ITO WARD 3(2), KALYAN, KALYAN vs. MUKESH ODHAVJI KAMALIYA, PUNE

The brief facts are that assessee is an individual engaged in the business of trading in electrical goods. The return of income was filed declaring total income of Rs.2,11,372/- for A.Y.2011-12 filed on 16/09/2011. Subsequently, based on information received from the Sales Tax department, Maharashtra that certain persons were provided entries for bogus purchase bills to a large number of tax payers and assessee has also obtained purchase bills from five such parties amounting to Rs.6,01,516/- notice u/s.148 was issued for reopening the case. In the assessment order ld. AO had made addition of entire purchases of Rs.6,09,126/-.

The ld. CIT(A) in the exparte order had applied GP rate of 25% on the entire alleged bogus purchases and sustained addition of Rs.1,52,280/-. Since none appeared on behalf of the assessee and Revenue has filed the appeal for addition of approximately Rs.4,50,000/-, even though the GP rate applied is much higher on such purchases, despite the fact that assessee produced bank Mukesh Odhavji Kamaliya book, cash book, ledger, sales register, purchase register and financial statement, the source of purchases have been duly submitted alongwith quantity of sales and purchases. Thus, the entire purchases cannot be added. Accordingly, application of GP rate by the ld. CIT (A) is upheld and appeal of the Revenue is dismissed. 5. In the result, appeal of the Revenue is dismissed.