KALPESH RAMESHBHAI VYAS,MUMBAI vs. ITO WARD 2(1), THANE
Before: SHRI NARENDER KUMAR CHOUDHRYAssessment Year: 2011-12
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 27.09.2024, impugned herein, passed by the Ld.
Addl/Joint Commissioner of Income Tax (Appeals) (in short “Ld.
Addl./Joint Commissioner”) under section 250 of the Income Tax
Act, 1961 (in short ‘the Act’) for the A.Y. 2011-12. Shri Kalpesh Rameshbhai Vyas
2
2. In the instant case, information was received in the office of DGIT (Investigation), Mumbai from the Sales Tax Department,
Maharashtra regarding suspicious parties, who were providing accommodation entries without doing any actual business and the Assessee has been shown to have made purchases from two entities namely M/s. Rumit Enterprises and M/s. Harish Metal to the tune of Rs.29,68,483/- & Rs.60,72,518/- respectively. Though the Assessee in order to substantiate the aforesaid purchases filed various documents, however, the Assessing Officer (in short “the AO”) considering the enquiries conducted by the Sales Tax
Department and subsequently by the office of DGIT, Mumbai and the fact that the Assessee failed to produce the purchase parties, ultimately computed the GP rate amounting to Rs.11,42,625/- being 12.5% of Rs.90,41,001/- {Rs.29,68,483/- & Rs.60,72,518/-
} and consequently added the same in the income of the Assessee.
The Assessee, being aggrieved, challenged the said addition on merit as well as on the estimation of GP before the Ld. Commissioner, however, could not get succeeded and therefore the Assessee is in appeal before this Court.
Heard the parties and perused the material available on record. The Assessee, while relying on judgments passed by the Hon’ble Co-ordinate Benches of the Tribunal including in the case of Rameshkumar Sanghvi vs. ITO-19(3)(1) ITA No.4143/M/2023 & Shri Kalpesh Rameshbhai Vyas
3
ors. decided on 29.04.2024 and Assessee’s own case in ITA
No.4392/M/2023 for A.Y. 2010-11 decided on 06.05.2024 has claimed that the GP rate as shown on the genuine purchases, can be restricted to the bogus purchases as well.
On the contrary, the Ld. D.R. refuted the claim of the Assessee.
Having heard the parties and given thoughtful considerations to the peculiar facts and circumstances of the case and orders passed by the Authorities below. Admittedly various Courts in the cases pertaining to the business of ferrous and non-ferrous metal trading, restricted the Gross profit rate ranging from 5% to 12.5% embedded therein under peculiar facts and circumstances of the cases and therefore in the considered opinion of this Court for the just decision of the case and substantial justice, sustaining the addition @ 5% of the alleged bogus purchase over and above already shown by the Assessee, would be fair and reasonable and therefore accordingly conveyed this inclination to the parties. Thus, Ms. Mona Solanki, Ld. A.R. for the assessee has candidly admitted that addition @ 5% of the bogus purchases may be upheld. Resultantly the addition sustained by the Ld. Addl/ Commissioner @ 12.5% of the alleged bogus purchases is restricted to the extent of 5% over and above the GP rate already shown. Shri Kalpesh Rameshbhai Vyas
In the result, the appeal filed by the Assessee is partly allowed.
Order pronounced in the open court on 16.01.2025. (NARENDER KUMAR CHOUDHRY)
JUDICIAL MEMBER
* Kishore, Sr. P.S.
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The DR Concerned Bench
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By Order
Dy/Asstt.