2020 (12) TMI 1113 - ITAT MUMBAI - Income Tax

Head Note / Extract:
Estimation of income - Bogus purchases - CIT (A) has restricted the addition to 12.5% of the alleged bogus purchases - HELD THAT:- The assessee could not establish the genuineness of the transaction to the satisfaction of the AO during assessment proceedings. From the facts of the case it can be concluded that assessee had made purchases from grey market. Under these circumstances, the AO had no option but to make addition on estimate basis. So far as the percentage of addition is concerned in the case of CIT vs. Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] has upheld the addition of 12.5% of the total amount of bogus purchases sustained by the ITAT holding that only profit element embedded in such purchases could be added to the income of the assessee. Since, the Ld. CIT (A) has restricted the addition to 12.5% no reason to interfere with the findings of the Ld. CIT (A). Moreover, the facts of the case relied upon by the Ld. DR are different from the facts of the present case. Hence, in our considered view, the addition of 12.5% sustained by the Ld. CIT(A) is reasonable to meet the ends of justice. - Decided against revenue.