SURESHKUMAR N. KADRI,MUMBAI vs. INCOME TAX OFFICER WARD 28(3)(3), MUMBAI

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ITA 4804/MUM/2018Status: DisposedITAT Mumbai30 August 2019AY 2009-104 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that 100% disallowance for bogus purchases is not justified when sales are not doubted. The addition was restricted to 12.5% of the bogus purchase amount.

What were the facts?

The assessee declared income and the case was reopened based on information about bogus purchases. The Assessing Officer (AO) made a 100% addition for these purchases, which was confirmed by the CIT(A).

What were the issues?

Whether 100% disallowance of purchases is justified when the genuineness of purchases is doubted but sales are not. The extent to which disallowance can be made in such cases.

Which sections of the Income-tax Act were involved?

Section 69C

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Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI SHAMIM YAHYA, AM & SHRI AMARJIT SINGH, JM

For Appellant: Shri Bhadresh K. Doshi
Hearing: 28/08/2019Pronounced: 30/08/2019

O R D E R

PER AMARJIT SINGH, JM:

1.

The assessee has filed the present appeal against the order dated 04.05.2018 passed by the Commissioner of Income Tax (Appeals) -26, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2009- 10.

2.

The assessee has raised the following grounds: - “

1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the addition of Rs.10,43,451/- made by the AO u/s 69C of the Act by treating the purchase as not genuine. A.Y.2009-10

2. The appellant craves leave to add, amend, vary and / or withdraw any or all the above grounds of appeal.”

3. The brief facts of the case are that the assessee filed his return of income on 29.09.2009 declaring total income to the tune of Rs.7,78,736/- for the A.Y. 2009-10. The return was processed u/s 143(1) of the I.T. Act, 1961.The case of the assessee was reopened on the basis of the information received from the DGIT (Inv.), Mumbai in which it was conveyed that the assessee has taken the accommodation entries of bogus purchase in sum of Rs.10,43,561/- from the following four parties.

Name of the Party Amount M/s. Romex Metal Tubes Pvt. Ltd. 1,74,198/- G. K. Industrial Corporation 5,31,567/- Nimesh Steels Pvt. Ltd 1,18,898/- Montex Metal & Steel Pvt. Ltd. 2,18,898/- 4. After the reply of the assessee, the AO raised the 100% in view of the provisions u/s 69C of the Act. The total income of the assessee was assessed to the tune of Rs.19,00,880/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the addition, therefore, the assessee has filed the present appeal before us.

ISSUE No. 1

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