PREMIER REFRIGERATION LTD,THANE vs. ITO 13(1)(4), MUMBAI

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ITA 6796/MUM/2016Status: DisposedITAT Mumbai27 April 2017AY 2009-102 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the assessee had linked the purchases with sales, and the books of accounts were not rejected. Therefore, adding the entire purchases was incorrect. The addition was restricted to 12.5% of the bogus purchases.

What were the facts?

The assessee's purchases were added to income on the grounds that suppliers were identified as hawala dealers by the Sales Tax Department. The Assessing Officer (AO) made an addition of Rs. 2,29,008/- on account of these purchases, which was confirmed by the CIT(A).

What were the issues?

Whether the entire amount of purchases from alleged hawala dealers can be added to the assessee's income when sales are not disbelieved and books are not rejected.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, AM

For Appellant: Shri Prakash Agarwal
For Respondent: Ms. Beena Santosh
Hearing: 27/04/2017Pronounced: 27/04/2017

आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A)- 21, Mumbai dated 13/09/2016 for the A.Y. 2009-10 in the matter of order passed u/s. 143(3) r.w.s. 147 of the IT Act. 2. The only grievance of assessee relates to addition of Rs.2,29,008/- on account of bogus purchases. I have considered rival contentions and found that AO has made addition on account of purchases by observing that as per information from Sales Tax Department, the suppliers were Hawala Dealers and not actually dealing in the goods. Accordingly AO made an addition of Rs.2,29,008/- on account of such purchases. 3. By the impugned order, CIT(A) confirmed the action of the AO.

1.

Premier Refrigeration Limited 4. I have considered rival contentions and found from record that assessee has linked entire purchases with the sales. The sales accounted by assessee was not disbelieved by the AO nor books of accounts was rejected. Under these circumstances, it is not correct to add entire purchases in assessee’s income. Keeping in view the totality of facts and circumstances of the case vis-à-vis, judicial pronouncements cited by learned AR I am inclined to restrict addition to the extent of 12.5% of such bogus purchases.

5.

In the result, appeal of the assessee is allowed in part.

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