Gehrilal Rooplal Paliwal Vs. Revenue

Parties Involved

Facts Summary

The assessee, Gehrilal Rooplal Paliwal, is engaged in the business of trading in marbles and granites. The Assessing Officer (AO) received information that the assessee made purchases from parties involved in issuing bills without supplying goods for a commission. The AO issued a notice to the assessee under section 148 of the Income Tax Act, 1961, reopening the assessment. The assessee furnished bills and bank statements in support of the alleged bogus purchases. The AO held that the assessee had not substantiated the genuineness of the purchases and applied a 12.5% gross profit (GP) ratio on the suspicious purchases, adding Rs. 2,99,028/-. The AO also added Rs. 30,98,500/- under section 68 of the Act for unexplained cash deposits. The Commissioner of Income Tax (Appeals) reduced the GP percentage to 10% and deleted the addition under section 68. The Revenue appealed against the order of the CIT(A). The Tribunal found that the AO correctly applied the GP percentage of 12.5% on the impugned transactions and set aside the order of the CIT(A in this regard. However, the Tribunal upheld the CIT(A)'s decision to delete the addition made under section 68 of the Act.…

Legal Issues

• 1. Whether the CIT(A) was correct in restricting the addition made on account of bogus purchases to 10% of total bogus purchases.
• 2. Whether the CIT(A) was correct in deleting the addition made by the AO u/s. 68 of Rs. 30,98,500/- on account of unexplained cash deposits.

Judgment Outcome

Decided in favour of Revenue.

Similar Judgements

• Income Tax Appellate Tribunal (SMC) Bench, Mumbai

  Mumbai bench

• Prime Steel Industries Private Limited vs. The DCIT, Circle, Patiala

  Chandigarh bench

• Assistant Commissioner of Income Tax, CC-30 vs VINOD KUMAR

  DELHI BENCH ‘F’, NEW DELHI benchAY 2018-19, 2019-20, 2020-21Dismissed

• Quartet Thermal Engg. Pvt. Ltd. vs. Asst. CIT-8(1)(2)

  Mumbai bench

• Nilesh Premjibhai Patel Vs. ITO, Ward 32(2)(4)

  SMC Bench, Mumbai benchAY 2014-15Allowed

• Chander Bhan Yogesh Kumar Vs. Principal Commissioner of Income Tax, Delhi-10

  Delhi Bench 'C', Delhi benchAY 2018-19Allowed