NIKHIL KISHORE GANDHI,MUMBAI vs. ACIT 32(2)(4), MUMBAI

I heard the parties and perused the record. The assessee is engaged in the business of trading in iron and steel. Consequent to the information received from the Sales Tax Department that certain dealers are indulging in providing accommodation bills without supplying material and upon noticing that the assessee has purchased goods from three of such dealers aggregating to Rs. 213.77 lakhs, the AO reopened the assessment for the year under consideration. After considering the facts and circumstances of the case, the AO made addition of Rs. 12.5% of the value of purchases which amounted to Rs. 26.72 lakhs. The same was confirmed by CIT(A) and hence, the assessee has filed this appeal before us.

At the time of hearing ld AR submitted that identical issue was considered in assessee’s own case by the Division Bench of ITAT in relating to A.Y. 2009-10 and the Tribunal, vide its order dated 4.8.2017, restricted the addition to 5% of the value of bogus purchases. Ld AR submitted that the facts and circumstances of the case are identical in this year also and accordingly prayed that the addition should be restricted to 5%.

I heard ld DR and perused the record. I noticed that the Division Bench of the Tribunal has considered an identical issue in the assessee’s own case in A.Y. 2009-10 and has restricted addition to 5% of the value of bogus purchases. Consistent with the view taken in A.Y. 2009-10, I modify the order passed by CIT(A) and direct the AO to restrict the addition to 5% of the value of purchases.

In the result, appeal filed by the assessee is partly allowed. Order has been pronounced in the Court on 2.11.2017.