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Income Tax Appellate Tribunal, “SMC”, BENCH
Before: SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM Shri
Revenue by Shri Kumar Padmapani Bora (DR) Assessee by Shri Vimal Punmiya (AR) Date of Hearing 02/12/2019 Date of Pronouncement 09/12/2019 आदेश / O R D E R PER: R.C. SHARMA, A.M. The appeal filed by the revenue and cross objection filed by the assessee are directed against the order of the ld. CIT(A)-58, Mumbai dated 10/08/2018 for the A.Y. 2009-10 in the matter of order passed U/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short, the Act).
CO 254/Mum/2019 ITO Vs Nitin Nandkishor Bangad 2. The grievance of the assessee and the revenue relate to the addition made by the A.O. and partly deleted by the ld. CIT(A) in respect of alleged bogus purchases. The A.O. has computed profit at 15.10% on the alleged bogus purchases and by the impugned order, the ld. CIT(A) confirmed the addition by estimating income @ 5.25% of alleged bogus purchases. The precise finding of the ld. CIT(A) is at page No. 2 to 7 of his appellate order.
It was argued by the ld AR of the assessee that the tax effect of the revenue appeal is less than Rs. 50.00 lacs, therefore, in terms of CBDT Circular No. 17 of 2019 dated 08.08.2019, the appeal of the revenue deserves to be dismissed.
With regard to merit of the addition sustained by the ld. CIT(A) to the extent of 5.25% on alleged bogus purchases, it was contention of the ld AR that the assessee has all the bills of purchases, all payments made through account payee cheque, supplier provided all identity to bank following KYC norms and all sales of assessee were accepted. He also contended that the assessee earned GP ratio as detailed hereunder for last three years:
Assessment Year %GP 2006-07 11.99 2007-08 16.57 2008-09 16.76 2009-10 14.23
CO 254/Mum/2019 ITO Vs Nitin Nandkishor Bangad 5. The ld AR has further argued that the assessee’s books of account were not rejected u/s 145(3) of the Act by the ld. CIT(A). In the immediately preceding year i.e. assessment year 2008-09, the assessee earned GP ratio of 16.76% on total turnover, while for the year under consideration GP ratio earned was 14.23%. End of justice will be met in this case if GP ratio of 5.25% on alleged bogus purchases is added to income of the assessee against which credit for the declared GP ratio should be granted.
On the other hand, the ld DR has relied on the order of the A.O.
We have considered the rival submissions and carefully gone through the orders of the authorities below and found from the record that the assessee is engaged in the business of trading in hardware, electric goods and tool kit. The assessee’s case was reopened on the information received from the Sales Tax Department regarding assessee obtained accommodation entries. After making enquiry, the A.O. made addition by estimating income at 15.10% on alleged bogus purchases.
By the impugned order, the ld. CIT(A) has dealt with the issue threadbare and after considering all the facts and circumstances of the case uphold addition to the extent of 5.25% of the alleged bogus purchases. Neither the ld. AR nor the ld DR could persuade us to deviate from the finding and conclusion of the ld. CIT(A), accordingly, we uphold
CO 254/Mum/2019 ITO Vs Nitin Nandkishor Bangad the order of the ld. CIT(A) for confirming the addition to the extent of 5.25% on alleged bogus purchases.
In the result, both i.e. appeal of the revenue and cross objection of the assessee are dismissed.
Order pronounced in the open court on 09th December, 2019.