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1 - 10 of 11 (0.30 seconds)Section 148 in The Income Tax Act, 1961 [Entire Act]
Section 147 in The Income Tax Act, 1961 [Entire Act]
Section 271F in The Income Tax Act, 1961 [Entire Act]
Section 276 in The Income Tax Act, 1961 [Entire Act]
Commissioner Of Income Tax - 5 vs M/S Jet Airways (India) Ltd. on 16 November, 2021
b. With respect to the argument of the assessee, that
there is no addition on the reason recorded under
Section 147 of the Act. It was stated that all the
additions made by the learned Assessing Officer are
based on the reasons recorded, therefore, the decision
of the Hon'ble Bombay High Court in case of Jet Airways
(supra), do not apply to the facts of the case.
The Income Tax Act, 1961
Section 69C in The Income Tax Act, 1961 [Entire Act]
Section 144 in The Income Tax Act, 1961 [Entire Act]
Pr. Commissioner Of Income Tax 27 vs Amit Rajendra Sheth on 3 December, 2019
On examination of the documents during the
appellate proceedings, the learned CIT - A noted that the purchases
and sales are made with the related parties are in the nature of
circular transactions made repeatedly. The transactions are not
settled through banking channel but are rooted through journal
entries. The AO has further stated that there is no evidence of
transportation of the goods from buyer to the seller. Therefore,
following the decision of the honourable Gujarat High Court in CIT
versus Smit P Sheth 356 ITR 451 he sustained the disallowance in
court to 12.5% of bogus purchases he noted that the total purchases
of ₹ 888,827,942/- is made from specialty papers private limited and
₹ 14,848,200/- is from another sister concern global paper Impex
Ltd amounting in all to ₹ 903,676,142/- and 12.5% of the same
comes to ₹ 112,959,517/-. He sustained this addition. He also
considered the gross profit ratio of the assessee and stated that it is
shown too less by the assessee and therefore it should be ignored.
He noted that gross profit ratio of the assessee over a period of 3
years ranges from 0.14% to 1.07% and gross profit ratio in
manufacturing segment is 6.38% to 104.67 % . On careful reading
Page | 15
ITA nos. 1064 & 1186/Mum/2019
M/s Opel Paper Mills Ltd; A.Y. 09-10
of the order of the learned CIT - A, we do not find any infirmity in
the reasoning given for sustaining the disallowance of ₹
112,959,517/-. Further it is a case of the circular trading entered
into by the assessee along with its related parties where there is no
evidence whether the rates charged by the parties in the circular rate
were at market rate and further when the goods are sold without
any physical movement of the goods, the sales and the purchases
are not at all reliable. The transactions are also rooted through
journal entries. The quantity of goods involved in the circular trading
is also not ascertained that how much is involved in circular trading
and what is the actual sale and purchase of the assessee. The
assessee has purchased 2,44,29,155 KG and sold the same quantity
and there is no opening stock and closing stock during the year.
Therefore, the explanation of the assessee becomes unreliable with
respect to the gross profit shown by the assessee. In view of this,
we do not find any infirmity in the order of the learned CIT - A in
upholding disallowance of expenditure of ₹ 112,959,517/- estimating
income at the rate of 12.5% of such bogus purchases. Accordingly,
ground number 3 of the appeal is dismissed.