2024 (6) TMI 862 - AT - Income Tax

Estimation of income - Bogus purchases - HELD THAT - As relying on appellant for the Assessment Year 2010-11 and 2011-12 2023 (3) TMI 1500 - ITAT MUMBAI we restrict the disallowance on account of bogus purchases to 7.5% of such bogus purchases - Appeal preferred by the Assessee is partly allowed.

Summary

Issues Involved:
1. Disallowance of purchases amounting to INR 4,26,18,638/- as bogus.
2. Condonation of delay in filing the appeal by 1255 days.

Summary:

Issue 1: Disallowance of Purchases as Bogus
The Assessee challenged the order dated 16/10/2019 by the CIT(A), which upheld the disallowance of 100% of purchases amounting to INR 4,26,18,638/-. The CIT(A) based this decision on information from the sales tax department and DGIT (Investigation) indicating that the Assessee had accepted bogus accommodation entries. The Assessee argued that the disallowance was based on presumptions without any conclusive findings or adverse material on record and that the sales reported were not doubted. The CIT(A) enhanced the addition from 15% to 100% of the alleged bogus purchases. The Tribunal noted that in the Assessee's cases for Assessment Years 2010-11 and 2011-12, the disallowance was restricted to 7.5% of the bogus purchases. Therefore, following the same reasoning, the Tribunal restricted the disallowance to 7.5% of the bogus purchases for the Assessment Year 2009-10.

Issue 2: Condonation of Delay
The appeal was delayed by 1255 days. The Assessee attributed the delay to multiple factors, including the ill health and subsequent death of his father, the Covid-19 pandemic, and minor medical issues faced by the Assessee. The Tribunal considered these reasons sufficient and reasonable, emphasizing that substantial justice should prevail over technical considerations. Citing the Supreme Court's stance in Collector of Land Acquisition Vs. Mst. Katiji & others, the Tribunal condoned the delay and proceeded to decide the appeal on merits.

Conclusion:
The Tribunal allowed the appeal partly by restricting the disallowance on account of bogus purchases to 7.5% of the total purchases amounting to INR 4,26,18,638/-, while dismissing all other grounds raised by the Assessee.