CIT v. Simit P. Sheth

356 ITR 451High Court2013#27 most cited

What is CIT v. Simit P. Sheth authority for?

Additions for alleged bogus purchases should be restricted to the profit element, not the entire turnover. The profit element is often estimated at 12.5% of the purported bogus purchases.

1,465

judgments rely on this decision, according to BharatTax’s citation analysis of 367,164 Indian tax judgments — from 2016 to 2026.

Also referred to as

CIT v. Simit P. Sheth · section 69C · bogus purchases · undisclosed income · addition on profit element · gross profit · net profit · reassessment · assessment procedure

Also reported as

38 Taxmann 385

Sections most often in play

Section 143(3)Section 147Section 148Section 132Section 131Section 69CSection 133(6)Section 143(2)

Issues it is cited on

section 69csection 131section 133(6)reassessment proceedingsundisclosed incomesearch and seizuresection 69section 132section 13section 148businesssection 147

Judgments citing CIT v. Simit P. Sheth

M/S. Akshar Shanti Realtors Private Limited, Mumbai vs. DCIT Central Circle 3(3), Mumbai

In the result, the appeals filed by the assessee are dismissed and the appeals filed

ITA 2781/MUM/2023[2014-15]Status: FixedITAT Mumbai18 Mar 2024AY 2014-15

Bench: Shri Amarjit Singh, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Shri Ramakrishna Bandi, CIT(DR)
Section 132Section 139Section 143(2)Section 153ASection 250

…impugned bogus purchases on the (A.Ys.2013-14 & 2014-15) Shri Nilesh Shantilal Tank & others ground that the ld. A.O. has not disputed the sales made by the assessee by relying on the decision of Hon’ble Gujarat High Court in the case of Simit P. Sheth [2013] 356 ITR 451 (Guj). 12. The Revenue has challenged the ld. CIT(A)’s order for restricting the addition towards the bogus purchase to 12.5% instead of the entire purchase being added by the ld. A.O. and the assessee has also challenged the addition of 12.5% on the gross profit margin. It is observed that the Hon’ble Settlement Commission has not discarded…

Mr. Nilesh Shantilal Tank, Mumbai vs. DCIT Central Circle 3(3), Mumbai

In the result, the appeals filed by the assessee are dismissed and the appeals filed

ITA 2780/MUM/2023[2014-15]Status: FixedITAT Mumbai18 Mar 2024AY 2014-15

Bench: Shri Amarjit Singh, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: NoneFor Respondent: Shri Ramakrishna Bandi, CIT(DR)
Section 132Section 139Section 143(2)Section 153ASection 250

…impugned bogus purchases on the (A.Ys.2013-14 & 2014-15) Shri Nilesh Shantilal Tank & others ground that the ld. A.O. has not disputed the sales made by the assessee by relying on the decision of Hon’ble Gujarat High Court in the case of Simit P. Sheth [2013] 356 ITR 451 (Guj). 12. The Revenue has challenged the ld. CIT(A)’s order for restricting the addition towards the bogus purchase to 12.5% instead of the entire purchase being added by the ld. A.O. and the assessee has also challenged the addition of 12.5% on the gross profit margin. It is observed that the Hon’ble Settlement Commission has not discarded…

M/S Din Dayal Pursotam Lal, Sirsa vs. Pr.CIT, Rohtak

ITA 148/CHANDI/2021[2016-17]Status: DisposedITAT Chandigarh04 Mar 2024AY 2016-17

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Gautam Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR
Section 147Section 263Section 40A(3)

…re- assessment proceedings and the assessee had been saddled with an estimated addition of 12.5% on account of certain alleged bogus purchases. While doing so, the AO relied on the decision of the Hon'ble Gujrat High Court in the case of “Simit P. Sheth”, 356 ITR 451 (Guj). Subsequently, however, on perusal of record, the ld. PCIT noted that the assessee had not been maintaining any quantitative register and it could not substantiate the delivery of the material; and that as such, the entire amount was required to be disallowed and not restricted to 12.5%, as estimated by the AO. Keeping in view the decis…

M/S Din Dayal Pursotam Lal, Sirsa vs. Pr.CIT, Rohtak

ITA 147/CHANDI/2021[2015-16]Status: DisposedITAT Chandigarh04 Mar 2024AY 2015-16

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Gautam Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR
Section 147Section 263Section 40A(3)

