9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (9) TMI 1073 - AT - Income TaxBogus purchases u/s 69C - addition of 12.5% of such purchases - AO added the entire amount of purchases in assessee s income - HELD THAT - CIT(A) had also called a remand report and after considering the remand report, restricted the addition to the extent of 12.5% less the G.P already declared by assessee, after recording a detailed finding which has not been controverted by the ld DR by bringing any positive material on record. CIT(A) upheld additions of 12.5% and also given further credit of G.P. already declared by assessee. The order passed by CIT(A) after considering the remand report is very reasoned order. Accordingly, we do not find any reason to interfere with the order of CIT(A) upholding the addition on account of bogus purchases to the extent of 12.5% less G.P. already declared by the assessee in the last purchase.
Issues:
- Appeals filed by revenue and cross objections by assessee against the order of CIT(A) for A.Ys. 2008-09 to 2010-11. - Restriction of addition on account of bogus purchases to 12.5% by CIT(A). - Validity of the addition of entire bogus purchases to total income by AO. - Verification of purchases made from KIL/SCIL. - Consideration of G.P. ratio and judicial pronouncements. Analysis: The judgment pertains to appeals and cross objections against the order of CIT(A) for the assessment years 2008-09 to 2010-11. The primary issue revolves around the restriction imposed by the CIT(A) on the addition for bogus purchases to 12.5% of such purchases. The AO had initially added the entire amount of bogus purchases to the total income of the assessee. The CIT(A) based its decision on detailed observations and evidence presented by the appellant regarding the nature of purchases from KIL/SCIL. The CIT(A) noted discrepancies in the proof of delivery and price differentials, leading to the conclusion that the purchases were not fully verifiable. However, the CIT(A) also acknowledged the appellant's maintained records and the absence of doubt on sales. Consequently, the CIT(A) directed the AO to estimate the addition at 12.5% of such purchases after considering the declared G.P. ratio, as per judicial precedents cited by the appellant. The judgment further delves into the background of the case, including a search action on Bharti Shipyard Limited (BSL) Group and allegations of inflating expenses through bogus purchases. The AO's decision to add the entire purchase amount to the income was challenged by the assessee before the CIT(A). The CIT(A), after considering a remand report and various details provided by the assessee, upheld the addition at 12.5% of the bogus purchases, taking into account the declared G.P. ratio. The judgment emphasizes the reasoned approach of the CIT(A) in arriving at the decision and the absence of positive material brought by the revenue to challenge the findings. Ultimately, the ITAT dismissed all appeals by the revenue and cross objections by the assessee, affirming the CIT(A)'s order. The judgment highlights the thorough examination of facts, application of legal principles, and reliance on judicial precedents in determining the appropriate addition for bogus purchases. The decision underscores the importance of substantiated evidence and adherence to established norms in assessing such contentious issues in income tax matters.
|
