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Showing 61 to 80 of 2113 Records
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2018 (2) TMI 2054
TP Adjustment - comparability - application of turnover filter in the selection of comparables - HELD THAT:- Bodhtree Consulting Ltd - The coordinate bench in the matter of M/s. Infinera India Pvt. Ltd [2016 (6) TMI 1280 - ITAT BANGALORE] had examined the profile of Bodhtree Consulting Ltd. from the Annual Report of the said company and have come to the conclusion that Bodhtree Consulting Ltd. is a product company and therefore it cannot be compared to software development company
Exclusion of Sasken Communication Technologies Ltd. Persistent Systems Ltd., Larsen & Toubro infotech Ltd. and Infosys Ltd.
Persistent Systems Ltd., Larsen & Toubro infotech Ltd. and Infosys Ltd - The question of application of turnover filter is a vast question and the Tribunal has been taking the stand of 1 to 200 Crores turnover filter, however thereafter 1/10 tribunal has decided to follow 10times to 1/10 times of turnover and thereafter now sending the matters to the TPO for the purposes of examining, whether the turnover of the comparables are having any effect on the profit margin/price charged by the comparable or assessee in the light of judgment of Hon'ble Delhi High Court in the case of Chryscapital Investment Advisors (India) (P.) Ltd. [2015 (4) TMI 949 - DELHI HIGH COURT]
In the present set of appeal Persistent Systems Ltd., Larsen & Toubro infotech Ltd. and Infosys Ltd. were required to be examined on the touch stone of FAR analysis by the ld. CIT(A), but it has not been done as these comparables were removed from the list of comparables on account of turnover filter. Therefore we are remitting back the matter with respect to FAR analysis of Persistent Systems Ltd., Larsen & Toubro infotech Ltd. and Infosys Ltd. to the file of CIT(A) with the direction to decide the functionality of these companies in accordance with the rules and regulations and by following the judicial pronouncements of High Court and Tribunal decisions.
FCS Software Solutions Ltd. and Thinksoft Global Services Ltd. - inclusion of these two companies FCS Software Solutions Ltd. and Thinksoft Global Services Ltd. is covered in favour of the assessee and we accordingly hold the same.
Comparability for ITES segment - Infosys BPO Ltd. and Aditya Birla Minacs Worldwide Ltd.inclusion - These companies are required to be send back to file of CIT(A) for FAR analysis. We accordingly do so. As we are sending back for FAR analysis of Infosys BPO Ltd. and Aditya Birla Minacs Worldwide Ltd. to the file of CIT(A), therefore we are not examining the applicability of turnover filter. Accordingly we direct the CIT(A) to examine the functionality (FAR analysis) of these two companies on the tests of parameter laid down by the rules, by the judicial pronouncements of High Court as well as decision rendered by the coordinate bench while examining the Infosys BPO Ltd. and Aditya Birla Minacs Worldwide Ltd.
Exclusion of M/s. Accentia Technologies Ltd., M/s. Cosmic Global Ltd., M/s. Eclerx Services Ltd - This issue is covered by the decision rendered by the coordinate bench in the case of e4e Business Solutions India Pvt. Ltd. [2016 (3) TMI 356 - ITAT BANGALORE] Therefore following the decision of coordinate bench we direct the exclusion of these companies from the list of comparables. Thus the TPO/AO is directed to re-compute the arms length price in the ITES segment on the basis of the remaining comparable companies needless to say the benefit of second proviso to section 92C(2) be considered.
Working capital adjustment - putting a cap by the CIT (A) and the TPO - HELD THAT:- Law is settled to the extent that the assessee would be entitled to working capital adjustment in accordance with Act and Rules without any cap and therefore we direct the TPO to calculate the working capital adjustment of the assessee, vis-à-vis of the assessee on actual basis, if any. Accordingly the ground of working capital adjustment is allowed for statistical purpose.
Risk adjustment - HELD THAT:- Though the CIT(A) has directed the TPO to work out the risk adjustment as per the prevailing norms and grant the same to the assessee however it is pertinent to note that the onus is on the assessee is to provide all the relevant details and computation of quantum of level of risk in the case of the assessee as well as comparables. Therefore we direct the AO/TPO that in case the assessee provides these details the TPO has to consider and decide this issue as per the rules.
