MEDITRIN INSTRUMENTS,MUMBAI vs. ITO 30(2)(3), MUMBAI

The assessee is engaged in the business of manufacture of electro medical equipments. The Revenue received information from the Sales Tax Department of Government of Maharashtra that certain dealers are engaged in the activity of providing only accommodation bills without actually supplying the materials. The Revenue also collected details of such dealers and details of accommodation bills provided by them to various parties. It was noticed from those documents that the assessee has purchased materials for an amount aggregating to ` 89.82 lakhs and ` 63.68 lakhs respectively during the years relevant to Assessment Years 2011-12 and 2009-10 from such persons mentioned in the list supplied by the Sales Tax Department. Accordingly, the 2 M/s. Meditrin Instruments Assessing Officer reopened the assessment of two years under consideration and disallowed entire amount of purchases mentioned above treating them as bogus purchases. The learned CIT(A), however, restricted the addition to 30% of the value of bogus purchases. Still aggrieved, assessee has filed these appeals before us.

At the time of hearing, Shri Samir Shah, partner of the assessee firm appeared and submitted that an identical addition was made in AY 2010-11 and the learned CIT(A) had confirmed to the extent of 30% of value of purchases. He submitted that the Coordinate Bench of the Tribunal, vide its order dated 15.9.2017 passed in has restricted the addition to 12.5% of the value of bogus purchases. Accordingly, he prayed that the addition may be sustained to the extent of 12.5% of the value of bogus purchases, as decided by the Tribunal in A.Y. 2010-11.

Learned DR did not object to the plea put forth by the assessee.

Having regard to the rival submissions, we are of the view the decision rendered by the Coordinate Bench of the Tribunal in A.Y. 2010-11 in the assessee’s own case may be followed as the facts surrounding the issue are identical in nature. Accordingly, we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to sustain the addition to the extent of 12.5% of the value of bogus purchases in both the years under consideration.

In the result, both the appeals of the assessee are partly allowed. Order has been pronounced in the Court on 31.7.2018.