SHAH & SHAH WRITING ENTERPRISES,MUMBAI vs. ITO, 30(3)(3), MUMBAI

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ITA 516/MUM/2019Status: DisposedITAT Mumbai04 February 2020AY 2010-113 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, considering the purchase bills, supplier confirmations, and bank statements, and noting that books of account were not rejected, decided to restrict the addition to 12.5% of the alleged bogus purchases.

What were the facts?

The assessee, engaged in trading ball pen refills, had its assessment reopened based on information regarding bogus purchases. The Assessing Officer added 100% of these alleged bogus purchases to the assessee's income.

What were the issues?

Whether the entire amount of alleged bogus purchases should be added to the assessee's income, or if a lower profit element should be considered.

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 Hiren Shah (AR)
For Respondent: Shri R.K. Gubgotra (DR)
Hearing: 03/02/2020Pronounced: 04/02/2020

Assessee by Shri Hiren Shah (AR) Revenue by Shri R.K. Gubgotra (DR) Date of Hearing 03/02/2020 Date of Pronouncement 04/02/2020 आदेश / O R D E R PER: R.C. SHARMA, A.M. This appeal by the assessee is directed against the order dated 16/11/2018 of ld. CIT(A)-41, Mumbai for the A.Y. 2010-11 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 that the assessee is engaged in trading of various types of imported and indigenous ball pen refills. On getting information regarding bogus purchase, the A.O. reopened the assessment and Shah & Shah Writing Enterprises Vs ITO added 100% of such alleged bogus purchases in assessee’s income.

By the impugned order, the ld. CIT(A) has confirmed the action of the A.O..

3.

I have heard the rival contentions and carefully gone through the orders of the authorities below. The ld. AR of the assessee has invited our attention to the documents filed before the A.O. in the form of purchase bills, confirmation of suppliers, bank statement indicating payment so made. It is also clear from the record that neither the A.O. nor the ld. CIT(A) has rejected books of account nor they have declined the claim of corresponding sales having been entered by the assessee, profit on which was also offered in the return of income. Keeping in view the facts and circumstances of the case and various judicial pronouncements on this issue, I am inclined to restrict the addition to the extent of 12.5% of the alleged bogus purchases.

4.

In the result, appeal of the assessee is allowed in part.

Order pronounced in the open court on 04th February, 2020.

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