…re- assessment proceedings and the assessee had been saddled with an estimated addition of 12.5% on account of certain alleged bogus purchases. While doing so, the AO relied on the decision of the Hon'ble Gujrat High Court in the case of “Simit P. Sheth”, 356 ITR 451 (Guj). Subsequently, however, on perusal of record, the ld. PCIT noted that the assessee had not been maintaining any quantitative register and it could not substantiate the delivery of the material; and that as such, the entire amount was required to be disallowed and not restricted to 12.5%, as estimated by the AO. Keeping in view the decis…

M/S Din Dayal Pursotam Lal, Sirsa vs. Pr.CIT, Rohtak

ITA 146/CHANDI/2021[2011-12]Status: DisposedITAT Chandigarh04 Mar 2024AY 2011-12

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Gautam Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR
Section 147Section 263Section 40A(3)

…re- assessment proceedings and the assessee had been saddled with an estimated addition of 12.5% on account of certain alleged bogus purchases. While doing so, the AO relied on the decision of the Hon'ble Gujrat High Court in the case of “Simit P. Sheth”, 356 ITR 451 (Guj). Subsequently, however, on perusal of record, the ld. PCIT noted that the assessee had not been maintaining any quantitative register and it could not substantiate the delivery of the material; and that as such, the entire amount was required to be disallowed and not restricted to 12.5%, as estimated by the AO. Keeping in view the decis…

JCIT (OSD) Central Cirlce-26, New Delhi vs. P L Computer & Communication Pvt Ltd, New Delhi

In the result, the appeal of the Revenue and the Cross

ITA 833/DEL/2021[2012-13]Status: DisposedITAT Delhi01 Feb 2024AY 2012-13

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Rakesh Jain, AdvFor Respondent: Ms. Sapna Bhatia, CIT-DR
Section 132Section 144Section 153ASection 153C

…N. K. Industries Vs. CIT (292 CTR 354) (Guj.)  Hi Lux Automotive Pvt. Ltd. Vs. ITO (163 Taxman 90) (Del.) 6 CO No. 195/Del/2022 P L Computer & Communication Pvt. Ltd.  CIT Vs. Nikunj Exim Enterprises Pvt. Ltd. (372 ITR 619) (Bom.)  CIT Vs. Simit P. Sheth (356 ITR 451) (Guj.)  CIT Vs. Vijay M. Mistry Construction Ltd. in ITA 1090 of 2009, order dated 10.01.2011  CIT Vs. Bholanath Poly Fab Pvt. Ltd. in ITA 63 of 2012, order dated 23.10.2012  Vijay Proteins Pvt. Ltd. Vs. CIT (58 ITD 428)  CIT Vs. M/s Nangalia Fabrics Pvt. Ltd. (220 Taxmann 17) (Guj.)  Prakash Chand Mehta Vs. CIT (301 ITR 134) (M.P.)  CIT V…

Omkar Metal and Alloys Corporation, C P Tank Mumbai vs. Income Tax Officer 19. 2. 4, Matru Mandir

In the result, the appeal filed by the assessee is allowed for In the result, the appeal filed by the assessee is allowed for In the result, the appeal filed by the assessee is allowed for statisti...

ITA 2838/MUM/2023[2009-2010]Status: DisposedITAT Mumbai29 Dec 2023AY 2009-2010

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2009-10 Omkar Metal & Alloys Ito 19.2.4, Corporation, C P Tank Matru Mandir, Opp Bhatia Room No. 47, Balakrishna Vs. Hospital, Grant Road (West), Niwas, 2Nd Floor, 2Nd Mumbai-400007. Panjarapole Lane, Mumbai-400004. Pan No. Aaafo 4997 N Appellant Respondent

For Appellant: Mr. Vimal PunmiyaFor Respondent: Mr. H.M. Bhatt, Sr. DR
Section 143(3)Section 145(3)Section 147Section 148

…Hence, following the decision of the profit would be fair and equitable. Hence, following the decision of the Gujarat High Court in the case of CIT Vs. Simit P. Gujarat High Court in the case of CIT Vs. Simit P. Sheth (2013) reported Sheth (2013) reported in 356 ITR 451 (Guj.) and also giving due consideration to the fact that in 356 ITR 451 (Guj.) and also giving due consideration to the fact that in 356 ITR 451 (Guj.) and also giving due consideration to the fact that the assesse has recorded such purchases in the books of account, I am the assesse has recorded such purchases in the books of account, I am the…

Vinipul Inorganics Foods Private Limited, Chembur, Mumbai vs. Income Tax Officer Ward 14 (3) (2), Mumbai, Maharshi Karve Road

In the result both the appeals filed by the Assessee are partly allowed

ITA 2510/MUM/2023[2010-2011]Status: DisposedITAT Mumbai21 Dec 2023AY 2010-2011

Bench: Sh.Narendra Kumar Choudhry () & Shri S Rifaur Rahman ()

