HIMANSHU DILIP JAIN,MUMBAI vs. INCOME TAX OFFICER - 19(1)(5), MUMBAI

Himanshu Dilip Jain 2. This appeal was filed on 30/04/2015 and finally the ld. CIT(A) has decided this appeal after more than 8 1/2 years. Despite that, the ld. CIT(A) had stated that assessee had not appeared on various dates of hearing by notices sent through ITBA portal without even ensuring whether notices have been sent at a proper address or not or through e-mail.

Be that as may be, here assessee had declared income of Rs.11,55,433/- on 30/09/2008 which was duly processed u/s.143(1). Later on based on some information received from Sales Tax department that assessee has taken purchases of Rs.2,05,39,325/- from non-genuine parties, assessee’s case was reopened u/s.148. The ld. AO has applied GP rate of 12.5% on the total purchase amount of Rs.25,67,416/-. The ld. CIT(A) has confirmed such addition made by the ld. AO in exparte order.

After hearing both the parties and on perusal of the material placed on record it is seen that the only issue is whether the GP rate of 12.5% is justified on the alleged bogus purchases, because admittedly the source of the purchases are from the books of accounts and through banking channels and corresponding sales has not been disturbed. Ld. Counsel submitted that assessee has already disclosed GP rate of 6.47% in this year which also includes GP rate of these alleged bogus purchases. Thus, even if 12.5% is applied, then GP rate already disclosed on such purchases of 6.47% has to be removed and at the most only 6% of additional amount of GP rate can be made. We agree with the contention of the ld.

In the result, appeal of the assessee is partly allowed.