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2018 (2) TMI 2053
Suit for permanent injunction - petitioner contended that he has no objection to mark any documents in which, the husband of the first defendant can be examined and the documents can be marked only when it relates to the second defendant - HELD THAT:- In view of the representation, the respondent argued that she has expressed serious objections against the suit in the year 2014. When the proceedings are conducted in the year 2010, there is a variation in the signature of the petitioner, where as, the trial Court has observed a difference of signature and believed all the documents especially, the very same petition has been filed. Hence, observation of the trial Court does not required any interference.
In view of the representation made by the respondent, the trial Court can be proceeded without any interception and in view of the finding, the first respondent has nothing to say about the case and she has not remembered anything about the said documents cannot be marked.
This civil revision petition is dismissed.
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2018 (2) TMI 2052
Transitional Credit - Seeking a direction against the respondents for permission to permit the petitioner to submit their physical copy of form GST TRAN-1 or the data uploaded on GST Portal without the digital signature - Section 140 of CGST Act read with Rule 120 of the CGST Rules - HELD THAT:- Either parties appearing before this Court fairly submits that a similar matter came up before the Division Bench of Allahabad High Court in M/S CONTINENTAL INDIA PRIVATE LIMITED AND ANOTHER VERSUS UNION OF INDIA THRU SECY. AND 3 OTHERS [2018 (1) TMI 1245 - ALLAHABAD HIGH COURT]. The said writ petition got disposed of on 24.01.2018. The parties in the present writ petition also do not dispute that the nature of dispute raised before the Allahabad High Court was similar to the dispute of the petitioner in the instant petition, rather the case of the petitioner was on a better footage, in as much as the petitioner had already been successful in filing of their forms before the authorities concerned, except for the fact that they could not affix their digital signature because of the system error.
It is ordered that the respondents shall reopen the Portal within two weeks from receiving the copy of this order. In the event, if they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credit as claimed by the petitioner - petition disposed off.
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2018 (2) TMI 2051
CENVAT Credit - input services - Insurance Premium relating to employees/workers - period May 2012 to Jan. 2013 - HELD THAT:- The issue is covered by decision of this Tribunal in M/S CHECKMATE INDUSTRIAL GUARDS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL GOODS & SERVICE TAX, NOIDA [2020 (2) TMI 607 - CESTAT ALLAHABAD] in as much as the ‘Insurance Premium’ paid in relation to employees/workers in the factory in compliance with Sec. 38 of the Employees State Insurance Act, 1948.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 2050
Transfer of motor vehicle - owner and possession of vehicle with whom - allegation of road accident by the vehicle - succession of transfers - HELD THAT:- In view of the definition of the expression 'owner' in Section 2(30), it is the person in whose name the motor vehicle stands registered who, for the purposes of the Act, would be treated as the 'owner'. However, where a person is a minor, the guardian of the minor would be treated as the owner. Where a motor vehicle is subject to an agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement is treated as the owner.
In a situation such as the present where the registered owner has purported to transfer the vehicle but continues to be reflected in the records of the registering authority as the owner of the vehicle, he would not stand absolved of liability. Parliament has consciously introduced the definition of the expression 'owner' in Section 2(30), making a departure from the provisions of Section 2(19) in the earlier Act of 1939. The principle underlying the provisions of Section 2(30) is that the victim of a motor accident or, in the case of a death, the legal heirs of the deceased victim should not be left in a state of uncertainty. A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the registering authority. To hold otherwise would be to defeat the salutary object and purpose of the Act. Hence, the interpretation to be placed must facilitate the fulfilment of the object of the law.
In the present case, the First Respondent was the 'owner' of the vehicle involved in the accident within the meaning of Section 2(30). The liability to pay compensation stands fastened upon him. Admittedly, the vehicle was uninsured.
The submission of the Petitioner is that a failure to intimate the transfer will only result in a fine Under Section 50(3) but will not invalidate the transfer of the vehicle - for the purposes of the Act, the person whose name is reflected in the records of the registering authority is the owner. The owner within the meaning of Section 2(30) is liable to compensate. The mandate of the law must be fulfilled.
The liability to compensate the claimants will stand fastened upon the First Respondent - Appeal allowed.
