BABULAL PUKHARAJ SANGHVI,MUMBAI vs. ITO-19(1)(2), MUMBAI

This appeal in A.Y. 2009-10 arise out of the order by the order passed by the National Faceless Appeal Centre, New Delhi (NFAC) [the learned CIT (A)] in DIN & Order No. ITBA/NFAC/S/250/2022- 23/10044800362(1) dated 18th August, 2022, against the order of assessment passed under Section 143(3) read with section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘Act’) dated 17th March, 2015, by the

Identical issues are involved in both these appeals and hence, they are taken up together and disposed off by this common order for the sake of convenience.

The ground no.1 challenging the validity of reopening of assessment for the A.Y. 2009-10 was stated to be not pressed by the learned Authorised Representative at the time of hearing. The same is reckoned as a statement made from Bar and accordingly, ground no.1 raised for A.Y. 2009-10 is dismissed as not pressed.

The only identical issue involved in both these appeals is challenging the profit estimation made on account of ingenuine purchases.

We have heard the rival contentions and perused the materials available on record. The assessee is an individual and proprietor of Nandishwar Steel, engaged in the trading in ferrous and non-ferrous metals. It is not in dispute that assessee during the year had made certain purchases from certain parties, who were treated as tainted parties by the Sales Tax Department, Government of Maharashtra. In the opinion of the learned Assessing Officer, though assessee had furnished the relevant documents in the form of purchase invoices, bank statements evidencing payments by account payee cheques, stock registers, address of the suppliers, sales made out of purchases made from tainted parties, still the

Since, in the instant case sales made out of disputed purchases were not doubted by the Revenue, the only logical conclusion could be that assessee had made purchases in the grey market in order to have savings in indirect taxes and instantly, profit element thereon. Hence, it would be just and fair to bring to tax only the profit element embedded in the value of such disputed purchases. We find that this Tribunal has been consistently

In the result, both the appeals of the assessee are partly allowed.