Section 131Section 143(1)Section 143(3)Section 147Section 148Section 250Section 254Section 69C

…entry operators to reduce the profit. It was also considered that there will be savings on account of taxes while procuring material from grey market. The authorities below relied upon decision of Hon’ble Gujarat High Court in the case of Simit P Sheth (2013) 356 ITR 451(Guj. HC) , which has estimated disallowance @12.5% of the disputed bogus purchases to meet the end of justice. The authorities below has not brought on record industry comparables nor any rational comparability vis-à-vis preceding years GP ratio are brought on record. There is no allegation brought on record by learned DR that similar additions w…

Vinipul Inorganics Foods Pvt Ltd, Chembur, Mumbai vs. Income Tax Officer Ward 14 (3) (2), Mumbai, Maharshi Karve Road

In the result both the appeals filed by the Assessee are partly allowed

ITA 2509/MUM/2023[2009-10]Status: DisposedITAT Mumbai21 Dec 2023AY 2009-10

Bench: Sh.Narendra Kumar Choudhry () & Shri S Rifaur Rahman ()

Section 131Section 143(1)Section 143(3)Section 147Section 148Section 250Section 254Section 69C

…entry operators to reduce the profit. It was also considered that there will be savings on account of taxes while procuring material from grey market. The authorities below relied upon decision of Hon’ble Gujarat High Court in the case of Simit P Sheth (2013) 356 ITR 451(Guj. HC) , which has estimated disallowance @12.5% of the disputed bogus purchases to meet the end of justice. The authorities below has not brought on record industry comparables nor any rational comparability vis-à-vis preceding years GP ratio are brought on record. There is no allegation brought on record by learned DR that similar additions w…

Ghevarchand M. Surana, Thane vs. Income Tax Officer, Ward 2(4), Thane

In the result, the appeal filed by the assessee is partly allowed

ITA 2641/MUM/2023[2009-10]Status: DisposedITAT Mumbai27 Nov 2023AY 2009-10

Bench: Shri Pavan Kumar Gadale & Ms. Padmavathy Sshrighevarchand.M.Surana Vs Ito-Ward-2(4), 203, B-3, Sector-4, Ashar It Park, Mira Road (E), 6Th Floor, Road No. Thane-401107, 16Z, Wagle Maharashtra. Industrial Estate, Thane-400604. Maharashtra. Pan/Gir No. : Aajps6676B Appellant .. Respondent

For Appellant: Shri.Shashank Mehta.ARFor Respondent: Shri.Joginder Singh.Sr.DR
Section 143(3)Section 148

…IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & MS. PADMAVATHY S, ACCOUNTANT MEMBER ShriGhevarchand.M.Surana Vs ITO-Ward-2(4), 203, B-3, Sector-4, Ashar IT Park, Mira Road (E), 6th Floor, Road No. Thane-401107, 16Z, Wagle Maharashtra. Industrial Estate, Thane-400604. Maharashtra. PAN/GIR No. : AAJPS6676B Appellant .. Respondent Assessee by : Shri.Shashank Mehta.AR Revenue by : Shri.Joginder Singh.Sr.DR Date of Hearing 16.11.2023 Date of Pronouncement 20.11.2023 आदेश / O R D E R PER PAVAN KUMAR GADALE JM: The appeal is filed by the assessee against th…

Creative Awards & Rewards P. Ltd., Mumbai vs. ITO 9(2) (3), Mumbai

ITA 1456/MUM/2020[2010-11]Status: DisposedITAT Mumbai24 Nov 2023AY 2010-11

Bench: Shri Kuldip Singhassessment Year: 2010-11 M/S. Creative Awards, Income Tax Officer – 1/B, Dashmesh Colony, 9(2)(3), Four Bunglow Road, Vs. Aayakar Bhavan, Andheri (W), Room No.601A, Mumbai – 400 058 M.K. Road, Pan: Aaacc1801G Mumbai - 400020 (Appellant) (Respondent)

For Appellant: Shri Keshav Bhujle, A.RFor Respondent: Shri Ujjawalkumar Chavhan, D.R
Section 133(6)Section 143(2)Section 148Section 148(2)

…tion bills issued by these parties wherein there was no actual delivery/physical delivery of the goods. Keeping in view these circumstances, the AO by following the decisions rendered by Hon’ble Gujarat High Court in case of CIT Vs. Simit P. Sheth reported as 356 ITR 451 and in the case of M/s. Bholenath Poly Fab P. Ltd. reported as 355 ITR 290 proceeded to estimate the profit element embedded in the bogus purchases @ 12.5% which has been accepted by the Ld. CIT(A). 15. In the identical facts and circumstances of the case where though the purchases found to be bogus by the Revenue Authorities but sales by the as…