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2018 (2) TMI 2049
Money laundering - proceeds of crime - Validity of attachment order - Opportunity of hearing provided or not - HELD THAT:- These writ petitions are squarely covered by the earlier order passed by this Court in R. KASANIYA BEGUM VERSUS DY. DIR., DIRECTORATE OF ENFORCEMENT, CHENNAI [2018 (9) TMI 456 - MADRAS HIGH COURT], which were filed by petitioners and they are the parties to the same impugned order of attachment and the prayer sought for is also identical.
Petition dismissed.
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2018 (2) TMI 2048
Violation of principles of natural justice - petitioners' case is that before passing the order of provisional attachment, another opportunity of hearing should have been given to them - Money Laundering - scheduled offence - proceeds of crime - attachment of property - properties are suspected to be the proceeds of crime - HELD THAT:- Before passing the order of provisional attachment the petitioners were given opportunity and only thereafter being satisfied that there are materials to believe the properties in the possession of the petitioners are likely to be proceeds of crime, the provisional attachment order has been passed to avoid transfer or concealment. The order of provisional attachment is strictly in conformity to Section 5 of the PMLA.
The action of provisional attachment has been initiated by the competent authority only after registration of complaint of schedule offences namely Sections 120 B, 420, 467 and 471 of IPC r/w Sections 3 and 4 of the Explosive Substances Act - Since the matter has been seized by the adjudication authority, we are restraining ourselves from expressing any view on the merit of this case except dismissing the writ petition as devoid of merits.
Petition dismissed.
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2018 (2) TMI 2047
Maintainability of petition - availability of alternative remedy of appeal - Provisional attachment Order - HELD THAT:- It is not in dispute that the impugned order is only provisional attachment order. It is also not in dispute that the petitioner herein is having a right to agitate the matter before the adjudicating Authority by raising all the points raised before this Court and seek for raising the attachment. When such statutory remedy is available to the petitioner before the Adjudicating Authority, who is a fact finding authority as well, this Court is not inclined to entertain the writ petition that too, challenging the provisional order of attachment.
Without expressing any view on the merits of the claim made in this writ petition, the writ petition is disposed of, by granting liberty to the petitioner to approach the adjudicating authority and file appropriate application and seek appropriate relief, as provided under law - Petition disposed off.
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2018 (2) TMI 2046
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT: It has been ascertained that the Corporate Debtor havedefaulted in making payment of the outstanding debt. The Financial Creditor has fulfilled all the requirements of law and has also proposed the name of IRP after obtaining the written consent in Form-2. Therefore, petition is admitted and the commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed.
Petition admitted - moratorium declared.
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2018 (2) TMI 2045
Dishonor of cheque - privity of parties - material alteration of the document Exhibit-P1 - corrections in the cheque were carried out in presence of witness or not - HELD THAT:- A reading of the said section go to show that if the party to the said Negotiable instrument has not given his consent for such material alteration or such material alteration was made, otherwise than in order to carry out the common intention of the original parties, in such event, that negotiable instrument is void as against the person who has not consented for such alteration. Thus ipso facto the material alteration in negotiable instrument does not make it void within itself. If the person producing and relying on that negotiable instrument satisfies the court that the person against whom the negotiable instrument is being enforced had his consent for such alteration or that the said alteration was made in order to carry out the common intention, then, such negotiable instrument would be still valid and binds the other party also.
In the instant case, the alteration shown to have been made in Ex-P1 is with respect to the date of execution of the said document which is promissory note, upon which, the suit claim is based upon - the evidence of P.W.-4 scribe that he carried out the corrections in Ex-P1 in the presence of all and he read out those corrections to all on the same day when the document was executed gets support and corroboration by the consideration receipt at Ex-P2. Therefore, the said correction at Ex-P1 proves to have been made contemporaneously at the time of execution of the document and more so in the presence of the executant of the document.
The substantial questions of law by holding that the courts below are right in passing the judgments and decrees and that the alleged material alteration does not lead the judgment and decree under appeal suffer from any infirmity - Regular Second appeal stands dismissed.
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2018 (2) TMI 2044
Exemption u/s 11 - denial of registration u/s. 12AA as well as approval u/s. 80G(5) - HELD THAT:- We are conscious that an applicant can only be granted opportunity for hearing, which has been afforded in abundance by the ld. CIT(E). A show cause by the competent authority to the applicant must however reflect the consideration of the latter’s reply, absent in the instant case. That is, the show cause dated 11/8/2017 gets vitiated by the non-consideration of the appellant’s reply furnished before the ITO(E).
