SNEHA ALLOYS PVT. LTD.,MUMBAI vs. ITO 7(2)(4), MUMBAI

This appeal filed by the assessee on 10.08.2016 is against the order of the CIT (A)-14, Mumbai dated 27.05.2016 for the assessment year 2006-07.

In this appeal, assessee raised four grounds in toto. In the grounds, assessment mentioned that the CIT (A) has applied the flat rate of 12.50% on the suspected bogus purchases amounting to Rs. 21,56,486/-. Mentioning that the assessee is in loss and the said GP rate of 12.50% is never earned by the assessee evening during the time where there were no such bogus purchases. Considering the facts of the case, Ld Counsel for the assessee mentioned that the addition should be restricted to the GP of the assessee plus loss on account of VAT, if any, to the Government Exchequer. 3. After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the relevant material placed before the Tribunal, I am of the opinion that borrowing 12.50% is approved by the Hon’ble Gujarat High Court vide its judgment in the case of CIT vs. Simit P Sheth [2013] (356 ITR 451) (Guj.) is found to be applicable to the real estate / civil contract business and not to the assessee, who is engaged in the business of trading in iron and steel. It is an