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Income Tax Appellate Tribunal, “SMC”, BENCH
Before: SHRI R.C.SHARMA
आदेश / O R D E R PER: R.C. SHARMA, A.M. This appeal by the revenue is directed against the order dated 27/07/2018 of ld. CIT(A)-45, Mumbai 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).
Rival contentions have been heard and record perused. In this appeal, the revenue is aggrieved by the action of the ld. CIT(A) for upholding the addition on account of purchases to the extent of 5.3%.
The facts in brief are that the assessee is engaged in the business of 2 ÏTA No. 6471/Mum/2018 Heena A Parekh Vs ITO trading of iron and steel. The A.O. got information regarding assessee being involved in purchase of goods without actual delivery of goods, accordingly, the assessment was reopened by issuing notice U/s 148 of the Act and thereafter the A.O. made addition of Rs. 18,35,824/- in respect of bogus purchases which is equivalent to 12.5% of alleged bogus purchases. By the impugned order, the ld. CIT(A) confirmed the addition to the extent of 5.3% after having the following observation:
“5.4 In the present case, the A.O. has noted in the assessment order in para 3 that the assessee has declared a gross profit of 7.2% in the P&L account and added 12.5% of the bogus purchases to the income declared. Respectfully following the order of the Hon’ble ITAT, Mumbai in the case of M/s Royal Enterprises, the assessing officer is directed to apply the differential percentage of 5.3% (12.5%-7.2%) on the bogus purchases of Rs. 1,46,86,682/-. In other words Rs. 7,78,394/- is confirmed out of the addition of “Rs. 18,35,824/-. Assessee gets part relief. The grounds of appeals are partly allowed.”
3. Against the above order of the ld. CIT(A), the revenue is in further appeal before the ITAT.
4. I have gone through the documents placed on record and found that the addition made by the A.O. was directed to be upheld at 5.3% by the ld. CIT(A) after considering the GP rate declared by the assessee at 7.2%. I found that the ld. CIT(A) has considered various judicial pronouncements and accordingly whatever G.P. has been declared by the assessee was directed to be reduced from the addition so made by 3 ÏTA No. 6471/Mum/2018 Heena A Parekh Vs ITO the A.O. Nothing was brought to our notice by the ld DR so as to persuade me to deviate from the finding of the ld. CIT(A) for upholding the addition of Rs. 5.3% of alleged bogus purchases. Accordingly, I uphold the order of the ld. CIT(A).
In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on 6th December, 2019.