GOLD ANCHER EXIM PRIVATE LIMIED ,MUMBAI vs. INCOME TAX OFFICER WARD 12(2)(3), MUMBAI

The common ground involved in both the appeals relate to the assumption of gross profit @ 12.5% on the alleged bogus purchases. 4. At the very outset, it has been brought to our notice that the Co- ordinate Bench in the assessee’s own case in ITA No. 1783/Mum/2020 vide order dated 08/10/2021 and in ITA No. 1784, 1785 & 1786/Mum/2020 for AY 2009-10, 2010-11 & 2011-12 vide order dated 25/11/2021 has restricted the profit element at 1%. The relevant findings of the Co- ordinate Bench in ITA No. 1783/Mum/2020, read as under:- “3.4. We find that there is no dispute that assessee is trading in fabrics and that the purchases made from the aforesaid five suppliers were in respect of purchases of fabrics. It is not in dispute that the sales made out of purchases made from aforesaid five suppliers were not doubted by the Revenue. It is not in dispute that purchase of fabrics does not get eligible for levy of VAT. Hence, the profit element to be estimated on the value of ingenuine purchases should certainly exclude the VAT portion in the instant case and only incidental benefit that assessee derives by making purchases out of cash in the grey market should be ultimately brought to tax. We find that under similar circumstances, the Co-ordinate Bench of this Tribunal in the case of Max Realties LLP vs. DCIT in ITA No.7544/Mum/2019 and ITA No. 161/Mum/2020 for A.Y.2010-11 dated 16/08/2021 had estimated the incidental profit element at 1%. Respectfully following the said decision, we direct the Id. AO to add only 1% of value of ingenuine purchases of Rs.5,67,01,954/- (i.e. Rs.5,67,019/-) and delete the remaining portion. Accordingly, the ground raised by the assessee is partly allowed.”

The Co-ordinate Bench in AY 2009-10, 2010-11 & 2013-14 (supra) has followed the aforementioned findings of the Co-ordinate Bench in AY 2008-09. 6. We are of the considered view that in earlier four assessment years, the Co-ordinate Benches have taken a consistent view by restricting the element of profit to 1%. Therefore, finding parity of facts, we do not find any reason to differ with the findings of the Co-ordinate

अपीलाथ / The Appellant 2.  थ / The Respondent 3. संबंिधतआयकरआयु! / Concerned Pr. CIT 4. आयकरआयु! ) अपील ( / The CIT(A)- 5. िवभागीय ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file.