Mohit P. Jain v. ITO-17(2)(3), Mumbai
[Citation -2019-LL-0911-94]
Citation | 2019-LL-0911-94 |
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Appellant Name | Mohit P. Jain |
Respondent Name | ITO-17(2)(3), Mumbai |
Court | ITAT-Mumbai |
Relevant Act | Income-tax |
Date of Order | 11/09/2019 |
Assessment Year | 2011-12 |
Judgment | View Judgment |
Keyword Tags | documentary evidence • gross profit rate • bogus purchase • grey market • disallowance of purchases • reopening of assessment • banking channel |
Bot Summary: | PAN : AFAPJ6477R Assessee by Ms. Komal Mehta Department by Shri Chaitanya Anjaria Date of Hearing 9.7.2019 Date of Pronouncement 11.9.2019 ORDER This is an appeal by the assessee wherein the assessee is aggrieved that the learned CIT-A has erred in sustaining 3 disallowance on account of bogus purchases, vide order dated 23.5.2018 pertaining to assessment year 2011-12. 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. 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 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. |