Tribunal dismisses appeal on bogus purchases addition after confirming 5% rate below established 6% benchmark

The ITAT Surat dismissed the assessee's appeal regarding bogus purchases addition. The CIT(A) had confirmed addition at 5% of bogus purchases, which the Tribunal found consistent with its precedent of restricting similar additions to 6% in over 100 appeals. Since the CIT(A)'s rate was lower than the Tribunal's established benchmark and the Tribunal lacks power to enhance additions, no further relief was warranted. The Tribunal condoned a 547-day delay in filing, attributing 223 days to Covid-19 pandemic and remaining 324 days to the assessee's kidney failure, transplant, and subsequent medical supervision requiring over twelve months of isolation.

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Issues Involved:
1. Delay in filing the appeal by the assessee for Assessment Year 2012-13.
2. Merits of the case regarding addition on account of bogus purchases.

For the first issue, the appeal filed by the assessee was directed against the order passed by the Commissioner of Income Tax (Appeals) for AY 2012-13, with a delay of 547 days. The counsel explained that 223 days of the delay were due to the Covid-19 pandemic, and the remaining 324 days were due to the accountant's kidney problems and subsequent transplant. The Tribunal condoned the delay, considering the medical circumstances and evidence provided by the counsel.

Moving on to the second issue regarding the merits of the case, the Assessing Officer had made a 100% addition on account of bogus purchases. The Commissioner (Appeals) confirmed the addition at the rate of 5% of bogus purchases, citing the nature of the transactions and lack of evidence of genuine purchases. The counsel argued for the deletion of the entire addition based on submitted documents and banking transactions, while the Revenue contended that the addition should be sustained due to inflated purchase expenses.

After hearing both parties, the Tribunal noted previous judgments where similar additions were restricted to 6% of bogus purchases. In this case, the Commissioner (Appeals) had sustained the addition at 5%, and since the Tribunal cannot enhance the addition, the assessee was deemed to have received sufficient relief at the first appellate stage. Consequently, the appeal of the assessee was dismissed.

In conclusion, the Tribunal addressed the issues of delay in filing the appeal and the merits of the case regarding bogus purchases, ultimately dismissing the appeal filed by the assessee for AY 2012-13.

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