Mahavir Agro Industries Vs ITO (ITAT Surat)
The Surat Bench of the ITAT partly allowed the assessee’s appeal for AY 2012-13 in a case involving alleged bogus purchases of ₹48.53 lakh from three concerns controlled by an alleged accommodation entry provider.
On the jurisdictional issue, the Tribunal rejected the assessee’s challenge to reopening under section 148, holding that the Assessing Officer had acted on specific information from the Investigation Wing, examined the material including statements, recorded detailed reasons, and obtained proper approvals. The plea of lack of cross-examination and “borrowed satisfaction” was therefore dismissed.
On merits, the ITAT noted that although the alleged entry provider had stated that no goods were actually supplied and the assessee failed to produce evidence of physical movement of goods, the sales, turnover (₹15 crore), and quantitative details were accepted by the Revenue. In such circumstances, the Tribunal held that the entire purchase amount could not be added. Following settled jurisprudence, it restricted the addition to the profit element embedded in the alleged bogus purchases, which was estimated at 5% of the purchase value, over and above the regular profits already disclosed.
Accordingly, the appeal was partly allowed, sustaining reopening but granting substantial relief on quantum by limiting the addition to 5% of the impugned purchases
FULL TEXT OF THE ORDER OF ITAT SURAT