The DCIT, Circle-1 (1), Rajkot vs. M/S. Dhruv Craft Mill Pvt. Ltd., Village: - Lilapar, Tal. & Dist. Morbi

In the result, both the appeals filed by the Revenue are hereby dismissed

ITA 207/RJT/2022[2015-16]Status: DisposedITAT Rajkot03 Nov 2023AY 2015-16

Bench: Shri Waseem Ahmed (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 143Section 143(1)Section 148

…Assessing Officer. The Case law relied by Ld. D.R. is clearly distinguishable. Further Jurisdictional High Court held that only profit element embedded in purchases could be added as assessee’s income in the following cases: (i) CIT vs. Simit P. Sheth (2013) 356 ITR 451 (Guj-HC): in this case it is held that: "Section 145 of the Income-tax Act, 1961 Method of accounting - Estimation of Profits (Bogus purchases] - Assessment year 2006-07 Assessee was engaged in business of trading in steel on wholesale basis - Tills, held that purchases made from said parties were bogus - He. Assessing Officer having found that s…

The DCIT, Circle-1 (1), Rajkot vs. M/S. Dhruv Craft Mill Pvt. Ltd., Village: - Lilapar, Tal. & Dist. Morbi

In the result, both the appeals filed by the Revenue are hereby dismissed

ITA 206/RJT/2022[2014-15]Status: DisposedITAT Rajkot03 Nov 2023AY 2014-15

Bench: Shri Waseem Ahmed (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 143Section 143(1)Section 148

…Assessing Officer. The Case law relied by Ld. D.R. is clearly distinguishable. Further Jurisdictional High Court held that only profit element embedded in purchases could be added as assessee’s income in the following cases: (i) CIT vs. Simit P. Sheth (2013) 356 ITR 451 (Guj-HC): in this case it is held that: "Section 145 of the Income-tax Act, 1961 Method of accounting - Estimation of Profits (Bogus purchases] - Assessment year 2006-07 Assessee was engaged in business of trading in steel on wholesale basis - Tills, held that purchases made from said parties were bogus - He. Assessing Officer having found that s…

Ashok Kumar Ghamandiram Arnaiya, Mumbai vs. ITO-Ward 19(1)(2), Mumbai

In the result, all the appeals filed by the assessee are partly allowed

ITA 483/MUM/2023[2010-11]Status: DisposedITAT Mumbai26 Oct 2023AY 2010-11

Bench: Shri S Rifaur Rahman, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri Shashank MehtaFor Respondent: Shri Manoj Kumar Sinha
Section 143(1)Section 143(3)Section 148Section 250

…(1995) 214 ITR 801 (SC) held that the assessee has failed to prove the nexus of the purchase made by him from the alleged accommodation entry providers and further relied on the decision of Hon'ble High Court of Gujarat in the case of CIT vs. Simit P. Sheth 356 ITR 451 (Guj) wherein it was held that when the sales are not disputed, then only the profit element embedded in such purchase could be added to the total income of the assessee. The ld. CIT(A) further held that the rate on which addition to be made will depend upon the nature of the business. The ld. CIT(A) relied on the various decisions where the a…

ITO -34(2)(1), Mumbai vs. Manoj Dineshchandra Chitaliya, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1494/MUM/2023[2009-10]Status: DisposedITAT Mumbai15 Sept 2023AY 2009-10

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 143(1)Section 143(3)Section 147Section 271(1)(c)

…on certain purchases treated as unexplained expenditure. Assessing Officer did not doubt the sales made by the assessee from out of such purchases. Assessing Officer based on the decision of the Hon'ble Gujarat High Court in the case of CIT v. Simit P. Seth [356 ITR 451] estimated the profit element in such purchases at 12.5% and by reducing the Gross Profit already declared by the assessee. In the circumstances, we hold that there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of adhoc estimation. Coming to the interest, the assessee furnished com…

M/S. Yashaswi Fish Meal and Oil Company, Udupi vs. Deputy Commissioner of Income-Tax, Central Circle-1, Mangalore

In the result, all the appeals of the assessee are partly allowed

ITA 66/BANG/2023[2017-18]Status: DisposedITAT Bangalore01 Sept 2023AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shi V. Srinivasan, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 131Section 132(4)Section 133ASection 143Section 143(1)Section 143(3)Section 147Section 148

