PADMARAM R. CHOUDHARY,MUMBAI vs. ITO 19(2)(5), MUMBAI

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ITA 4237/MUM/2017Status: DisposedITAT Mumbai09 November 2017AY 2010-113 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the order of the CIT(A) who had allowed partial relief by directing the deduction of profit already declared by the assessee on these purchases from the estimated addition.

What were the facts?

The assessee, engaged in the metal business, purchased goods worth ₹333.90 lakhs from parties suspected of providing accommodation entries. The Assessing Officer reopened the assessment and added 12.5% of the purchase value as profit from bogus purchases.

What were the issues?

Whether the profit from alleged bogus purchases should be added to the assessee's income, and if so, at what rate after considering declared profits.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)

For Respondent: Ms. N. Hemalatha
Hearing: 1.11.2017Pronounced: 9.11.2017

The assessee has filed this appeal challenging the order dated 8.2.2017 passed by the learned CIT(A)-29, Mumbai and it relates to A.Y. 2010-11. None appeared on behalf of the assessee, even though notice of hearing was sent by registered post on more than one occasion. Hence, I proceed to dispose of the appeal, ex-parte, without presence of the assessee.

2.

Facts relating to the case are that the assessee is engage in the business of ferrous and non-ferrous metal. The Revenue got information from Sales Tax Department that certain dealers are indulging in providing accommodation entries without actually supplying the materials. It was noticed that the assessee has purchased goods from eight of such parties aggregating to ` 333.90 lakhs. Hence the Assessing Officer reopened the assessment for the year under consideration by issuing notice u/s. 148 of the Act. The Assessing Officer, by following the decision rendered by Hon'ble Gujarat High Court in the case of Simit P. Sheth (356 ITR 451), determined the profit from such bogus purchases at 12.5% of the purchase value, which worked out to ` 41.73

2 Shri Padmaram R. Choudhary lakhs. The Assessing Officer completed the assessment by adding ` 41.73 lakhs to the total income of the assessee.

3.

In the appellate proceedings, the learned CIT(A) agreed in principle with the Assessing Officer that the profit from bogus purchases can be added and the rate of profit also can be taken at 12.50%. However he took the view that the profit already declared on such purchases should be deducted. Accordingly he directed the Assessing Officer to reduce profit already declared by the assessee on these purchases from the amount of addition so estimated. Accordingly, he allowed the appeal of the assessee partly. Still aggrieved, the assessee has filed this appeal before the Tribunal.

4.

I have heard the learned Departmental Representative and perused the record. I noticed that the Assessing Officer has followed the decision rendered by Hon'ble Gujarat High Court in the case of Simit P. Sheth (supra). I noticed that the learned CIT(A) has already granted partial relief to the assessee. Before me, assessee did not furnish any material to contradict the findings given by the learned CIT(A). Hence I have no other option but to confirm the order passed by the learned CIT(A) on this issue.

5.

In the result, appeal filed by the assessee is dismissed. Order has been pronounced in the Court on 9.11.2017.

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