. Therefore, the Tribunal directed the AO to restrict the addition to 1% of the value of ingenuine purchases. The ratio decidendi is that when a consistent view has been taken by co-ordinate benches on similar facts in earlier years, the same should be followed to maintain consistency in judicial pronouncements. The operative direction is to restrict the addition to 1%, implying a deletion of the excess addition made by the AO.
What were the facts?
The assessee, Gold Andher Exim Pvt. Ltd., has filed two appeals (ITA No. 2807/Mum/2025 for AY 2011-12 and ITA No. 2808/Mum/2025 for AY 2012-13) against separate orders dated 01/09/2023 passed by the NFAC, Delhi (the learned CIT(A)). The appeals involve identical grievances based on identical facts. The core issue in both appeals pertains to the assumption of gross profit at 12.5% on alleged bogus purchases by the Assessing Officer (AO). The assessee is represented by Ms. Ritu Punjabi, AR, and the revenue by Shri Swapnil Choudhary, Sr. DR. The appeals were heard together and disposed of by a common order.
What were the issues?
1. Whether the Tribunal had to decide on the assumption of gross profit at 12.5% on alleged bogus purchases by the Assessing Officer for Assessment Years 2011-12 and 2012-13. Assessee's Contention: The assessee brought to the notice that a Co-ordinate Bench in the assessee's own case for earlier assessment years (ITA No. 1783/Mum/2020 and others) had restricted the profit element to 1% on ingenuine purchases. The assessee relied on the findings of the Co-ordinate Bench in ITA No. 1783/Mum/2020, which in turn followed the decision in Max Realties LLP vs. DCIT. Revenue's Contention: The judgment does not record any specific contentions made by the revenue. However, the revenue's action of assuming gross profit at 12.5% on alleged bogus purchases was the basis of the dispute.
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HONBLE & SHRI NARENDRA KUMAR BILLAIYA, HONBLE
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
OR DER \nPER NARENDRA KUMAR BILLAIYA, AM:\nI.T.A. No. 2807/Mum/2025 & two separate appeals by the assessee preferred against two\nseparate orders dt. 01/09/2023 by NFAC, Delhi [hereinafter “the\nld. CIT(A)"] pertaining to AYs 2011-12 and 2012-13 respectively.\n2.\nSince identical grievance is involved based on identical facts, both\nthe appeals were heard together and are disposed off by this common\norder for the sake of convenience and brevity.\n\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\nI.T.A. No. 2807/Mum/2025\nΙ.Τ.Α. No. 2808/Mum/2025\n2\n3. The common ground involved in both the appeals relate to the\nassumption of gross profit @ 12.5% on the alleged bogus purchases.\n4.\nAt the very outset, it has been brought to our notice that the Co-\nordinate Bench in the assessee's own case in ITA No. 1783/Mum/2020\nvide order dated 08/10/2021 and in ITA No. 1784, 1785 & 1786/Mum/2020\nfor AY 2009-10, 2010-11 & 2011-12 vide order dated 25/11/2021 has\nrestricted the profit element at 1%. The relevant findings of the Co-\nordinate Bench in ITA No. 1783/Mum/2020, read as under:-\n“3.
We find that there is no dispute that assessee is trading in fabrics and that the\npurchases made from the aforesaid five suppliers were in respect of purchases of\nfabrics. It is not in dispute that the sales made out of purchases made from aforesaid\nfive suppliers were not doubted by the Revenue. It is not in dispute that purchase of\nfabrics does not get eligible for levy of VAT. Hence, the profit element to be estimated\non the value of ingenuine purchases should certainly exclude the VAT portion in the\ninstant case and only incidental benefit that assessee derives by making purchases\nout of cash in the grey market should be ultimately brought to tax. We find that under\nsimilar circumstances, the Co-ordinate Bench of this Tribunal in the case of Max\nRealties LLP vs. DCIT in and ITA No. 161/Mum/2020\nfor A.Y.2010-11 dated 16/08/2021 had estimated the incidental profit element at 1%.\nRespectfully following the said decision, we direct the Id. AO to add only 1% of value\nof ingenuine purchases of Rs.5,67,01,954/- (i.e. Rs.5,67,019/-) and delete the\nremaining portion. Accordingly, the ground raised
by the assessee is partly allowed.”\n5.\nThe Co-ordinate Bench in AY 2009-10, 2010-11 & 2013
14. (supra)\nhas followed the aforementioned findings of the Co-ordinate Bench in\nAY 2008-09.\n6. We are of the considered view that in earlier four assessment\nyears, the Co-ordinate Benches have taken a consistent view by\nrestricting the element of profit to 1%. Therefore, finding parity of facts,\nwe do not find any reason to differ with the findings of the Co-ordinate\n\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\nI.T.A. No. 2807/Mum/2025\nΙ.Τ.Α. No. 2808/Mum/2025\n3\nBenches (supra). We accordingly the direct the AO to restrict the\naddition to 1%.\n7.\nIn the result, both the appeals of the assessee are partly allowed.\nOrder pronounced in the Court on 19th June, 2025 at Mumbai.\nSd/-\n(SAKTIJIT DEY)\nVICE PRESIDENT\nMumbai, Dated 19/06/2025\n*SC SPPS\nSd/-\n(NARENDRA KUMAR BILLAIYA)\nACCOUNTANT MEMBER\nआदेश की प्रतिलिपि अग्रेषित/
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