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Facts
The Revenue appealed an order that granted the assessee relief regarding bogus purchases. The AO had initially added 12.5% of the value of alleged non-genuine purchases, based on information from the Sales Tax Department. This was done for purchases totaling Rs. 3.93 crores identified as being from accommodation bill providers.
Held
The Tribunal, in previous assessment years (2009-10 to 2011-12), had restricted similar additions to 2% of the value of non-genuine purchases. The CIT(A) followed this precedent and directed the AO to restrict the addition to 2% for the current assessment year.
Key Issues
Whether the addition made by the AO on account of alleged bogus purchases should be restricted to 2% as per previous orders of the Tribunal in assessee's own case.
Sections Cited
Section 12.5%, Section 2%
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The Revenue has filed this appeal challenging the order dt.27-01-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟] and it relates to AY. 2012-13. The only issue urged by the Revenue in this appeal relates to relief granted by the assessee in respect of bogus purchases.
2. The assessee is engaged in the business of trading of steel goods. The AO received information from the Sales Tax Department that the assessee has made purchases to the tune of Rs.3.93 crores from certain parties, who were identified as accommodation bill providers without actually supplying materials. Accordingly, the AO took the view that the purchases amounting to Rs.3.93 crores made from those providers are non-genuine purchases. Accordingly, by placing reliance on the decision rendered by the Hon‟ble Gujarat High Court in the case of Simit P. Sheth [356 ITR 451], the AO made addition of 12.5% on the value of non-genuine purchases.
In the appellate proceedings, the Ld.CIT(A) noticed that the AO had made identical additions in AYs. 2009-10to 2011-12 and when the matter had reached the Tribunal, the ITAT, vide its order passed in 1805/Mum/2017 and 3057/Mum/2017, dt. 03-11-2017 had restricted the addition to 2% of the value of alleged non-genuine purchases. Accordingly, following the decision rendered by the Tribunal in assessee‟s own case for the AYs. 2009-10 to 2011-12, the Ld.CIT(A) directed the AO to restrict the addition to 2% of the value of the alleged non-genuine purchases. The Revenue is aggrieved.
We heard the parties and perused the record.We notice that an identical addition was made by the AO for the AYs. 2009-10 to 2011-12 @12.5% of the value of alleged non-genuine purchases. However, the Tribunal, vide its order referred supra, has restricted the addition to 2% of the value of the non-genuine purchases. The Ld.CIT(A) has followed the decision so rendered by the Tribunal in assessee‟s own case.
In the result, the appeal of the Revenue is dismissed.