ITO 33(1) (1), MUMBAI vs. SMT TARUNA R. DALAL, MUMBAI

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ITA 84/MUM/2022Status: DisposedITAT Mumbai31 May 2022AY 2009-105 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the CIT(A)'s decision to retain only 15% of the bogus purchases as an addition, following the principle of consistency with the assessee's own cases for earlier years which were accepted by the Revenue.

What were the facts?

The assessee claimed purchases of ₹26,82,617/- from a party that was later found to be non-existent, providing only invoices. The Assessing Officer added 100% of these purchases to the assessee's income.

What were the issues?

Whether the addition for bogus purchases should be 100% or a lower estimated percentage, and the applicability of the rule of consistency based on prior year's orders accepted by the Revenue.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(3),Section 147,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Respondent: Shri Himanshu Sharma, AR
Hearing: 26.05.2022Pronounced: 31.05.2022
1.

This appeal is filed by the Income Tax Officer-33(1)(1), Mumbai against the order dated 20th November, 2021 passed by National Faceless Appeal Centre, Delhi [the learned CIT(A)] for Assessment Year 2009-10 raising the following ground of appeal:-

“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that estimation of GP rate of 15% instead of 100% of bogus purchases, being an addition of Rs. 26,82,617/- is fair and justified and failing to appreciate that the assessee had failed to establish the genuineness of the alleged party from whom purchases was claimed to have been made during the year?

3.

Whether on the facts and circumstances of the case and in law, the Ld. CITA) erred in holding that estimation of GP rate of 15% instead of 100% of bogus purchases, being an addition of Rs. 26,82,617/-, is fair and justified and failing to appreciate that the Sale Tax Department, Mumbai during their course of investigation found the alleged parties to be provider of accommodation, bogus purchase bills and not a genuine business entities?"

4. The appellant craves leave to amend or to alter any ground or add a new ground which may be necessary.”

2.

The brief fact of the case shows that assessee is an individual engaged in the business of manufacturing of Corrugated Box and sheet. She filed her return of income on 31st March, 2008, at a total income of ₹8,22,827/-. This return was processed under section 143(1) of the Act. Subsequently, information received from DGIT Investigation, Mumbai vide letter dated 26th December, 2013, relating to bogus purchase made by the assessee from certain parties who did not supply the goods but

3. Aggrieved with the order of the learned Assessing Officer, assessee preferred the appeal before the learned CIT(A). The learned CIT(A) restricted the addition to the extent of 15% of total purchases as in assessee’s own case for Assessment Years 2010-11 and 2011-12 on similar facts and circumstances, the addition to the extent of 15% was retained. Therefore, the learned CIT(A) confirmed the addition to the extent of 15% of bogus purchases and deleted the balance disallowance. The learned Assessing

4.

The learned Departmental Representative vehemently supported the order of the learned Assessing Officer.

5.

Despite notice to the assessee, none appeared on behalf the assessee and therefore, the appeal of the learned Assessing Officer is decided on the merits of the case as per information available on record.

6.

We have carefully considered the submission made by the learned Departmental Representative as well as the order of the lower authorities. In the present case, the assessee is found to have purchased bogus bills of purchase of material in the name of proprietary concern namely Productive and Packaging Industry from one M/s One Paper and Iron traders amounting to ₹26,82,617/-. As the party could not be produced before the learned Assessing Officer, the learned Assessing Officer made an addition to the extent of 100% of such purchases. The learned CIT(A) following his own order in assessee’s own case for earlier two years retained such addition only to the extent of 15% of bogus purchases. The learned Departmental Representative could not controvert that the orders of the learned CIT(A) in assessee’s own case for earlier years were on different facts or they have not been accepted by the Revenue. Therefore, we find that when on identical facts and circumstances in assessee’s own case the addition retained to the extent of 15% of bogus purchases have been accepted by the Revenue, without any

7.

In the result, the appeal filed by the learned Assessing Officer is dismissed.

Order pronounced in the open court on 31.05.2022.

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