ITO 9(1)(2), MUMBAI vs. AMANN INFRA DEVELOPEMNTS LTD, MUMBAI

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ITA 929/MUM/2017Status: DisposedITAT Mumbai27 November 2017AY 2011-124 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, noting that the corresponding sales were not doubted and no contrary material was presented by the Revenue. Therefore, the addition of 12.5% of bogus purchases was sustained.

What were the facts?

The Revenue appealed against the CIT(A)'s order which confirmed an addition of 12.5% on account of bogus purchases. The Assessing Officer had disallowed purchases worth Rs. 75,61,306/- treating them as bogus.

What were the issues?

Whether the CIT(A) was justified in estimating suppressed profit at 12.5% of bogus purchases when corresponding sales were not doubted. Whether the Revenue provided sufficient material to controvert the CIT(A)'s findings.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “K”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, HON’BLE & SHRI AMARJIT SINGH, HON’BLE

For Respondent: Shri V.Jenardhanan
Hearing: 18/09/2017Pronounced: 27/11/2017

आदेश / O R D E R PER R.C.SHARMA (A.M): 1. This is an appeal filed by the Revenue against the order of CIT(A)-16, Mumbai dated 30.11.2016 for A.Y.2011-12, in the matter of order passed u/s.143(3) r.w.s. 147 of the I.T Act.

2.

In this appeal revenue is aggrieved by the action of the Ld.CIT(A) for confirming the addition on account of bogus purchases to the extent of 12.5%.

1.

Y: 2011-12) M/s. Amann Infra Developments Limited 3. Nobody appeared on behalf of the assessee in spite of given opportunity. The Bench decided to dispose of the appeal after hearing the Ld. DR and considering the material placed on record.

4.

We have gone through the orders of the authorities below. The brief facts of the case are that the assessee company filed its return of income for A.Y. 2011-12 on 29.09.2011 declaring total income of Rs.27,36,910/-. The return was processed u/s.143(1) of the I.T. Act accepting the return income of the assessee company. Thereafter, on the basis of information received from Sales Tax (VAT) Department, State of Maharashtra the case was re-opened u/s.147 of the I.T. Act and an order u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 was passed on 29.03.2015 assessing the total income of the appellant at Rs.1,03,64,610/- whereby the purchases for an amount of Rs.75,61,306/- were disallowed by the A.O. by treating them as bogus purchases and Rs.66,395/- as preliminary expenses.

5.

By the impugned order, Ld.CIT(A) after applying various judicial pronouncements upheld addition to the extent of 12.5% of such purchases after having the following observing:- “6.2.31 As narrated earlier, the Ld. A.O. in this case has held that the parties from whom the purchases were made by the appellant were found to be bogus and that is the reason for which it has not produced during the assessment proceedings. Not having doubted the consumption/sales, the motive behind obtaining bogus bills thus, appears to be inflation of purchase price so as to suppress true profits. Considering the facts of the case as well as the various case laws cited (Supra), I estimate the suppressed profit to the extent of 12.5% of the purchases

Y: 2011-12) M/s. Amann Infra Developments Limited made from the bogus entities, as the suppressed profit element embedded in such purchases. This estimation is in addition to the GP shown by the appellant. Accordingly, this ground of appeal is partly allowed.

6. Against the above order of the Ld.CIT(A), Revenue is in further appeal before us.

7. We have carefully gone through the orders of the authorities below. It is clear from the findings so recorded by ld. CIT(A) that the corresponding sales so made by the assessee in respect of the bogus purchases were not declined. After applying various Judicial pronouncements to the facts of instant case, the Ld.CIT(A) recorded his finding at Para No.6 of his order which has not been controverted by the Ld.DR by bringing any positive material on record. Accordingly we do not find any reason to interfere in the order of the Ld. CIT(A).

8.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on this 27/11/2017

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