Case Law Details
ACIT Vs Rashmikant V. Shah (ITAT Mumbai)
The issue under consideration is whether the CIT is correct in restricting the disallowance u/s 69C against bogus purchase at rate of 12.5% of the bogus purchases?
ITAT states that, in the facts and the circumstances of the case, the total purchases shown to be made from the parties cannot be held to be entirely bogus. It needs to be appreciated that in order to achieve the reported sales/turnover, there must be some corresponding purchases, whether effected from the alleged entry providers or from the grey market without bills. Thus, there ought to be some purchases made and hence, entire disallowance is not justified. In this regard, the ratio laid down by the Hon’ble Bombay High Court in the case of CIT v. NikunjEximp Enterprises (P.) Ltd., is quite relevant. The CIT(A) has also gone through the case and restricted the bogus purchase to the extent of 12.5% . However, at the time of argument, the Ld. Representative of the assessee has no objection to restrict the addition to the extent of 12.5% of the bogus purchase. Anyhow, on seeing the facts and circumstances, it seems quite justifiable to restrict the addition to the extent of 12.5% of the bogus purchase. ITAT nowhere found any illegality and infirmity in the order passed by CIT(A) in question. Taking into account all the facts and circumstances, ITAT are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, all these issues are decided in favour of the assessee against the revenue.
FULL TEXT OF THE ITAT JUDGEMENT
The revenue has filed the present appeal against the order dated 08.10.2018 passed by the Commissioner of Income Tax (Appeals) -25, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2009-10.
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