SHRI CHANDRAKANT KHIMJI MOTA,MUMBAI vs. ITO 19(1)(3), MUMBAI

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ITA 3120/MUM/2019Status: DisposedITAT Mumbai17 September 2020AY 2011-123 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, considering the GP ratios of the assessee for three assessment years, restricted the addition on account of bogus purchases to 10.12%, which was the average GP ratio.

What were the facts?

The assessee, a wholesale trader of electronic items, allegedly obtained bogus purchase bills. The Assessing Officer made an addition of 12.5% of the alleged bogus purchases, which was confirmed by the CIT(A). The assessee's GP ratios for three assessment years were presented.

What were the issues?

The primary issue was the quantum of addition to be made on account of alleged bogus purchases, considering the assessee's GP ratios.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148

AI-generated summary — verify with the full judgment below

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

Before: SHRI VIKAS AWASTHYShri Chandrakant Khimji Mota,

For Respondent: Ms Kavita P. Kaushik

आदेश/ ORDER

1.

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals) – 5, Mumbai [in short ‘the CIT(A)’] dated 08/03/2019 for the assessment year 2011-12.

2.

A perusal of the assessment order shows that the assessee has failed to appear before the Assessing Officer despite notices and no return in response to notice under section 148 of the Income Tax Act, 1961 (in short ‘the Act’) was filed by the assessee. Consequently, the Assessing Officer was constrained to pass assessment order dated 27/12/2016 under section 144 r.w.s. 147 of the Act. The assessee is a wholesale trader of electronic items. The assessee allegedly obtained bogus purchase bills aggregating to Rs.57,84,080/- from hawala dealers declared by Sales Tax Department, Government of Maharashtra. The Assessing Officer made addition of 12.5% of total alleged bogus purchase i.e. 7,23,010. Aggrieved by addition made in the assessment order, the assessee filed appeal before CIT(A). The CIT(A) dismissed the appeal of assessee and confirmed the additions made by Assessing Officer in toto. The assessee is now in appeal before the Tribunal assailing the finding of CIT(A).

3.

Ms. Kavita P. Kaushik, representing the department vehemently supported the impugned order and prayed for dismissing the appeal of assessee.

4. Heard. Order of the authorities below and the material available on record examined. In the statement of facts filed alongwith grounds of appeal, the assessee has tabulated GP ratio during assessment years 2010-11, 2011-12 and 2012-13 as 8.69%, 9.43% and 12.24%, respectively. Taking into consideration entirety of facts, I am of considered view that the ends of justice would meet, if, addition on account of bogus purchases is restricted to 10.12% i.e. average G.P. ratio of the three assessment years i.e. 2010-11, 2011-12 and 2012-13. The appeal of the assessee is partly allowed in the terms aforesaid.

4.

In the result, appeal of the assessee is partly allowed.

Order pronounced on Thursday the 17th day of September, 2020.

Sd./- (VIKAS AWASTHY) �या�यक सद�य/JUDICIAL MEMBER मुंबई/ Mumbai, �दनांक/Dated: 17/09/2020 Vm, Sr. PS(O/S)

��त�ल�प अ�े�षतCopy of the Order forwarded to :

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