Sanjay Kailash Gupta Vs ITO (ITAT Mumbai)
This appeal by the assessee is directed against order of ld. Commissioner of Income Tax (Appeals)-1, Thane dated 13.07.2016 and pertains to the assessment year 2010-11.
2. The issue raised is that ld. Commissioner of Income Tax (Appeals) erred in sustaining disallowance of 12.5 % of bogus purchase.
3. The grounds of appeal read as under:
1. On the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) erred in confirming the reopening of assessment under section 147 of the Act on the following grounds
(a) The Commissioner (Appeal) failed to appreciate that the notice under section 148 was issued without any valid reason for reopening.
(b) The Commissioner (Appeals) failed to appreciate that the Assessing Officer had failed to give reasons for reopening to the Appellant and proceeding with the assessment proceedings without authority.
(c)The Commissioner (Appeals) failed to appreciate that a mere mention of name from whom the Appellant had purchased goods from certain parties list by Sales Tax Department does not by itself a information within the meaning of section 147 and thereby a ground for reopening of assessment.
2. On the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) erred in holding the purchases of Rs.104,23,000 /- as non genuine under section 69C of the Act.
3. On the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) erred in arriving at a disallowance by adopting a Gross Profit ratio of 12.50% on alleged bogus purchases, which is without any basis and justification and thereby confirming the addition of Rs.13,02,875 /-. The said percentage is very high and is arrived on an ad-hoc basis.
4. In this case, the assessee is engaged in the business of trading in steel & scrap in the name of his proprietary concern M/s. Shree Kailash Engineering Works. Information had been received by the Assessing Officer from the Sales-tax Department, Maharashtra to the effect that the assessee was one of the beneficiaries of transactions with Hawala dealers. The assessee had shown purchases amounting to Rs.1,04,23,000/- from the following parties:
