SANGEETA METAL(INDIA),MUMBAI vs. ITO 19(3)(2), MUMBAI

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ITA 3273/MUM/2018Status: DisposedITAT Mumbai03 September 2019AY 2010-113 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that a 100% disallowance for bogus purchases is not justified when sales are not doubted. The addition should be limited to the extent of bringing the gross profit rate on such purchases to the same level as other genuine purchases.

What were the facts?

The assessee, engaged in metal trading, faced reopening of assessment due to alleged bogus purchases. While the assessee provided purchase vouchers and made payments through banking channels, suppliers were not produced. The sales were not doubted.

What were the issues?

Whether disallowance on account of bogus purchases is justified when sales are not doubted, and how to quantify the profit element in such purchases.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri Shamim Yahya (AM)

For Appellant: Shri. Neel Khandelwal
Hearing: 26.08.2019Pronounced: 03.09.2019

बनाम/ M/s. Sangeeta Metal ITO 19(3)(2), (India), Room No. 224, 2nd Floor, 26/24, 6B/1, Ground Matru Mandir, Tardeo v. floor, Sindhi Lane, Mumbai Road, Mumbai 400007 400004 PAN: AAFFS6604P (Appellant) .. (Respondent) Assessee by: Shri. Neel Khandelwal Revenue by: Shri. Chaitanya Anjaria सुनवाई की तारीख /Date of Hearing : 26.08.2019 घोषणा की तारीख /Date of Pronouncement : 03.09.2019 आदेश / O R D E R

PER SHAHMIM YAHYA, Accountant Member:

1.

This is an appeal by the assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 12.5% disallowance on account of bogus purchases, vide order dated 09.10.2017 pertaining to assessment year 2010-11.

2.

Brief facts of the case are that assessee in this case is engaged in business of trading in ferrous and non ferrous metals. The Assessment in this case was reopened upon receipt of information from the sales tax Department that assessee has made bogus purchases. The assessee submitted the purchase vouchers and the payments were made through banking channel. However the suppliers were not produced before the assessing officer. Sales in this case were not doubted.

M/s. Sangeeta Metal (India)

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