DCIT 8(2)(2), MUMBAI vs. STEAMLINE INDUSTRIES LTD, MUMBAI

Enterprises (in writ petition no 2860, order dt. 18.6.2014). However, the facts of that case were different inasmuch as sales were to the Government department. However the facts and circumstances of the present case indicate that assessee has engaged into dealings in the grey market. Dealings in the grey market give the assessee various savings at the expense of the Exchequer. Hence, on the overall consideration of facts and circumstances and following the decision of Hon’ble Gujarat High Court in the case of CIT vs Simit P. Sheth [2013] 356 ITR 451 (Guj.) we hold that a disallowance of 12.5% of the bogus

7 & 5843/Mum/2015 M/s. Steamline Industries Ltd. purchase would meet the end of justice. Accordingly, we modify the order of the ld. Commissioner of Income Tax (Appeals) and direct that the disallowance in this case should be restricted to 12.5% of the bogus purchase. The ld. Counsel of the assessee’s reliance upon the Hon’ble Delhi High Court decision in the case of CIT vs. JMD Computers and Communication (P.) Ltd. [2009] 20 DTR 370 (Del) is not applicable on the facts of the present case. In the said decision the Hon’ble High Court did not find any infirmity in the concurrent order of the ld. Commissioner of Income Tax (Appeals) and the ITAT. Moreover, the said case was related to investigation carried out by the Inspector. Furthermore, since we have adjudicated this case by reference to the Hon’ble Apex Court and Hon’ble High Court decisions applicable on the facts of this case, the other Tribunal’s decisions referred by the ld. Commissioner of Income Tax (Appeals) and ld. Counsel of the assessee are not applicable.