IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “J(SMC)” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER Assessment Year : 2009-10 Deputy Commissioner of Icon Infotech Pvt. Ltd., Income Tax-5(2)(1), 2, 1^st Floor, 5^th Floor, vs. Rubbunissa Manzil, Aayakar Bhavan, Opp: Grant Road Station, M.K. Road, Grant Road (W), Mumbai-400020. Mumbai-400007.

PAN : AAACI7604K (Appellant) (Respondent)

For Assessee : NONE For Revenue : Shri Asif Karmali, Sr.DR Date of Hearing : 22-04-2025 Date of Pronouncement : 25-04-2025

ORDER

PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Revenue against the order of the Ld.Addl/JCIT(A)-1, Ludhiana [„Ld.CIT(A)‟], dated 16-01-2025, pertaining to Assessment Year (AY) 2009-10, wherein the Revenue has taken the following grounds of appeal:

“1.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in restricting the addition amounting to Rs. 1,27,004/-, being 12.50% of Rs. 10,16,028/- to 13.88% of Rs. 10,16,028/- on account of alleged bogus purchase made from suspicious dealers Le. M/s. Cedilla Technologies without appreciating the facts that the assessee has not been able to establish the genuineness of the purchase made from M/s. Cedilla Technologies Ltd

2."The appellant prays that the order of the CIT(A) on the grounds be set aside and That of the Assessing Officer be restored."

3."The appellant craves leaves to add, amend or alter all or any of the grounds of appeal."

2. Briefly the facts of the case are that the assessee company filed its return of income on 27-09-2013 declaring total income at Rs.22,54,085/-. During the course of assessment proceedings, the AO had received a list of suspicious dealers prepared by the MVAT department of the Maharashtra Government. On the basis of the information received in the form of the list, the AO treated the entire purchases made by the assessee from one of such dealers - Cedilla Technologies, as bogus purchase and passed the assessment order u/s 143(3) of the Income Tax Act, 1961 („the Act‟) on 27- 02-2015 for the AY. 2009-10 by completing the assessment at income of Rs.23,96,110/-, after making addition of Rs.1,41,025/-, applying GP ratio @ 13.88 on account of bogus purchase of Rs. 10,16,028/- to tax the income embedded in the bogus purchase transaction.

3. Aggrieved by the said order passed by the AO, the assessee preferred an appeal before the Ld. CIT(A) wherein partial relief has been provided to the assessee and against which, the Revenue has preferred the present appeal.

4. During the course of hearing, the Ld. DR submitted that the Ld.CIT(A) has disposed off appeal of the assessee, relying on the decision of the Co- ordinate Bench of the Tribunal in assessee's own case for the AY.2011-12, wherein the Co-ordinate Bench of the Tribunal had upheld the decision of the Ld.CIT(A), sustaining the addition to the extent of 12.50% of purchases. Accordingly, in the instant case, following the said decision, the Ld. CIT(A) directed the AO to re-calculate income applying the GP rate @ 12.50% instead of GP rate @ 13.88 on the purchases treated as bogus amounting to Rs.10,16,028/ (i.e. Rs. 1,27,004/-being 12.50% of Rs.

10,16,028/-).

5. It was submitted by the Ld.DR that the Revenue is aggrieved by the said action of the Ld. CIT(A), which is not acceptable on merit as the assessee could not substantiate its claim of purchases made and reported transactions with suspicious dealer i.e. M/s. Cedilla Technologies which was as per list of suspicious dealers prepared by the MVAT department of Maharashtra Government. The Ld. DR submitted that in such purchases, where there are corresponding sales, rate of purchase of items is not verifiable, therefore, profit earned on such suspicious purchases has been rightly adopted by AO at 13.88% of Rs. 10,16,028/- being Rs. 1,41,025/- and added to the total income of the assessee. This fact has been accepted and upheld by the Ld. CIT(A). Ther