COMMISSIONER OF INCOME TAX Vs. SIMIT P. SHETH

JUDGEMENT

(1.) The Revenue is in appeal against the judgment of the Income-tax Appellate Tribunal ("the Tribunal" for short) dated February 24, 2012, raising the following substantial question of law for our consideration:

(2.) It is this judgment of the Tribunal which is in challenge before us at the hands of the Revenue. Learned counsel, Mr. Parikh, vehemently contended that the Commissioner (Appeals) and the Tribunal both committed a serious error in overturning the Assessing Officer's decision to make full addition of Rs. 41,04,903 when the purchases are found to be bogus. There was thereafter no question of retaining only a portion thereof for addition to the income of the assessee. Counsel heavily relied on the decision of a Division Bench of this court in the case of Asst. CIT v. Pawanraj B Bokadia in Tax Appeal No. 2345 of 2009, dated September 27, 2011, wherein this court was pleased to allow the Revenue's appeal and reinstate the entire additions of the bogus purchases made by the Assessing Officer.

(3.) In the present case, however, we notice that before the Commissioner (Appeals), the assessee pointed out that the assessee was trading in steel. Once his sale of "x" quantity of steel is accepted, the purchases of the same quantity had to be believed. It was canvassed that the assessee had made sales of 1,10,786 metric tons of steel. Therefore, there had to be a matching quantity of purchase of steel also. It was argued that since the Assessing Officer accepted the sales of the steel, equivalent of purchase also must be believed. It was in this background that the Commissioner (Appeals) made the following observations: