What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order which restricted the addition to 6% on bogus purchases. The Tribunal found no infirmity as the GP declared by the assessee on genuine purchases was 10.18%, and the CIT(A)'s estimation was reasonable.

The assessee obtained bogus purchase bills from hawala operators for Rs. 68,42,066/- and could not prove the genuineness of the parties or the goods. The Assessing Officer estimated Gross Profit at 12.5% on these bogus purchases, making an addition of Rs. 8,55,258/-.

What were the issues?

Whether the estimation of Gross Profit by the Assessing Officer on bogus purchases was fair and reasonable, and if the CIT(A) erred in restricting the addition.

ITO vs Shri Ashok C Chowdhary | ITAT Mumbai 2021

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI VIKAS AWASTHY

Hearing: 06/04/2021Pronounced: 02/07/2021

ITO-32(1)(2), Room No. 734, 7th Floor, Kautilya Bhavan, BKC, ...... अपीलाथ' /Appellant Bandra (E), Mumbai-400051. बनाम Vs. Ashok C. Chowdhary, Ground Floor, Chowdhary House, S.V. Road, Daulat Nagar, Borivali (E), Mumbai-400066. PAN: AATPC8483A ..... (ितवाद*/Respondent अपीलाथ' +ारा/ Appellant by : Ms. Smita Verma (ितवाद* +ारा/Respondent by : None सुनवाई क, ितिथ/ Date of hearing : 06/04/2021 घोषणा क, ितिथ/ Date of pronouncement : 02/07/2021 आदेश/ ORDER PER VIKAS AWASTHY, J.M: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-46, Mumbai [hereinafter referred to as ‘the CIT(A)’] dated 13.05.2019 for the Assessment Year (AY) 2010-11.

Ms. Smita Verma representing the Department submitted that the assessee is engaged in trading of building material. During the period relevant

आअसं. 5788/मुं/2019 (िन.व.2010-11) (A.Y.2010-11) to AY under appeal, the assessee has obtained bogus purchase bills aggregating to Rs. 68,42,066/- from hawala operators. The assessee could neither prove genuineness of the parties nor the goods purchased from them. The Assessing Officer (AO) after considering the documents furnished by the assessee estimated Gross Profit (GP) @ 12.5% on bogus purchases and thus, made addition of Rs. 8,55,258/-. In first appellate proceedings, the CIT(A) restricted the addition to 6%. The ld. DR pointed that GP declared by the assessee on genuine purchases is 10.18%, the estimation made by AO on bogus purchases at 12.5% was fair and reasonable. The ld. DR prayed for restoring the findings of AO.

Submissions made by ld. DR heard, orders of the authorities below examined. Undisputedly, the assessee failed to discharge his onus in proving genuineness of the dealers and alleged purchases made from them. Since, the AO accepted sales turnover declared by the assessee, the AO estimated GP on bogus purchases at 12.5%. A perusal of the impugned order shows that the assessee has already declared GP @ 8.15% on bogus purchase and the GP on genuine purchases at 10.18%. The GP estimated by the CIT(A) on bogus purchases at 6% is over and above the GP declared by the assessee. I find no infirmity in the impugned order, hence, the same is upheld and appeal of the Revenue is dismissed, sans merit. Order pronounced in the open court on Friday, the 02nd day of July, 2021.

Sd/- (VIKAS AWASTHY) �याियक सद�य / JUDICIAL MEMBER मुंबई/Mumbai, 1दनांक/Dated: 02/07/2021

आअसं. 5788/मुं/2019 (िन.व.2010-11) (A.Y.2010-11)

INCOME TAX OFFICER 32 (1) (2), MUMBAI vs. SHRI ASHOK C CHOWDHARY, MUMBAI

What did the Tribunal hold?

What were the facts?

What were the issues?

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