2025 (2) TMI 228

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..... he Hon'ble Jurisdictional High Court are binding upon us. We respectfully follow the direction supra, no infirmity in the impugned appellate order.
Shri Amarjitsingh, Accountant Member And Shri Anikesh Banerjee, Judicial Member For the Assessee : Shri Prateek Jain For the Respondent : Shri Asif Karmali (SR DR) ORDER PER ANIKESH BANERJEE: Both the appeals of the revenue were filed against the orders of the National Faceless Appeal Centre (NFAC), Delhi *for brevity, 'Ld.CIT(A)') passed under section 250 of the Income-tax Act, 1961 (for brevity, 'the Act') for Assessment years 2009-10 and 2011-12, both dated 18/06/2024. The impugned orders were emanated from the orders of the Learned Income-tax Officer, Ward 19(1)(4), Mumbai (in brevit .....

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..... 59,386/- which works out to Rs. 31,32,423/- with the total income of the assessee. The assessee filed an appeal by challenging the addition before the Ld. CIT(A). The Ld.CIT(A) considered the submission of the assessee and restricted the addition of the gross profit @4% on the alleged bogus purchases. Being aggrieved on the order of the Ld.CIT(A), the revenue filed an appeal before us. 5. We heard the rival submission and considered the documents available in record. The Ld.CIT(A) has taken the view which is reproduced as below: - "7 On perusal of the submissions filed by the appellant during the appeal proceedings, it is observed that there are number of judicial pronouncements as presented above by the appellant which basically have t .....

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..... ot;H" of the ITAT, Mumbai in the case of Hasmukh Jagshi Visaria vs. ITO, ITA Nos. 2302/M/2016 & 2303/M/2016, pronounced on 12/07/2021. In that case, the bench held that where the assessee had a lower gross profit rate, the adoption of a gross profit rate of 12.5% was excessive, as it also included a VAT component of 4%. Consequently, the gross profit rate was reduced to 2% on the bogus purchases. Reliance was also placed on the judgment of the Hon'ble Bombay High Court in PCIT vs. S.V. Jiwani, (2022) 145 taxmann.com 230 (Bombay), where the Hon'ble High Court held that in cases involving bogus purchases, only the profit element embedded in such purchases should be treated as the income of the assessee. The Ld. CIT(A) accordingly adopte .....

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