TMI Blog2019 (9) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... e has paid the VAT element on the bogus purchases. Hence, we direct the AO to recompute the income after applying profit rate at the rate of 8% of the bogus purchases and compute the income accordingly. The appeal of the assessee is partly allowed. - ITA No. 2151/Mum/2016 (Assessment Year 2009-10) - - - Dated:- 15-7-2019 - SRI MAHAVIR SINGH, JM AND SRI M BALAGANESH, AM Appellant by: None Respondent by: Shri Rajiv Gubgotra, DR ORDER PER MAHAVIR SINGH, JM: This appeal of assessee is arising out of the order of the Commissioner of Income Tax (Appeals)]-2, Thane, in short CIT(A), in ITA No.026/14-15 dated 28.01.2016. The Assessment was framed by the Income Tax Officer, Ward-2, Panvel (in short ITO/ AO) for the A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) the opportunity to cross examine the source of alleged adverse evidences was never granted to the appellant inspite of specific request for the same. 3. Briefly stated facts are that the assessee engaged in the business of trading in Iron, Steel cement on semi-wholesale basis. The AO received information from DGIT (Investigation), who in turn received information from Sales Tax Department, Mumbai that the assessee has made purchases from hawala parties, as listed in hawala dealers by the Maharashtra Sales Tax Department who are providing bogus bills of purchase amounting to ₹ 28,61,859/- as admitted by these hawala dealers in their deposition before the authorities. The same reads as under: - Sr. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled the following details. A. Yr. Sales (Rs) GP % of GP NP % of age of NP to T/O 2007-08 74,51,060 2,42,527 3.27 1,28,132 1,71% 2008-09 3,59,92,241 7,18,148 2.00 3,41,449/- 0.95% 2009-10 5,71,28,320 11,08,805/- 1.94 5,08214 0.98% 2010-11 7,68,90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, has gone down substantially low i.e. 1.94% from 3.27% in A Yr 2007-08. This shows that the appellant is capable of harvesting OP @3.2%. from the items traded by him. In compliance, the Ld. AR, could not substantiate the fall in OP with supporting documents. From the above chart, it is crystal clear that the appellant has suppressed gross profit by 1.33% (3.27% - 1.94%). The suppressed Gross profit is worked out at ₹ 7.59,807/- (Its. 5,71,28,320/- x 1.33/100). In this regard. the reliance is placed on the decision of the Hon'ble Supreme Court in the case of MIs Kanchwala Gems Vs JCIT, 288 ITR 10 (SC), wherein, on account of similar set of circumstances, the estimation of OP was held, as justified. PM Since the suppression o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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