TMI Blog2019 (7) TMI 1564X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases. No fault could be find with the estimation made by Ld. CIT(A), in this regard. Disallowance of depreciation - HELD THAT:- FAA has erred in noting the factual matrix. The depreciation was disallowed as a matter of conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire purchases to the tune of ₹ 81,76,272/- themselves as bogus and as such the instant case was not merely a case where the party from whom such purchases were allegedly made was acting as conduit between the assessee and the actual sellers of the material. b) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the then AO called upon the assessee to prove the genuineness of the purchases to the tune of ₹ 81,76,272/- and only after considering the submission filed by the assessee, the AO held that the impugned purchases were wholly bogus and as such, there is no finding of the fact in the assessment order if any such purchases were made by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not capitalized to qualify for claiming depreciation. Further, the entire bogus purchases of A.Y.2009-10 has been dismissed by the CIT(A) in limine. 2.1 Facts in brief are that the assessee being resident corporate assessee stated to be engaged in manufacturing of engineering goods, molds and dyes was subjected to re-assessment proceedings for impugned AY. The assessment was framed u/s 143(3) r.w.s. 147 on 11/03/2016 wherein income of the assessee was determined at ₹ 101.68 Lacs after certain additions as against returned income of ₹ 13.39 Lacs e-filed by the assessee on 30/09/2011 which was processed u/s.143(1). 2.2 Pursuant to receipt to certain information from DGIT(Investigation) / Sales Tax Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ₹ 51.18 Lacs on account of Plant Machinery was disallowed in AY 2009-10. 3. Aggrieved, the assessee contested the stand of the Ld. AO on legal grounds as well as on merits. The Ld. CIT(A), after considering the factual matrix and relying upon various judicial decisions including the decision of Hon ble Gujarat High Court rendered in CIT Vs. Simit P. Sheth [356 ITR 451] CIT Vs. Bholanath Poly Fab. P. Ltd. [355 ITR 290, restricted the additions to 12% of alleged bogus purchases. The disallowance of depreciation was also directed to be recomputed after considering the profit on alleged bogus purchases @12%. Aggrieved, the revenue is in further appeal before us. 4. The assessee has filed an application u/r 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, we do not find any infirmity in the same. 6. Our aforesaid view is in line with the recent decision of Hon ble Bombay High Court rendered in bunch of appeals titled as Pr.CIT Vs. M/s Mohommad Haji Adam Co. [ITA No.1004 others of 2016, dated 11/02/2019] wherein Hon ble Court distinguishing the cited case law of Hon ble Gujarat High Court rendered in N.K. Industries Ltd. Vs Dy. C.I.T. in Tax Appeal No. 240 of 2003 and connected appeals decided on 20th June, 2016 observed as under: - 8. In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the selling price accordingly as a result of which profit comes to 5.66%. Therefore, considering 5.66% of ₹ 3,70,78,125/- which comes to ₹ 20,98,621.88 we think it fit to direct the revenue to add ₹ 20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favor of the assessee and partially in favor of the revenue. 9 In these circumstances, no question of law, therefore, arises. All Income Tax Appeals are dismissed, accordingly. No order as to costs. Drawing strength from the same, we hold that no fault ..... X X X X Extracts X X X X X X X X Extracts X X X X
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