2019 (9) TMI 1729 - AT - Income Tax

Estimation of income - bogus purchases - purchases were treated as non-genuine purchases and an estimated addition of 12.5% was made against the stated purchases - FAA restricted the additions to 6% - HELD THAT - We find that the estimated addition of 6% is in accordance with the decision of this Tribunal in the case of assessee s sister concern for AY 2011-12. Nothing on record would suggest any change in material facts. Therefore finding no infirmity in the impugned order we dismiss both the appeals.

Summary

Issues involved: Cross-appeals for Assessment Year 2010-11 contesting the estimation of addition on account of alleged bogus purchases.

Summary:
The Appellate Tribunal ITAT Mumbai heard cross-appeals for Assessment Year 2010-11 regarding the estimation of addition on account of alleged bogus purchases. The assessee, a resident firm engaged in trading of chemical & pharmaceutical items, was assessed under section 143(3) read with section 147. The income was determined at Rs.10.26 Lacs after an addition of alleged bogus purchases amounting to Rs.10.13 Lacs. Re-assessment proceedings were initiated under section 147 based on information from the investigation wing/Sales tax Department, revealing alleged bogus purchases of Rs.81.07 Lacs. Despite notices issued to parties and the assessee's defense, the purchases were treated as non-genuine, leading to an estimated addition of 12.5%. The first appellate authority restricted the addition to 6% based on a Tribunal decision for AY 2011-12, resulting in the cross-appeals.

The Tribunal found the 6% estimated addition to be in line with a previous decision for the assessee's sister concern for AY 2011-12, with no change in material facts. Consequently, both appeals were dismissed, and the order was pronounced on 11th September 2019.