ITO WD 1(3), KALYAN vs. RUCHI MENTHOL P.LTD, MUMBAI

PER D. KARUNAKARA RAO, AM: This appeal filed by the Revenue on 31.5.2016 is against the order of the CIT (A)-2, Thane dated 14.3.2016 for the assessment year 2009-2010. 2. In this appeal, Revenue raised four grounds in toto and they revolve around the core issue of addition on account of bogus purchases. At the outset, Ld Counsel for the assessee brought our attention to the order of the AO and mentioned that AO made addition of Rs. 42,67,380/- on account of „bogus purchases‟ involving the parties whose names are kept in the official website of the Sales Tax Department. While the AO made entire such bogus purchases, the CIT (A) restricted to only GP rates of the assessee over the years and found the GP rate applicable to AY 2014- 2015 is 12.19% is highest. AO calculated the net GP rate @ 6.78% (ie the said 12.19% - current GP rate of 5.41%). CIT (A) calculated the GP at the differential rate of 6.78% on the entire turnover of Rs. 102.81 lakhs and partly allowed the appeal of the assessee. Aggrieved with the said decision of the CIT (A) by granting substantial relief to the assessee, Revenue is in appeal before the Tribunal.