JITENDRA SHARMA, ACIT, CIRCLE -19(1), MUMBAI vs. CHHAYA GEMS, MUMBAI

ITA 4323/MUM/2024Status: DisposedITAT Mumbai26 November 2024AY 2008-09Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the additions should be limited to bringing the Gross Profit (GP) rate on purchases to the same level as other genuine purchases, citing the jurisdictional High Court's decision. In this case, the GP rate on alleged bogus purchases was already higher than other genuine purchases. The Tribunal also referred to the assessee's own case for a prior assessment year where a similar addition was restricted to 2%.

What were the facts?

The Revenue filed an appeal against the order of CIT(A) which restricted an addition made by the Assessing Officer (AO) from 8% to 2% on account of alleged bogus purchases. The assessee, a diamond trading firm, had claimed purchases from entities linked to certain groups, which the AO deemed bogus based on information from an investigation wing. The AO added 8% profit margin on these alleged bogus purchases.

What were the issues?

Whether the CIT(A) erred in restricting the addition on account of alleged bogus purchases from 2% instead of the 8% proposed by the AO, considering the facts and relevant judicial precedents.

Which sections of the Income-tax Act were involved?

Section 143(3)(ii),Section 147,Section 132(4)

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Income Tax Appellate Tribunal, “C” BENCH MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

Hearing: 19.11.2024Pronounced: 26.11.2024

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the Revenue is against the order of Ld. CIT(A)-49, Mumbai, vide order No. ITBA/APL/S/250/2024- 25/1066131642(1), dated 27.06.2024 passed against the assessment order by Assistant Commissioner of Income Tax-19(1), Mumbai, u/s. 143(3)(ii) r.w.s. 147 of the Income-tax Act (hereinafter referred to as the “Act”), dated 30.03.2016 for Assessment Year 2008-09. 2 Chhaya Gems, AY 2008-09

2.

Grounds taken by the Revenue are reproduced as under:

1.

Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition 2% instead of 8% of Rs. 28,12,12,205/- made by the Assessing officer on account of allege

The order continues below.

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