PRATAP U PUROHIT,MUMBAI vs. ACIT 32(2), MUMBAI

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ITA 5518/MUM/2016Status: DisposedITAT Mumbai28 August 2019AY 2007-084 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, following its own precedent for a prior assessment year with similar facts, directed the AO to restrict the addition on account of alleged bogus purchases to 2%. This was based on the assessee's demonstrated utilization of goods and a healthy gross profit rate during the year under consideration.

What were the facts?

The assessee's appeal concerned an addition to income based on alleged bogus purchases. The Assessing Officer (AO) added 12.5% of these purchases, which was upheld by the CIT(A). The assessee argued that in a previous assessment year with similar facts, the Tribunal had restricted such additions to 2%.

What were the issues?

Whether the addition on account of alleged bogus purchases should be restricted, and if so, to what extent, considering the assessee's own case for a prior year.

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, “H”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH, JM Shri Pratap V. Purohit Dr. C.H.Street, Marine Lines

For Appellant: Shri Naveen Kumar Mishra
For Respondent: Shri Manoj Kumar Singh
Hearing: 26/08/2019Pronounced: 28/08/2019

आदेश / O R D E R PER R.C.SHARMA (A.M):

1.

This is an appeal filed by the assessee against the order of CIT(A)- 44, Mumbai dated 09/08/2016 for the A.Y.2007-08 in the matter of order passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961.

2.

In this appeal, assessee is aggrieved for upholding the addition to the extent of 12.5% of alleged bogus purchases which amounts to Rs.13,75,308. At the outset, the ld. AR placed on record the order of the Tribunal in assessee’s own case for the A.Y.2011-12, wherein under similar facts and circumstances, addition on account of similar bogus purchases was upheld to the extent of 2%.

3.

Rival contentions have been heard and record perused. In this case, the AO found bogus purchases during the course of re-assessment proceedings. He added 12.5% of alleged purchases in assessee’s income which was confirmed by the ld. CIT(A). We found that under similar facts and circumstances, the Tribunal in assessee’s own case for the A.Y. 2011- 12 dated 04/11/2016 had restricted addition on account of bogus purchases to the extent of 2%. The precise observation of the Tribunal is as under:-

“6. We have considered rival contentions and found that for the impugned assessment year total purchases from alleged MVAT parties were to the tune of Rs. 2,33,36,015/-. Pursuant to survey action on 27/02/2011, while recording the statement the assessee himself has offered these purchases as his income for A.Y. 2012-13, as he was unable to explain the same at the time of survey. The authorized officer at that time aggregated the purchases made from alleged MVAT parties and took the disclosure of Rs. 20Crs in the AY 2012-13. The assessee has also offered the said sum of Rs. 20Crs as his income for AY 2012-13. A & 1021/15 categorical finding has been recorded by CIT(A) to the effect that impugned purchase of Rs.2,33,36,015/- was offered as income by the assessee in the assessment year 2012-2013. This finding of CIT(A) has not been controverted by learned DR by bringing any positive material on record. Since the assessee bonafidely offered the income of Rs. 20Crs in AY 2012-13 and also paid the due tax along with interest thereon, taxing the same in the impugned year will amount to double taxation of the same income. Accordingly, we do not find any infirmity in the order of CIT(A) for deleting the said addition.

7.

With regard to purchases of Rs.92,40,232/-, the CIT(A) has upheld addition of 15% amounting to Rs.13,86,035/- being profit element embedded in such purchases.

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