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Income Tax Appellate Tribunal, SMC Bench, Mumbai
Before: Shri R.C. Sharma
This is an appeal filed by the Revenue against the order of the CIT(A)- 58, Mumbai for A.Y. 2009-10, in the matter of order passed under Sections 143(3)/147 of the Income Tax Act, 1961 (hereinafter "the Act").
The grievance of the Revenue relates to restriction of addition in respect of bogus purchases to the extent of 12.5%.
I have gone through the orders of the authorities below and found that the AO has reopened the assessment by observing that the assessee has taken purchase bills without delivery of goods which amounts to bogus purchases. After considering the profit element, the AO made addition to the extent of 15.6% on alleged bogus purchases. By the impugned order the CIT(A) restricted the addition to the extent of 12.5% after observing as under: -
“10. All aspects in record is duly considered. The gross profit rate of assessee is 28.49%. The disputed transaction is reselling of sanitary ware and fittings. The Assessing Officer disallowed 25.6% (2 year M/s. NYJV Innovatives average) of the alleged amount of accommodation entries. On facts and circumstances of the case, and considering the strength of evidence brought to record (I note that Assessing Officer has not issued any notice to the alleged accommodation entry providers) decision is to taken in a balanced manner. I, after considering all aspects, hold that disallowance be kept at 12.5% of transactions covered by accommodation entries. The Assessing Officer is directed to modify assessment accordingly.”
It is clear that after considering the findings recorded by the AO and the documents submitted by the assessee, the CIT(A) has very reasonably restricted the addition to the extent of 12.5%. Nothing was brought before me by the learned D.R. so as to controvert the detailed finding recorded by the CIT(A) at para 6 to 10 of the appellate order.
In the result, the appeal filed by the Revenue is dismissed.