2025 (2) TMI 1538

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..../143(3). 2. In the Revenue's appeal, the department has challenged the deletion of addition made on account of alleged bogus purchases by applying GP rate of 3%; whereas ld. AO has made addition of entire bogus purchases of Rs. 86,14,434/- in A.Y.2007-08 and Rs. 10,50,38,208/- in the A.Y.2009-10, whereas assessee has challenged the application of GP rate of 3% and also challenged the validity of reopening u/s. 147. 3. We will take up the appeal for A.Y.2007-08. 4. The brief facts are that assessee is engaged in the business of trading in steel pipe, sheet coils and plates, i.e. ferrous and non-ferrous metals. The assessee has been maintaining regular books of accounts which were also audited u/s. 44AB. Earlier, the assessment was c....

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....gment of the Hon'ble Bombay High Court in the case of PCIT vs. Mohammad Haji Adam & Co., reported in 103 taxmann.com 459 has upheld the application of GP rate once there is no discrepancy between the purchases shown and sales declared. The ld. CIT(A) noted that assessee disclosed GP rate of 2.09% on accepted purchase and GP rate of 1.15% on the bogus purchase included. Accordingly, he has estimated GP rate of 3% on bogus purchases. 6. Before us ld. Counsel submitted that the Tribunal in assessee's case in the subsequent year has applied GP rate of 0.02% and therefore, at the most GP rate should be applied is 0.02%. 7. After hearing both the parties and on perusal of the facts and material placed on record, we find that all these purch....