Sangeeta Metal (India) v. ITO, 19(3)(2), Mumbai
[Citation -2019-LL-0903-58]
Citation | 2019-LL-0903-58 |
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Appellant Name | Sangeeta Metal (India) |
Respondent Name | ITO, 19(3)(2), Mumbai |
Court | ITAT-Mumbai |
Relevant Act | Income-tax |
Date of Order | 03/09/2019 |
Assessment Year | 2010-11 |
Judgment | View Judgment |
Keyword Tags | documentary evidence • gross profit rate • bogus purchase • disallowance of purchases • sustenance of disallowance • reopening of assessment • banking channel • actual purchase • grey market |
Bot Summary: | The assessee submitted the purchase vouchers and the payments were made through banking channel. Upon careful consideration I find that assessee has provided the documentary evidence for the purchase. The rationale being no sales is possible without actual purchases. In the present case the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non- payment of tax and others at the expense of the exchequer. As regards the quantification of the profit element embedded in making of such bogus/unsubstantiated purchases by the assessee, I find that as held by honourable High Court of Bombay in its recent judgement in the case of principle Commissioner of income tax versus M Haji Adam Co ,the addition in respect of bogus purchases is to be limited to the extent of bringing the gross profit rate on such purchases at the same rate as of other genuine purchases. I respectfully following the aforesaid judgement of the honourable High Court set aside the matter to the file of the assessing 2 M/s. Sangeeta Metal I.T.A. No.3273/Mum/2018 officer with the direction to restrict the addition as regards the bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchases. |