Assessment Years 2007-08 to 2012-13 — Appellant Assessee Failed to Prove Purchases — Tribunal’s Reduction of Addition from 25% to 10% of Gross Profit Margin Confirmed — Concurrent Findings of Fact by Assessing Officer, CIT(A), and ITAT Upheld

Findings of fact, when concurrently recorded by the Assessing Officer, Commissioner of Income Tax (Appeals), and ITAT, are immune from interference unless perversity is established — Absence of proper documentation and credible material justified the additions — The scope of appeal under Section 260A is limited to substantial questions of law. (Paras: 3, 5, 6, 7, 9, 10, 11, 12, 14, 16)

The Bombay High Court dismissed the appeals, holding that: a. No substantial question of law arose as the findings of the lower authorities were based on a detailed evaluation of the evidence. b. The rejection of the books of account was justified in light of the lack of credible documentation. c. The ITAT’s estimation of a 10% addition was upheld as reasonable and not requiring interference.

Acts and Sections Discussed:

Income Tax Act, 1961 — Section 260A — Substantial Question of Law — Bogus Purchases — Assessment of Gross Profit Margin

Subjects:

Bogus Purchases — Gross Profit Margin — Rejection of Books — Concurrent Findings — Substantial Question of Law — Perversity — Documentation — Delivery Challans — Estimation

Nature of the Litigation:

Appeals under Section 260A of the Income Tax Act, 1961, against the reduction of additions made by the Income Tax Appellate Tribunal (ITAT) concerning alleged bogus purchases.

Who Asked the Court and for What Remedy:  Refrigerated Distributors Pvt Ltd (now known as Partytime Ice Pvt Ltd) — Sought to challenge the ITAT’s decision confirming additions on gross profit margin despite a reduction to 10%.

Reason for Filing the Case: The Appellant contended that the rejection of its books of account was improper and the additions made were not justified, arguing the purchases were genuine.

What Has Already Been Decided Until Now:

1. The Assessing Officer made an addition of 25% on alleged bogus purchases.

2. The Commissioner of Income Tax (Appeals) confirmed the 25% addition.

3. The ITAT reduced the addition to 10%, while maintaining the finding of bogus purchases.

Issues:

a. Whether the ITAT erred in confirming a 10% addition to the gross profit margin for unproved purchases. b. Whether the rejection of the books of account was justified. c. Whether the findings of the lower authorities were perverse.

Submissions/Arguments:

a. The Appellant argued that the absence of purchase invoices and delivery challans should not lead to the conclusion of bogus purchases. b. It was contended that non-appearance of suppliers before the assessing officer should not invalidate the purchases. c. The Appellant cited precedents to support the genuineness of the transactions.