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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM
आदेश / O R D E R PER R.C.SHARMA (A.M):
This is an appeal filed by the assessee against the order of CIT(A)- 29, Mumbai dated 20/03/2017 for A.Y.2010-11 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act.
In this appeal assessee is aggrieved by the action of CIT(A) for deleting the reopening of assessment as well as confirming the addition by estimating profit at 8% of bogus purchases.
Rival contentions have been heard and record perused. The AO had information that the assessee had made purchases from the parties to the tune of Rs.1,89,09,471/- and that these parties were involved in providing mere accommodation entries with no genuine transactions. In order to verify the genuineness of the purchases claimed by the assessee from M/s. Rajendra Tubes & Fittings these parties, the AO asked the assessee to furnish supporting documents for corresponding sales affected. The assessee could furnish the addresses of the parties. The AO therefore issued notice u/s. 133(6) to the parties but the notices were returned back unserved by the postal authorities, The AO further held that apart from payments made through banking channels and chart showing details of purchases of the alleged parties and corresponding sales, the assessee could not furnish the vital documents such as delivery challans, transport receipts, octroi receipts etc. On the other hand, the sales tax department has given information that these parties are involved in providing only accommodation entries for purchases. The assessee was also asked to produce the parties for verification but the assessee failed to do so. The AO therefore held that the purchases made from the above parties are bogus and proceeded to estimate the GP on these purchases @12.5% and made an addition of Rs.23,63,684/-.
By the impugned order, CIT(A) restricted the addition to the extent of 8% of its purchase.
I have considered rival contentions and carefully gone through the orders of the authorities below. Considering the GP rate shown by the assessee during the year and as well as during the earlier two years, I deem it proper to restrict addition to the extent of 6% of the bogus purchases. I direct accordingly.
M/s. Rajendra Tubes & Fittings 6. In the result, appeal of assessee is allowed in part.