2021 (6) TMI 163 - AT - Income Tax

Estimation of income - Bogus purchases - addition of the bogus purchase @ 12.5% - HELD THAT - Since the matter of controversy has been adjudicated by Hon ble ITAT in the appeal filed by the revenue 2021 (5) TMI 774 - ITAT MUMBAI wherein held CIT(A) has clinched the issue in the correct perspective. The estimation of 12.5% was quiet fair and reasonable and the same do not require any interference -.Dismiss the present appeal of the assessee.

Summary

Issues:
1. Disallowance of alleged suspicious purchases for A.Ys. 2009-10 & 2010-11.

Analysis:
1. The assessee filed appeals against the CIT(A)'s order disallowing 12.5% of the alleged total suspicious purchases amounting to a specific sum for both A.Ys. 2009-10 and 2010-11.
2. The case involved reopening of the assessee's case based on information from the Sales Tax Department regarding bogus purchase entries from various parties.
3. The Assessing Officer (AO) added 100% of the bogus purchase amount to the assessee's income, leading to an appeal before the CIT(A) and subsequently to the ITAT.
4. The ITAT, in a previous judgment for A.Y. 2009-10, confirmed the addition of 12.5% of the bogus purchases, emphasizing the need for estimation due to lack of supplier confirmation despite evidence of transactions.
5. The ITAT applied the same reasoning for A.Y. 2010-11, dismissing the revenue's appeal and upholding the CIT(A)'s decision to restrict the addition to 12.5% of the suspicious purchases.
6. The ITAT dismissed the present appeals by the assessee for both A.Ys. 2009-10 and 2010-11, citing the previous judgment and the similarity in facts and issues.

This comprehensive analysis highlights the legal proceedings, the basis for the disallowance of suspicious purchases, and the ITAT's consistent approach in adjudicating similar cases across different assessment years.