ITO 27(2) (1), MUMBAI vs. M/S. PADMA INDUSTRIES, MUMBAI

The aforesaid appeals have been filed by the revenue against the separate impugned order of even date 17.10.2021, passed by National Faceless Appeal Centre, Delhi for the quantum appeal of

In both the appeals, common issue has been recorded on deletion of addition of Rs. 7,62,123/- as against addition of Rs. 8,70,998/- made by AO on account of bogus purchases for AY 2010-11 and deletion of addition of Rs. 36,73,687/- as against addition of Rs. 41,98,499/- on account of bogus purchases for AY 2011-12.

Ld. CIT(A) has sustained the addition only on account of gross profit @ 12.5% of the bogus purchases.

The facts in brief are that AO on the basis of information received from Investigation Wing that assessee has accommodation bill for purchase through third party declaration as hawala operator. At the threshold, the tax effect on the disputed issue in revenue’s appeal is much less than 50 lakhs as prescribed in the CBDT Circular No. 17 of 2019 dated 08.08.2019.

Here it is not a case where information has been received that the assessment has been made on the basis of information received

In any case, Ld. CIT(A) while applying GP rate on bogus purchase had followed various ITAT decision which now is full covered by the decision of Hon’ble Bombay High Court in the case of PCIT vs. Md. Haji Adam & Co. (ITA No. 1044/2016) order dated 11th February 2019, wherein it has been held that application of GP rate at 12.5%. Accordingly, the grounds raised by the revenue in both the appeals are dismissed.