Case Law Details
Kailash Judhistir Sahu Vs CIT (ITAT Mumbai)
Introduction: The case of Kailash Judhistir Sahu vs. CIT (ITAT Mumbai) involves an appeal against orders passed by the National Faceless Appeal Centre, Delhi, under section 250 of the Income Tax Act, 1961, for the Assessment Years 2009-10 and 2010-11. The primary issue revolves around the addition made by the Assessing Officer (AO) due to the inability of the assessee to produce parties of alleged bogus purchases.
Detailed Analysis: In this case, the assessee had made purchases totaling Rs. 88,32,789 during the relevant assessment years. To verify the genuineness of these purchases, the AO issued notices under section 133(6) of the Act to the supplier parties. However, these notices were returned as “not known.” The assessee was then asked to produce the supplier parties and relevant details, which they failed to do. Instead, the assessee’s representative requested the AO to consider the gross profit rate as determined and make additions to the returned income.
Given the inability of the assessee to produce the supplier parties and provide sufficient evidence to prove the transactions as genuine, the AO added Rs. 7,71,833 (12.99% of total purchases) to the assessee’s income.
On appeal, the CIT(A) reduced the addition to 12.5% of the unproved/non-genuine purchases based on relevant decisions of the Mumbai and Gujarat High Courts. The assessee challenged this decision.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
