INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Bogus purchases - GP Estimation on bogus purchases — Validity of

Assessee was engaged in the business of import, manufacturing and export diamonds. A search and seizure action under section 132 was conducted in the case of assessee and it was noticed that assessee had taken accommodation entries of bogus purchases from various suspicious concerns. Consequent to search, notice under section 153A was issued. AO on the basis of information gathered during the course of search and survey and also, taken note of various informations received from investigation wing came to conclusion that assessee had obtained accommodation entries of bogus purchase bills from various parties and accordingly, made additions towards such bogus purchases @8% profit. CIT(A) had scaled down additions made by AO towards profit on alleged non-genuine purchases from certain parties to 6%. Held: Assessee neither appeared for hearing nor filed any details to prove that findings of fact recorded by CIT(A) was incorrect. The findings recorded by CIT(A) was based on the recommendation of the Task force constituted by Ministry of Commerce and Industry, Government of India and also, decision of Tribunal in case of Renisha Impex Pvt.Ltd. ([I.T.A. Nos. 4464/Mum/2016, I.T.A. Nos. 4453/Mum/2016, dt. 27-10-2017]). Therefore, CIT(A) was right in estimating 6% gross profit on alleged non-genuine purchases and further allowed deductions towards gross profit already declared by assessee.

REFERRED : Naitik Gems v. ITO [I.T.A. No. 4760/Mum/2017, dt. 2-11-2017] Renisha Impex P. Ltd. v. ITO [I.T.A. Nos. 4464/Mum/2016, I.T.A. Nos. 4453/Mum/2016, dt. 27-10-2017] and Suresh L. Satyani v. ITO [in ITA 3452/M/16 vide Order, dt. 8-3-2017]

FAVOUR : Against the assessee

A.Y. :

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