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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM
आदेश / O R D E R PER R.C.SHARMA (A.M): These are the appeals filed by the assessee against the order of CIT(A)-3,Mumbai dated 20/09/2017 for A.Y.2009-10, 2010-11 and 2011- 12 in the matter of order passed u/s.144 r.w.s. 147 of the Income Tax Act, 1961. 2. Common grievance of assessee in all the years relate to reopening of assessment and addition made on account of bogus purchases. 3. Rival contentions have been heard and record perused. 4. In all the years under consideration, Income Tax Department got information from Sales Tax Department giving name and address of 2 M/s. Krishna Traders dealers who have provided entries for bogus purchases. On the basis of this information, the AO reopened the assessment by issuing notice u/s.148. In the assessment framed u/s.143(3) r.w.s.147, AO added the entire amount of such purchases in the income of the assessee. Such purchases was Rs.9.89 lakhs in A.Y.2009-10, Rs.74,660/- in A.Y.2010-11 and Rs.5.99 lakhs in A.Y.2011-12.
By the impugned order, CIT(A) confirmed the action of the AO. The assessee has challenged the reopening on the plea that reopening was based upon the reasons to suspect instead of reason to believe. It was further argued that AO was not justified in making addition on the basis of statement given by the third parties before the Sales Tax Department without conducting any further investigation in this regard.
On the other hand, learned DR argued that Sales Tax department has given definite information for such bogus suppliers, accordingly, AO was justified in reopening the assessment and adding the entire amount of such purchases in assessee’s income.
We have considered rival contentions and carefully gone through the orders of the authorities below and found from record that Department has not disputed the corresponding sales affected by the assessee in all the years under consideration. We also found that assessee had shown GP of 10.63% in the A.Y.2009-10, 10.60% in A.Y.2008-09 and 10.51% in A.Y.2007-08. Thus, the average GP itself shown by the assessee is 10.58%. We found that assessee being a retail trader in steel and other building material, therefore, GP offered by it appears to be reasonable.
3 M/s. Krishna Traders Keeping in view the totality of facts and circumstances of the case, we direct the AO to make further addition of 10% of such bogus purchases in all the three years under consideration. We direct accordingly. 8. In the result, appeals of the assessee are allowed in part.