ITO 15 (1)(4), Mumbai vs M/S GAYATRI RUBCHEM PVT. LTD, Mumbai

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Last updated: 28 November 2020
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The Income Tax Appellate Tribunal (ITAT) Mumbai has ruled on an appeal concerning bogus purchases made by M/s. Gayatri Rubchem Pvt. Ltd. The Assessing Officer had added back the full amount of purchases deemed bogus. However, the Commissioner of Income Tax (Appeals) reduced this addition to 12.5%, noting that the assessee's sales had not been questioned. The ITAT upheld this decision, stating that a 100% disallowance is inappropriate when sales are genuine, as purchases are necessary for sales. While acknowledging purchases were made through the 'grey market', the 12.5% disallowance was deemed fair.

Court :
ITAT Mumbai

Brief :
This is an appeal by the revenue wherein the revenue is aggrieved that Learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] has reduced the addition for bogus purchase of Rs. 16,84,188/- done @ 100% by Assessing Officer by sustaining only 12.5%.

Citation :
I.T.A. No. 1788/Mum/2019

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1 Year PLAN
1999
(Excl. of GST ₹359)

2 Years PLAN
3499
(Excl. of GST ₹629)

BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)

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