IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J(SMC)”, MUMBAI BEFORESHRI AMARJITSINGH, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.4077/Mum/2024 - A.Y. 2011-12 ITA No.4082/Mum/2024 - A.Y. 2009-10 Income-tax Officer, vs Mr. Deepak JagshibhaiVisaria Primal Chamber, 501, 5^th Floor, Room No.11,2^ndFloor, 61, Doctor Piramal Chambers, Lalbaug, Niwas, Banganga Road, Mumbai-400 012 Walkeshwar, Mumbai-400 006 PAN : AAAPV9782G APPELLANT RESPONDENT Assessee by : Shri Prateek Jain Respondent by : Shri Asif Karmali (SR DR)

Date of hearing : 15/01/2025 Date of pronouncement : 04/02/2025

O R D E R

PER ANIKESH BANERJEE:

Both the appealsof the revenue were filed against the orders of the National Faceless Appeal Centre (NFAC), Delhi *for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’) for Assessment years 2009-10 and 2011-12, both dated18/06/2024. The impugned orders were emanated from the orders of the Learned Income-tax Officer, Ward 19(1)(4), Mumbai (in brevity, ‘the AO’), passed under section 143(3) of the Act,1961, date of orders 04/03/2015.

2. Both the appeals have same nature of facts and a common issue, so the appeal of the revenue in ITA No.4082/Mum/2024, AY 2009-10 is taken as lead case.

ITA No.4082/Mum/2024

3. The appeal filed by the revenue is below the monetary limit prescribed for filing the appeal before ITAT by the CBDT, vide its circular No.5/2024 dated 15/03/2024 as mended by circular No. F.No.279/Misc/142/2007-ITJ(PG) dated 15/03/2024. But the Ld.DR stated that the assessee’s case falls under the exception provided in paragraph 3.1(h) of the above circular, wherein it is stated that in case involving organized tax evasion including the case of accommodation entry of bogus purchases, the decision of that appeal shall be taken on merit without having rigor to tax effect and the monetary effect. The Ld.AR has not made any objection. So accordingly, both the appeals are taken for adjudication.

4. As per the information of the Maharashtra Sales-tax Department,the Ld.AO found that the assessee had made the bogus purchases amount of Rs.2,50,59,386/- which was booked in the books of account of the assessee. The ld. AO treated the alleged purchase as non-genuine. The parties have issued the false bills without the delivery of goods as reported by the Sales-tax Department. Relied on the information of the Sales-tax authorities, the Ld.AO added back the gross profit @12.5% on alleged bogus purchases amount to Rs.2,50,59,386/- which works out to Rs.31,32,423/- with the total income of the assessee. The assessee filed an appeal by challenging the addition before the Ld. CIT(A). The Ld.CIT(A) considered the submission of the assessee and restricted the addition of the gross profit @4% on the alleged bogus purchases. Being aggrieved on the order of the Ld.CIT(A), the revenue filed an appeal before us.

5. We heard the rival submission and considered the documents available in record.

The Ld.CIT(A) has taken the view which is reproduced as below: -

“7 On perusal of the submissions filed by the appellant during the appeal proceedings, it is observed that there are number of judicial pronouncements as presented above by the appellant which basically have taken the view of not disallowing the entire purchases even if the same are considered to be bogus by the AO mainly due to the reason that sales have also been declared by the appellant and such assessees in their relevant books of account, Relevant judgement in this case would be the one rolled by the appellant which is as under reliance is placed on the decision of Hon'ble High Court of Bombay in the case of PCIT Vs. Mohammad Haji Adam & Co. reported in [2019] 103 taxmann.com 459 (Bombay) wherein it is clearly hold that in case where the sales are not disputed then the addition on account of bogus purchases is to be restricted to the difference between the Gross Profit declared in the case of genuine purchases and non-gen