The impugned order, for the reasons afore-said, is thus not sustainable in law. We, accordingly, set aside the impugned order u/s. 12AA(1)(b)(ii), and direct the ld. CIT(E) to consider the assessee’s application for registration afresh on merits, in accordance with law. The assessee-appellant shall extend full cooperation in the matter, even as assured by the ld. AR, furnishing all the details and information as may be called for.
The approval u/s. 80G is largely consequential, as also apparent from the impugned order denying the same. In any case, the same would require reconsideration in view of the assessee’s application for registration being, in consequence to this order, being required to be adjudicated afresh. The order denying approval u/s. 80G is accordingly also set aside on the same terms. Assessee's appeals are allowed for statistical purposes
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2018 (2) TMI 2043
Disallowance of interest on secured loan and deducting the same from capital work-in-progress by AO - HELD THAT:- We find that the AO has not properly examined the nexus between inflow and outflow of liquidity. Therefore, we set aside the order of the CIT(A) and restore the matter to the file of the AO to examine the contentions of the appellant delineated and pass a de novo order, after giving reasonable opportunity of being heard to the appellant. We direct the appellant to file the relevant documents/evidence before the AO. As the matter has been set aside, the appellant may file the documents submitted before us as additional evidence before the AO. Thus the 1st ground of appeal is allowed for statistical purposes.
Deemed dividend u/s 2(22)(e) - unsecured loans - HELD THAT:- As decided in NATIONAL TRAVEL SERVICES VERSUS COMMISSIONER OF INCOME TAX, DELHI, VIII [2018 (1) TMI 1159 - SUPREME COURT whole object of the provision is clear from the Explanatory memorandum and the literal language of the newly inserted definition clause which is to get over the two judgments of this Court referred to hereinabove. This is why "shareholder" now, post amendment, has only to be a person who is the beneficial owner of shares. One cannot be a registered owner and beneficial owner in the sense of a beneficiary of a trust or otherwise at the same time.
It is clear therefore that the moment there is a shareholder, who need not necessarily be a member of the Company on its register, who is the beneficial owner of shares, the Section gets attracted without more. To state, therefore, that two conditions have to be satisfied, namely, that the shareholder must first be a registered shareholder and thereafter, also be a beneficial owner is not only mutually contradictory but is plainly incorrect. Also, what is important is the addition, by way of amendment, of such beneficial owner holding not less than 10% of voting power.
We are prima facie of the view that the Ankitech judgment [2011 (5) TMI 325 - DELHI HIGH COURT] itself requires to be reconsidered, and this being so, without going into other questions that may arise, including whether the facts of the present case would fit the second limb of the amended definition clause, we place these appeals before the Hon'ble Chief Justice of India in order to constitute an appropriate Bench of three learned Judges in order to have a relook at the entire question.
Disallowance of interest on unsecured loan and deducting the same from capital WIP - HELD THAT:- We find that the AO has not properly examined the nexus between inflow and outflow of liquidity. Therefore, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to examine the contentions of the appellant delineated and pass a de novo order, after giving reasonable opportunity of being heard to the appellant. We direct the appellant to file the relevant documents/evidence before the AO. As the matter has been set aside, the appellant may file the documents submitted before us as additional evidence before the AO. Thus the 1st ground of appeal is allowed for statistical purposes.
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2018 (2) TMI 2042
Assessment u/s 153A - Addition u/s 68 - Whether no incriminating materials were found during the course of the search that have resulted in a valid addition, in the search assessment? - HELD THAT:- The Court notices that for a previous year A.Y. 2011-12, which too was covered by the same search assessment, the ITAT’s decision has been upheld in PCIT v. Sameer Gupta [2018 (2) TMI 2041 - DELHI HIGH COURT]. The Court notices that the Court had applied the rule in CITv. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT]. Since the present impugned order is part of the same search assessment but for a later year, the appeal is unmerited as the additions were made in the absence of any fresh incriminating material seized by virtue of Kabul Chawla (supra).
