2018 (4) TMI 1802 - AT - Income Tax

Tribunal directs 15% addition to total income due to disputed purchase genuineness

The Tribunal partly allowed the assessee's appeal, directing the AO to add 15% of the disputed amount of Rs. 77,68,002 to the total income. The Tribunal ... Enhancement of income - CIT(A) disallowed credit purchases - HELD THAT:- We have duly taken into account the fact that the assessee is a trader than manufacturer so as to arrive at the above disallowance percentage. We accordingly direct the Assessing Officer to restrict the impugned disallowance @15%. It is made clear that our instant adjudication shall not be treated as a precedent in any preceding or succeeding assessment year. Issues:1. Reopening of assessment upheld by CIT(A).2. Addition of Rs. 77,68,002 confirmed by CIT(A) from Rs. 19,97,584.3. Dispute regarding the genuineness of purchases made by the assessee.Analysis:1. The assessee appealed against the order of the ld.CIT(A) upholding the reopening of the assessment. The Tribunal dismissed this ground of appeal as the assessee did not present any arguments during the hearing.2. The second issue revolved around the addition of Rs. 77,68,002 by the ld.CIT(A) from the initial amount of Rs. 19,97,584. The AO treated purchases as bogus due to non-response from suppliers to notices issued. The ld.CIT(A) disallowed credit purchases based on the AO's order from a previous year. The Tribunal, following a previous judgment, confirmed the addition of 15% of the alleged purchases, resulting in the addition of Rs. 77,68,002 to the total income of the assessee.3. The genuineness of purchases made by the assessee was disputed. The Tribunal considered the Division Bench's decision and directed the AO to add 15% of the disputed amount to the total income of the assessee. The Tribunal rejected a general ground of appeal that was supportive of the arguments in the second ground.In conclusion, the appeal of the assessee was partly allowed, and the Tribunal directed the AO to add 15% of Rs. 77,68,002 to the total income of the assessee, following the precedent set by the Division Bench.