Refrigerated Distributors Pvt Ltd Vs DCIT (Bombay High Court)
The Bombay High Court dismissed appeals filed by Refrigerated Distributors Pvt Ltd against the Deputy Commissioner of Income Tax (DCIT) concerning assessment years 2007-08 to 2012-13. The central issue revolved around the Income Tax Appellate Tribunal’s (ITAT) decision to confirm a 10% addition to the gross profit margin on account of unproved purchases for the Assessment Year 2009-10. The appellant’s counsel argued that the rejection of their books of account and the subsequent addition were improper, contending that the lack of purchase invoices and delivery challans, or the non-appearance of suppliers before the assessing officer, should not automatically deem the purchases as bogus. They cited previous High Court judgments to support their arguments, urging the court to re-evaluate the evidence and overturn the concurrent findings of the lower authorities.
However, the Bombay High Court firmly stated that appeals under Section 260A of the Income Tax Act are limited to substantial questions of law and do not permit a re-appreciation of evidence. The court emphasized that concurrent findings of fact by the assessing officer, the Commissioner of Income Tax (Appeals), and the ITAT are generally binding unless a case of perversity is established. To prove perversity, the appellant would need to demonstrate that the findings were based on no evidence, exclusion of relevant evidence, consideration of irrelevant evidence, or a palpably absurd view. After reviewing the material on record, even at the appellant’s urging, the High Court found ample support for the concurrent findings of bogus purchases. The court noted the lack of credible supporting documentation, including the implausible explanation for the absence of Octroi Check Naka records. Consequently, the court concluded that no substantial question of law arose in the appeals, and upheld the ITAT’s order, dismissing the appeals without any cost order. The court also noted its surprise that the assessing officer had not made a 100% addition given the circumstances.