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2018 (2) TMI 2041
Assessment u/s 153A - search u/s 132 - whether the ITAT fell into error in deleting the amount added as per 60A by the Assessing Officer pursuant to a search under Section 132 of the Income Tax Act, 1961? - HELD THAT:- In this case the search took place in the premises on 03.10.2013. A notice u/s 153A was issued to the assessee which re-affirmed its earlier returns. AO completed the Section 153A assessment by adding amounts u/s 60A to the tune for AY 2011-12. CIT (A) and the ITAT concurrently granted relief to the assessee in the appellate proceedings holding that no fresh incriminating material was seized warranting the additions during the search. Both the appellate authorities relied upon the judgment of this Court in CIT v. Kabul Chawla,[2015 (9) TMI 80 - DELHI HIGH COURT]
In these circumstances, the Court is of the opinion that no question of law arises as the ratio in Kabul Chawla (supra) applied.
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2018 (2) TMI 2040
Disallowance of deduction u/s 80IAB - income derived from 'Operation and Maintenance Activities' of SEZ are not eligible for such deduction - HELD THAT:- We find that the issue is no longer res integra. The Co-ordinate bench of Tribunal in Revenue’s appeal relevant assessment year 2010-11 [2017 (10) TMI 1578 - ITAT AHMEDABAD] has dismissed the appeal of the Revenue and thus allowed the deduction claimed on operation and maintenance activity.
From going through the proviso (2) of section 80-IAB of the Act gives a very clear picture that when the transferee is eligible for deduction u/s 80-IAB for the income from operation and maintenance of SEZ then certainly transferor i.e. developer is eligible for deduction u/s 80-IAB from operation and maintenance.
Also going through the letter issued by Government of India Ministry of Commerce & Industries dated 21st June, 2006 to the assessee for setting up of a sector specific Special Economic Zone for Pharmaceuticals at Ahmedabad, we find that in clause (ii) under the main clause (III) referring to general condition it reads that operation and maintenance of the facilities will be met as per the standard in the specific manner and proposition of the user.
In view of our above discussion as well as observation made by Id. CIT(A), we are of the view that assessee being a developer of SEZ is eligible for deduction u/s 80-IAB for income earned from operation and maintenance of SEZ - Decided in favour of assessee.
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2018 (2) TMI 2039
Dishonor of cheque - Section 138 of the Negotiable Instruments Act, 1881 - vicarious liability under Section 141 of Negotiable Instruments Act - HELD THAT:- A perusal of Section 141 of NI Act makes it clear that if the person committing the offence under section 138 is a company /firm then every person who, at the time the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company, shall be liable to be proceeded against and punished besides the company/firm. Obviously, to attract the provisions of Section 141 of the Act averments have to be made in the complaint against such accused that he/she was incharge or responsible for the business affairs of the firm/company or that offence was committed with his consent, connivance or negligence.
In this case, specific averments have been made against the petitioners which meet the statutory requirement of Section 141 of the N.I. Act. The pleas taken by the petitioner that they were neither incharge of the firm nor responsible for managing the day-to-day affairs of the firm, are subject matter of trial. Accordingly, both the petitions are dismissed with costs of ₹ 25,000/- to be paid by each of the petitioners to the complainant. Costs be recovered by the trial court and made over to the complainant.
The applications are disposed of as infructuous.
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2018 (2) TMI 2038
Addition on account of distribution of profit in the garb of payment of additional price for purchase of milk - whether tribunal was justified in law in holding that the payment of rate difference after the closure of the accounting year do not amount to distribution of profit, as the amount to be paid was not out of the profit ascertained at the annual general meeting? - HELD THAT:- The first issue which arises in the present appeal is squarely covered by the order of Hon’ble Bombay High Court in CIT Vs. (1) Solapur Dist. Co-op. Milk Producers and Process Union Ltd [2009 (4) TMI 19 - BOMBAY HIGH COURT] (2) Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. [2009 (4) TMI 19 - BOMBAY HIGH COURT] which has been applied in assessment years 2007-08 and 2008-09. The year under appeal before us is assessment year 2009-10 and following the same parity of reasoning, we uphold the order of CIT(A) in this regard and dismiss the grounds of appeal No.1 and 2 raised by the Revenue.
