2024 (5) TMI 1082 - AT - Income Tax

Estimation of income - bogus purchases - Assessee approached the co-ordinate Bench for A.Y. 2012-13 wherein the addition was restricted to 3% of gross profit - As assessee has already declared gross profit rate of 1.42% for the year, balance 1.58% was confirmed - HELD THAT - By this time neither the registry nor the parties informed the Bench that AO has filed an appeal against the same order though the appeal of the Revenue was filed on 3rd October, 2023. Had it been known to the Bench that the cross appeal of the Revenue is pending, perhaps that would have been heard and disposed off together. It would have been duty of the Registry to tag the cross appeals and fixed them together for hearing. However, in this case as the issue is already decided by the co-ordinate Bench that assessee should have been earned the excess gross profit of only 1.58%, the appeal of the Revenue becomes infractuous. Accordingly, we dismiss the same.

Summary

Issues involved:
The judgment involves an appeal by the Income Tax Officer against the appellate order passed by the National Faceless Appeal Centre, Delhi, regarding the assessment order under Section 143(3) read with section 147 of the Income-tax Act, 1961.

Grounds of Appeal:
The Assessing Officer raised multiple grounds of appeal questioning the application of Gross Profit rate, the authenticity of purchases, and the presumption of purchases from unknown parties.

Brief Facts:
The assessee, a partnership firm, filed its return of income which was later reopened resulting in an assessment order adding a significant amount on account of alleged bogus purchases from an accommodation entry provider. The appeal before the CIT (A) led to a partial allowance, reducing the profit involved in the bogus purchase to 60.45% based on the average gross profit of the last three years.

Appellate Proceedings:
Both parties were dissatisfied with the CIT (A) order. The assessee approached a co-ordinate Bench which restricted the addition to 3% of gross profit. However, it was noted that the Revenue's appeal was filed after the co-ordinate Bench's decision, rendering it infractuous. The appeal of the Revenue was subsequently dismissed.

Conclusion:
The judgment ultimately resulted in the dismissal of the Revenue's appeal, with the order pronounced in open court on a specified date.