Loading judgment…
Facts
The Revenue filed an appeal against the order of the CIT(A) which partly allowed the assessee's appeal. The AO had made a 100% addition on account of bogus purchases, but the CIT(A) restricted it to 12.5%. The assessee was found to be a beneficiary of accommodation entries for purchases from entities controlled by an entry provider, Mr. Bharwarlal Jain.
Held
The Tribunal noted that in a similar case for the same assessment year, a coordinate bench had restricted the addition to 5% of the total purchases. Therefore, the Tribunal found that 5% of the bogus purchases were already determined as income for the assessee.
Key Issues
Whether the CIT(A) erred in restricting the addition on account of bogus purchases to 12.5% instead of upholding the AO's 100% addition, given the evidence of accommodation entries and lack of genuine business.
Sections Cited
143(3), 147, 148, 132(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI RAJ KUMAR CHAUHAN, JM
This appeal is filed by the Dy. Commissioner of Income Tax – 19 01. (1), Mumbai (the learned assessing officer) for A.Y. 2012-13, against the appellate order passed by the learned CIT – A on 29th August, 2023, wherein the appeal filed by assessee was partly allowed. 02. The learned AO is aggrieved and has raised following grounds:
– “Ground "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in reducing gross profit @ 12,5% as against the 100% addition made by the Assessing office on account of bogus purchases of Rs.2,34,54,210/-, by ignoring the fact that the DGIT (Inv.), had proved beyond doubt that Mr. Bhawarlal Jain & his Group concerns were involved in providing accommodation entry of sales & purchases without actual delivery of goods and the assessee was one of the beneficiary who accepting accommodation entries for the purchases of goods?
2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in reducing gross profit @ 12,5% as against the 100% addition made by the Assessing office on account of bogus purchases of Rs. 2,34,54,210/- without appreciating the fact that during the search operation an statement recorded u/s 132(4) of the Act, Sd/- Sd/- (RAJ KUMAR CHAUHAN) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)
Mumbai, Dated: 26.04. 2024 Sudip Sarkar, Sr.PS