THANMAL H. JAIN,MUMBAI vs. ITO-19(3)(5), MUMBAI

This appeal filed by the assessee on 17.10.2016 is against the order of the CIT (A)-30, Mumbai dated 12.08.2016 for the assessment year 2009-2010.

In this appeal, assessee raised three grounds in toto. The core issue raised in this appeal relates to the addition on account of „bogus purchases‟. In the assessment made u/s 143(3) r.w.s 147 of the Act, AO made addition of Rs. 19,14,000/- on account of non-genuine purchases. Assessee carried the matter in appeal before the FAA. On appeal, CIT (A) confirmed the addition. Again aggrieved with the said decision of the FAA, assessee is in further appeal before the Tribunal. 3. During the proceedings before the Tribunal, Ld AR for the assessee reiterated the submissions made before the lower authorities. 4. On the other hand, Ld DR for the Revenue relied on the orders of the Revenue Authorities and supported the decision taken by the AO and the CIT (A).

After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the relevant material placed before us, I find, the decision taken by the CIT (A) vide para 7.10 of his order is relevant in this regard. In the said para, FAA supported the view taken by the AO, who relied on the judgment of the Hon‟ble Gujarat High Court in the case of CIT vs. Simit Sheth (356 ITR 451) (Guj) which is in support of 12.5%. For the sake completeness of this order, relevant lines from the said prara 7.10 of the CIT (A)‟s order are extracted as under:- “7.10........but considering the facts of the case and relying on the decision of the Gujarat High court decision in the case of CIT vs. Simit Sheth 356 ITR 451 (Guj), added 12.5% of the total non-genuine purchases......... ............The AO also not added the entire amount of purchases but only 12.5% of the such bogus purchases after rejecting the books of account of the appellant u/s 145(3) of the Act. In view of the same and respectfully following the above cited decision (Simit Sheth) the action of the AO estimating the addition @ 12.5% on the total purchases is confirmed.....”

Considering the above, I am of the opinion, the while taking the decision the Revenue Authorities correctly relied on the binding precedents ie the Bombay High Court Judgment in the case of Nikunj Eximp Enterpries P Ltd (372 ITR 619) (Bom) and Gujrath High Court Judgment in the case of CIT vs. Simit P Sheth [2013] (356 ITR 451) (Guj.). Therefore, in my considered opinion, the decision of the CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, relevant ground raised