Case Law Details
Shri Kamal H. Shah Vs ITO (ITAT Mumbai)
Undisputedly, the assessee has failed to prove genuineness of purchases and the authenticity of the dealers in both the impugned assessment years. The notices sent to the dealers under section 133(6) of the Act on the addresses furnished by the assessee by the Assessing Officer were received back unserved by the postal authorities with the remark ‘left or not known’. No confirmations from the dealers were filed by the assessee. Further, the assessee has failed to substantiate trail of goods. Payments made through cheque/banking channels are not sacrosanct and does not prove authenticity of transactions. Since, the Revenue has accepted the sales declared by the assessee, it is only the profit element embedded in such bogus transactions that has to be brought to tax.
Taking into consideration entirety of facts, I am of the considered view that estimation of G.P by CIT(A) at 12.5% on bogus purchases is on higher side. To meet the ends of justice, addition is restricted to 6% of the bogus purchases in each of the assessment years. The impugned order is modified, accordingly.
FULL TEXT OF THE ITAT JUDGEMENT
These two appeals by the assessee are directed against the order of Commissioner of Income Tax (Appeals) -29, Mumbai (in short ‘the CIT(A)) dated 18/03/2019 common for assessment years 2010-11 and 2011-12. Since, the facts germane to both the appeals and the grounds of appeal are similar these appeals are taken up together for adjudication and are decided by this common order.
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