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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai
Before: Shri B.R. Baskaran (AM)
The assessee has filed this appeal challenging the order dated 20.01.2017 passed by Ld CIT(A)-29, Mumbai in confirming the addition relating to alleged bogus purchases made in AY 2011-12.
I heard the parties and perused the record. The assessee is a trader in ferrous and non-ferrous metals. Consequent to the information received from the Sales tax department, it came to the notice of the revenue that the assessee has made purchases to the tune of Rs.2,04,01,2712/- during the year under consideration from the parties, who were listed out by the Sales tax department as hawala dealers, i.e., they have provided only accommodation bills without actually supplying the material. The AO noticed that the assessee has maintained stock register and accordingly came to the conclusion that the assessee has purchased goods from open markets, but obtained bills from the hawala dealers. Accordingly he took the view that the assessee would have made profit in the purchase transactions and the AO estimated the profit
2 Shri Jabarsingh B. Daiya element at 12.50% of the value of purchases. Accordingly the AO added a sum of Rs.25.50 lakhs to the total income of the assessee. The Ld CIT(A) sustained the rate of 12.50%, but the directed the AO to reduce the GP already declared by the assessee on the impugned purchases. Still aggrieved, the assessee has filed this appeal.
At the time of hearing, the Ld A.R submitted that the AO had made identical addition in AY 2009-10. When the matter travelled to the ITAT, the division bench of the Tribunal, vide its order dated 05.5.2017 passed in restricted the addition to 2% of the value of alleged bogus purchases.
I heard Ld D.R and perused the order passed by the division bench in the assessee’s own case for AY 2009-10. Since the facts are identical, consistent with the view taken therein, I modify the order passed by Ld CIT(A) and direct the AO to restrict the addition to 2% of the value of alleged bogus purchases.
In the result, the appeal filed by the assessee is partly allowed. Order has been pronounced in the Court on 12.9.2017.