THOMAS ETORIN BUTTHELO,THANE vs. ITO WARD-3(4), THANE, THANE

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ITA 5068/MUM/2016Status: DisposedITAT Mumbai12 April 2017AY 2010-112 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition on account of bogus purchases should be restricted to a flat Gross Profit (GP) rate of 12.5% of the alleged bogus purchases, as per established judicial precedents.

What were the facts?

The assessee's appeal concerns an addition of Rs. 1,67,490/- made by the AO on account of bogus purchases from M/s. Mahavir Trader. The CIT(A) confirmed the entire addition.

What were the issues?

Whether the addition for bogus purchases should be the entire amount or restricted to a GP rate of 12.5%.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO

Hearing: 29.03.2017Pronounced: 12.04.2017

अऩीराथी की ओय से / Appellant by : None प्रत्मथी की ओय से/ Respondent by : Ms. Beena Santosh, DR सुनवाई की तायीख / Date of Hearing : 29.03.2017 घोषणा की तायीख /Date of Pronouncement : 12.04.2017 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the assessee on 09.8.2016 is against the order of the CIT (A)-2, Thane dated 27.5.2016 for the assessment year 2010-2011.

2.

In this appeal, assessee raised three grounds and they revolve around the solitary issue relating to the addition on account of bogus purchases involving the information with the Sales Tax Department. In the assessment, AO made addition of Rs. 1,67,490/- involving M/s. Mahavir Trader on account of bogus purchases. Matter travelled to the first appellate authority. 3. During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) confirmed the entire addition instead of restricting the addition to GP rate of 12.5% as envisaged by the Hon’ble Gujarat High Court in the case of CIT vs. Simit P. Sheth, of 2012, dated 16.1.2013 read with the judgment of the Hon’ble jurisdictional High Court in the case of Nickunj Eximp Enterprises Pvt Ltd vs. ACIT vide Writ petition No. 2860 of 2012, dated 18th June, 2014. Aggrieved, assessee is in appeal before the Tribunal.

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