INCOME TAX OFFICER 30(1)(2), MUMBAI vs. BIPIN UMAKANT JOSHI, MUMBAI

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ITA 956/MUM/2019Status: DisposedITAT Mumbai07 February 2020AY 2010-113 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 upheld the CIT(A)'s decision to restrict additions to 2% of alleged bogus purchases. This was based on the assessee's disclosed Gross Profit (GP) and a consistent decision in the assessee's own case for the preceding assessment year.

What were the facts?

The Revenue appealed against the CIT(A)'s order restricting additions for bogus purchases to 2%. The assessee, a dealer in tools alloy steel, had information from the Sales Tax Department regarding bogus purchase bills, leading to reassessment.

What were the issues?

The primary issue was whether the addition for bogus purchases should be the full amount or a reduced percentage, considering the assessee's GP and prior tribunal rulings.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH

Before: SHRI R.C.SHARMA

For Appellant: Shri Lajari Oswal (AR)
For Respondent: Shri R.K. Gubgotra (JCIT-DR), Shri Lajari Oswal (AR)
Hearing: 06/02/2020Pronounced: 07/02/2020

आदेश / O R D E R PER: R.C. SHARMA, A.M. These are the appeals filed by the revenue against the common order of the ld. CIT(A)-41, Mumbai dated 30/11/2018 for the A.Y. 2010-11 and 2011-12 in the matter of order passed U/s 143(3) r.w.s.

147 of the Income Tax Act, 1961 (in short, the Act).

2.

Rival contentions have been heard and record perused. Facts in brief are the assessee is a dealer of tools alloys steel. On getting information from Sales Tax Department regarding the assessee taking bogus purchase bills, the A.O. reopened the assessment and added ld. CIT(A) has restricted the addition to the extent of 2% after following the order of the Tribunal in assessee’s own case for the A.Y. 2009-10.

3.

From the record I found that the Tribunal have decided the appeal of the assessee for the immediate preceding year i.e. A.Y. 2009-10 vide order dated 19/02/2018 wherein addition on account of bogus purchases were restricted to the extent of 2% after having the following observation:

1.

“7.1 I have considered rival contentions and carefully gone through the orders of the authorities below and found from record that assessee is a dealer in tools alloy steel. During the year under consideration, on the basis of information from Sales Tax Department, AO has made addition in respect of suspicion suppliers, which was restricted by CIT(A) to the extent of 30%. Assessee had shown GP of 5.66% during the year under consideration. Before the AO, assessee has filed quantitative details of purchases and sales, confirmation of the suppliers. Keeping in view totality of facts and circumstances of the case, vis a vis, GP disclosed by assessee, I do not find any merit for further addition of 30%. I direct to restrict addition to the extent of 2% of the bogus purchases.”

4.

I have gone through the order of the Tribunal, the facts and circumstances of the case are same as are prevailing during both the years under consideration. Respectfully following the order of the Tribunal dated 19/02/2018, I do not find any infirmity in the order of bogus purchases when the assessee had shown G.P. of 6.28% in the A.Y. 2010-11 and G.P. at 6.84% in the A.Y. 2011-12.

5.

Since the facts and circumstances of both the years under consideration are pari materia, therefore, by following the reasoning given in the appeal for the A.Y. 2010-11, I also uphold the action of the ld. CIT(A) for the A.Y. 2011-12.

6.

In the result, both the appeals of the revenue are dismissed.

Order pronounced in the open court on 07th February, 2020.

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