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Facts
The assessee, a trader in iron and steel, filed its return for AY 2011-12 declaring an income of Rs. 2,55,878/-. Based on information from the Sales Tax department, it was found that the assessee was a beneficiary of bogus purchase bills amounting to Rs. 1,15,76,084/-.
Held
The Assessing Officer (AO) made an addition by applying a GP rate of 15% on the bogus purchases. The CIT(A), relying on a previous ITAT decision for the assessee's own case, reduced the addition by applying a GP rate of 5%.
Key Issues
Whether the CIT(A) was justified in restricting the disallowance on bogus purchases to 5% GP rate, in line with previous tribunal orders for the assessee's own case.
Sections Cited
143(3), 147
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Income Tax Appellate Tribunal, ‘SMC‘
Before: SHRI AMIT SHUKLA & SHRI S RIFAUR RAHMAN
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the department against order dated 16/05/2023 passed by NFAC, Delhi for the quantum of assessment passed u/s.143(3) r.w.s. 147 for the A.Y.2011-12.
In the grounds of appeal, the department has challenged the disallowance of 5% made by the ld. CIT(A) on bogus purchases as against disallowance @12.5% made by the ld. AO.
3. The brief facts are that assessee is a trader of various products of Iron and Steel and is regularly assessed to tax. He has filed its return of income on 29/09/2011 declaring total income of Rs.2,55,878/-. Subsequently, based on the information received from Sales Tax department that assessee was also one of the beneficiaries of some bogus bills to various parties for purchases aggregating to Rs.1,15,76,084/- The ld. AO accordingly, made an addition by applying GP rate of 15% of total amount of Rs.1,15,76,084/- on alleged bogus purchases. The ld. CIT (A) after relying upon the decision of ITAT in assessee’s own case in dated 06/02/2019 for A.Y.2009-10 applied GP rate of 5%.
4. Once the Tribunal in assessee’s own case on similar purchases has applied GP rate of 5%, then we do not find any infirmity in the order of the ld. CIT(A) in restricting the addition to the extent of 5%. Accordingly grounds raised by revenue is dismissed.
In the result, appeal of the Revenue is dismissed. Order pronounced on 20th March, 2024.