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Facts
The revenue's appeal challenges an order related to Assessment Year 2009-10. The core issue involves additions made on account of alleged bogus purchases. The Assessing Officer had made an addition of Rs. 29,87,661/-, representing 7% of the total alleged bogus purchases, while the CIT(A) restricted this disallowance. The assessee deals in steel and allied products.
Held
The CIT(A) found that not all purchases were bogus and determined a figure of Rs. 1,06,75,368/- as potentially problematic. Considering the assessee offered an additional profit of 5%, the CIT(A) upheld a net profit rate of 7% and restricted the disallowance to Rs. 7,47,275/-. The Tribunal found no factual errors in the CIT(A)'s findings and agreed that the disallowance should be restricted.
Key Issues
Whether the CIT(A) was correct in restricting the addition on account of bogus purchases, and whether the assessee failed to produce parties for verification.
Sections Cited
143(3), 147
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI RAHUL CHAUDHARY, HON’BLE
| आयकर अपीलीय अिधकरण "ायपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER & SHRI RAHUL CHAUDHARY, HON’BLE JUDICIAL MEMBER Assessment Year: 2009-10 Income Tax Officer, Ward -20(3)(2), Royal Steel Traders Mumbai Vs 127-B, 3rd Lane, Darukana Mazgoan Mumbai – 400003 [PAN: AAFFM6932J] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee by : None Revenue by : Shri Himanshu Sharma, CIT, D/R सुनवाई की तारीख/Date of Hearing : 04/07/2024 घोषणा की तारीख /Date of Pronouncement: 09/07/2024 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the revenue is preferred against the order dt. 19/01/2024 by NFAC, Delhi pertaining to Assessment Year 2009-10.
The grievance of the revenue reads as under:- 1. "Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) was correct in restricting the addition made on account of bogus purchase from Rs. 29,87,661/-to Rs. 7,45,275/- of total bogus purchases ignoring the fact that the Sales Tax Department has proved beyond doubt that the parties declared as hawaia traders were involved in providing accommodation entry of purchases and the assessee was one of the beneficiary of accepting accommodation entry for the purchases". 2. "Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that the assessee failed to produce the parties for verification, in spite of opportunity provided by the Assessing Officer".
Assessment Year: 2009-10 Royal Steel Traders 2 3. "Whether on the facts and in circumstances of the case and in law, the 14. CIT(A) erred in restricting the addition made on account of bogus purchase to Rs. 7,45,275/- taking into consideration the bogus bills against which no goods have been received?". 4. "Whether on the facts and in circumstances of the case and in law, the 1A. CIT(A) erred in restricting the addition made by the Assessing Officer to Rs. 7,45,275/- in presuming that the purchase have been made from unknown parties whereas bills have been received from hawala traders".
The appellant prays that the order of the National Faceless Appeal Centre (NFAC), Delhi on the above grounds be reversed and that of the AO be restored.
The appellant craves leave to amend or alter any ground or submit additional ground which may be necessary.”