2024 (4) TMI 1074

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.... income tax act, 1961 (the act) dated 30/12/2016 passed by the assessing officer, circle - 25 (3), Mumbai was allowed. 02. The learned assessing officer is aggrieved with the appellate order and has preferred this appeal raising following 2 grounds "1. Ground no.1. Whether on the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in not considering that the addition was made on the basis of information received from Sales Tax Department, Maharashtra with regard to the bogus purchases made by the assessee from dealers without supply of actual goods. 2. Ground No.2. Whether on the facts and in the circumstances of the case and in law, the learned CIT (A) is justified in deleting the addition of Rs.11,58,....

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....as questioned to prove the purchases from the above party. In response to that assessee submitted letter dated 6/6/2016 wherein it has been submitted that assessee has already been reassessed for addition of Rs. 16,948,368/- on account of purchases from suspicious dealers. The matter travelled before the learned CIT - A and further following the order of the income tax settlement commission, profit rate of 5.76% of turnover was estimated. It was further stated that total addition confirmed by the learned CIT - A is Rs. 5,044,947 on account of bogus purchases. Therefore no further adjustment is required to be made to the total income of the assessee. Assessee also explained the nature of its business stating that she is a civil contractor wo....

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....eleted as only the gross profit embedded in the bogus purchases are to be taxed. 08. Learned assessing officer aggrieved with the above appellate order is in appeal before us. As per ground number 1 it is contested that that addition has been made on account of information received from sales tax department with regard to the bogus purchases made by the assessee from dealers without supply of actual goods and as per ground number 2 the AO is aggrieved that CIT - A justified in deleting the addition of Rs. 1,158,195 under section 69C of the act without appreciating the fact that the assessee has failed to discharge his onus was established the genuineness of the purchases. 09. The learned departmental representative After explaining the fa....

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....e was compared, after that the balance difference was confirmed by the learned CIT - A. Therefore, it is apparent that the net profit of 5.76% of the total annual turnover of the assessee has been estimated by the learned CIT - A in the appeal against the reassessment, which travelled up to the ITAT and the order of the learned CIT - A was confirmed. Now in this second reassessment proceedings further information was received that assessee has further obtained purchases from suspicious dealers amounting to Rs. 1,158,195/-. The issue is whether the addition is required to be made of alleged bogus purchases at the rate of hundred percent or the addition is subsumed in net profit rate already assessed. It is an established principle that in ca....