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2018 (2) TMI 2037
TDS u/s 195 - remittances to non-residents - disallowance made u/s 40(a)(i) - freight charges and cargo handling charges paid by the assessee in foreign currency to non-residents for services rendered outside India - HELD THAT:- CIT(A) has rightly concluded that the freight charges and cargo handling charges paid by the assessee in foreign currency to non-residents for services rendered outside India is not susceptible to provisions of section 195 of the Act. It is an admitted position that the recipients did not have any permanent establishment in India or any agent in India. Consequently, the chargeable income thereof under s.4 did not accrue or arise in India in the hands of the non-residents having regard to section 5 r.w.s.9(1) of the Act.
Accordingly, where the income in the hands of non-residents in question i.e. foreign remittances made by the assessee was not taxable in India, the remittance was not susceptible to withholding of taxes (TDS) under s.195 of the Act. In the absence of abligation cast upon the assessee to deduct TDS under s.195, section 40(a)(i) has no application in the instant case for disallowance of the expenses. The CIT(A) has rightly concluded the issue in favour of assessee
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2018 (2) TMI 2036
Reopening of assessment u/s 147 - Addition u/s 68 - bogus credits - HELD THAT:- At all stages the stand of the petitioner is that there was no transaction of ₹ 5 lacs from the said Brightsun Travin Private Limited in favour of the petitioner during the period under consideration. In fact, counsel for the petitioner pointed out that such transfer took place during the period relevant to the assessment year 2011-12. There is no answer from the Revenue on this contention of the petitioner.
In the objections raised by the petitioner as well as in the present petition ,such a ground has been specifically taken. Revenue is unable to dislodge this factual contention. Revenue is unable even prima facie to point out that there was actually a transaction of transfer of fund of ₹ 5 lacs from Brightsun Travin Private Limited to the petitioner during the year under consideration. Thus, it is clear that the petitioner is correct in contending that the Assessing Officer has proceeded completely on wrong premise.
When the reason itself is found to be erroneous and when this is the sole ground for reopening of the assessment, impugned notice must be quashed. - Decided in favour of assessee.
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2018 (2) TMI 2035
TDS u/s 194J - Disallowance u/s 40(a)(ia) - secondment expenses on which tax was not deducted at source - HELD THAT:- As decided in own case [2017 (1) TMI 1751 - ITAT MUMBAI] the issue is covered by the decision in the case of IDS Software Solutions (India) (P) Ltd. vs. ITO (International Taxation) [2009 (1) TMI 363 - ITAT BANGALORE-A] wherein the facts discussed as regards to where the assessee entered into a secondment agreement with US Company and obtained the services of an employee and the question arose whether the reimbursement bys the assessee to the US Company of the salary paid by the US company was chargeable to tax as “fess for technical services”.
As held that though the US Co was the employer in a legal sense but since the services of the employee had been seconded to the assessee and since the assessee was to reimburse the emoluments and it controlled the services of the employee, it was the assessee which for all practical purposes was not chargeable to tax. Though the person deputed by the US Co was a technical person, the consideration paid under the secondment agreement was not “fees for technical services” because the fact that the seconded employee was responsible and subservient to the payer (assessee) and was required to be also act as officer or authorized signatory or nominee of the assessee made it consistent with an agreement for providing technical services. We dismiss this issue of revenues’ appeal.
Estimated basis on account of compensation from customers - HELD THAT:- As decided in own case [2017 (1) TMI 1751 - ITAT MUMBAI] this Bench has deleted the identical addition in assessee’s case.
Addition of bogus purchases - CIT(A) has restricted the addition to 12.5% - HELD THAT:- The Hon’ble Gujrat High Court in CIT vs. Simit P. Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] has upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases holding that only profit element embedded in such purchases can be added to income of the assessee. We further notice that the AO has not rejected the sale shown by the assessee during the year relevant to the assessment year under consideration. Under these circumstances, there is no justification in making 100% addition of the bogus purchases made by the assessee.
In our considered view, the CIT(A) has rightly restricted the addition keeping in view the element of profit embedded in the transaction in question. Accordingly, the finding of the Ld. CIT(A) on this issue is based on the law laid down by the Hon’ble Gujarat High Court rendered in the case referred above. Hence, we do not find any infirmity in the findings of the Ld. CIT(A) to interfere with the same. We, therefore, uphold the findings of the Ld. CIT(A) and dismiss this ground of appeal of the revenue.
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