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Facts
The assessee's appeal was filed against an order of the CIT(A) confirming an addition made by the AO. The AO had reopened the case under section 147 and applied a GP rate of 12.5% on purchases identified as from non-genuine parties, amounting to Rs. 2,05,39,325.
Held
The Tribunal agreed with the assessee's contention that the GP rate of 6.47% already disclosed should be adjusted. The GP rate on the disputed purchases was reduced to an additional 6%, considering the general GP rate on similar trades.
Key Issues
Whether the GP rate of 12.5% applied by the AO on alleged bogus purchases is justified, and if not, what is the appropriate GP rate to be applied considering the disclosed GP rate.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, ‘E‘ BENCH
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 23/11/2023, passed by Ld. CIT(A)-49, Mumbai for the quantum of assessment passed u/s.147 for the A.Y.2008-09 which was an appeal filed by the assessee against order passed by the ld. AO u/s.143(3) r.w.s. 147 dated 16/03/2015.
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.
Himanshu Dilip Jain Counsel as assessee has already disclosed 6.4% GP rate on trading of ferrous and non-ferrous metal, wherein GP rate is around 4-6%, then at the most further GP has to be imputed then, 6% over and above what assessee has disclosed is sufficient. Accordingly, the addition is reduced by applying 6% GP rate on purchase amount of Rs. 2,05,39,325/- accordingly, appeal of the assessee is allowed partly.
In the result, appeal of the assessee is partly allowed.
Order pronounced on 22nd May, 2024.