…trader and the Tribunal having retained twelve and half per cent of the purchase towards its possible profit, there was no reason to interfere in the order of the Tribunal.” 8.21 In the case of CIT Vs. Simit P. Sheth the Gujarat High Court reported in (2013) 356 ITR 451 (Guj) wherein the Hon’ble Gujarat High Court has held as under: “The assessee was engaged in the business of trading in steel on wholesale basis. During the course of the reassessment proceedings for the year 2006-07, the Assessing Officer noticed that some of the suppliers of steel to the assessee had made their statements on oath to the effect…

M/S. Yashaswi Fish Meal and Oil Company, Udupi vs. Deputy Commissioner of Income-Tax, Central Circle-1, Mangalore

In the result, all the appeals of the assessee are partly allowed

ITA 65/BANG/2023[2015-16]Status: DisposedITAT Bangalore01 Sept 2023AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shi V. Srinivasan, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 131Section 132(4)Section 133ASection 143Section 143(1)Section 143(3)Section 147Section 148

…trader and the Tribunal having retained twelve and half per cent of the purchase towards its possible profit, there was no reason to interfere in the order of the Tribunal.” 8.21 In the case of CIT Vs. Simit P. Sheth the Gujarat High Court reported in (2013) 356 ITR 451 (Guj) wherein the Hon’ble Gujarat High Court has held as under: “The assessee was engaged in the business of trading in steel on wholesale basis. During the course of the reassessment proceedings for the year 2006-07, the Assessing Officer noticed that some of the suppliers of steel to the assessee had made their statements on oath to the effect…

M/S. Yashaswi Fish Meal and Oil Company, Udupi vs. Deputy Commissioner of Income-Tax, Central Circle-1, Mangalore

In the result, all the appeals of the assessee are partly allowed

ITA 64/BANG/2023[2014-15]Status: DisposedITAT Bangalore01 Sept 2023AY 2014-15

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shi V. Srinivasan, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 131Section 132(4)Section 133ASection 143Section 143(1)Section 143(3)Section 147Section 148

…trader and the Tribunal having retained twelve and half per cent of the purchase towards its possible profit, there was no reason to interfere in the order of the Tribunal.” 8.21 In the case of CIT Vs. Simit P. Sheth the Gujarat High Court reported in (2013) 356 ITR 451 (Guj) wherein the Hon’ble Gujarat High Court has held as under: “The assessee was engaged in the business of trading in steel on wholesale basis. During the course of the reassessment proceedings for the year 2006-07, the Assessing Officer noticed that some of the suppliers of steel to the assessee had made their statements on oath to the effect…

M/S. Yashaswi Fish Meal and Oil Company, Udupi vs. Deputy Commissioner of Income-Tax, Central Circle-1, Mangalore

In the result, all the appeals of the assessee are partly allowed

ITA 63/BANG/2023[2013-14]Status: DisposedITAT Bangalore01 Sept 2023AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shi V. Srinivasan, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 131Section 132(4)Section 133ASection 143Section 143(1)Section 143(3)Section 147Section 148

…trader and the Tribunal having retained twelve and half per cent of the purchase towards its possible profit, there was no reason to interfere in the order of the Tribunal.” 8.21 In the case of CIT Vs. Simit P. Sheth the Gujarat High Court reported in (2013) 356 ITR 451 (Guj) wherein the Hon’ble Gujarat High Court has held as under: “The assessee was engaged in the business of trading in steel on wholesale basis. During the course of the reassessment proceedings for the year 2006-07, the Assessing Officer noticed that some of the suppliers of steel to the assessee had made their statements on oath to the effect…

M/S. Yashaswi Fish Meal and Oil Company, Udupi vs. Deputy Commissioner of Income-Tax, Central Circle-1, Mangalore

In the result, all the appeals of the assessee are partly allowed

ITA 62/BANG/2023[2012-13]Status: DisposedITAT Bangalore01 Sept 2023AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shi V. Srinivasan, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 131Section 132(4)Section 133ASection 143Section 143(1)Section 143(3)Section 147Section 148

…trader and the Tribunal having retained twelve and half per cent of the purchase towards its possible profit, there was no reason to interfere in the order of the Tribunal.” 8.21 In the case of CIT Vs. Simit P. Sheth the Gujarat High Court reported in (2013) 356 ITR 451 (Guj) wherein the Hon’ble Gujarat High Court has held as under: “The assessee was engaged in the business of trading in steel on wholesale basis. During the course of the reassessment proceedings for the year 2006-07, the Assessing Officer noticed that some of the suppliers of steel to the assessee had made their statements on oath to the effect…