DY CIT -CC-1(4), MUMBAI vs. SHRI KAMLESH MANOHAR KANINGO, MUMBAI

This appeal in A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-47, Mumbai in appeal No.CIT(A)-47/10101/2018-19 dated 11/02/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) rws 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/12/2018 by the ld. Dy. Commissioner of Income Tax, Central Circle-1(4), Mumbai (hereinafter referred to as ld. AO).

The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in restricting the profit percentage on account of bogus purchases made by the assessee from M/s. Unique Industrial Corporation @2% as against 5% adopted by the ld. AO in the facts and circumstances of the instant case.

We have heard the rival submissions and perused the materials available on record. We find that assessee is engaged in the business of ferrous and non-ferrous metals and other items in the name and proprietorship concern M/s. Trisons Impex. The return of income for A.Y.2011-12 was filed by the assessee on 30/09/2011 declaring total income of Rs.2,82,66,660/- which was later revised on 30/12/2011 declaring same total income. Pursuant to the search action carried out u/s.132(1) of the Act at Tirupati Group of Companies on 29/04/2011, the assessee’s case was covered under the provisions of Section 153C of the Act. The order u/s.143(3) r.w.s. 153C was passed in the hands of the assessee on 27/03/2014 determining total income at Rs.3,72,73,060/- after making various additions including addition of Rs.47,50,000/- on account of bogus purchases (GP addition @5% of bogus purchases). Thereafter, information was received from DGIT (Investigation), Mumbai and accordingly, the case of the assessee was reopened u/s.147 of the Act. The first re-assessment proceedings were completed on 17/03/2016 determning total income at Rs.3,91,50,140/- after making addition of Rs.18,73,081/- on account of bogus purchases being GP addition @3.04% of bogus purchases. Later, a fresh piece of information was received from DDIT (Investigation Unit)-64, Mumbai stating that assessee had taken certain accommodation entries from certain entities. The ld. AO in second re-assessment proceedings observed that assessee had made bogus purchases of Rs.48,36,968/- from M/s. Unique Industrial Corporation. The sales made out of such purchases were not disputed by the Revenue. The ld. AO estimated the profit percentage of such bogus purchases @5% and made an addition of Rs.2,41,848/-. The ld. CIT(A) by placing reliance on the order of this Tribunal in the case of the assessee in dated 28/02/2017 restricted the profit percentage @2% as against 5% made by the ld. AO. The relevant operative potion of the Tribunal order had been reproduced in the order of the ld. CIT(A) and hence, the same are not reiterated herein for the sake of brevity. Since, the ld. CIT(A) had followed principle of judicial discipline by following the Tribunal order and no appeal has been preferred by the assessee against the impugned order of the ld. CIT(A) before us, we hold that the order of the ld. CIT(A) does not warrant any interference. Accordingly, the grounds raised by the Revenue are dismissed.

In the result, appeal of the Revenue is dismissed. Order pronounced in open Court on 07/02/2022.