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2017 (1) TMI 1798 - ITAT MUMBAIEstimation of income - Bogus purchases - HELD THAT:- We find that it is not the case of the Revenue that the NP rate + VAT totals to 12.5%. Hon’ble Gujarat High Court approved the said 12.5% in the case of Simit P Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] considering the nature of business activities which falls in the real estate. The applicable VAT rate is also different in State of Gujarat. Accordingly, we direct the Assessing Officer to restrict the disallowance to a round figure of 7%. VAT figures are considered here for the reason that the alleged bogus purchases from the grey market is done without sale bills causing loss to the State Government exchequer. The presumption is that the alleged purchases of materials is done without bills. Accordingly, we confirm the addition to the extent of 7% of the said purchases of Rs. 53.16 lakhs. Addition should be restricted. Accordingly, AO is directed. Thus, the ground is partly allowed. Addition on account of commission - argument of the assessee that CIT (A) enhanced assessment without giving a notice or an opportunity to the assessee - HELD THAT:- This issue is not settled and the additions of this kind are unsustainable in law in view of the judgments in the cases of Bikram Singh [2016 (4) TMI 822 - ITAT DELHI] , Apex Court judgment in the case of CIT vs. Shapoorji Pallonji Mistry [1962 (2) TMI 12 - SUPREME COURT] and CIT vs. Rai Bahadur Hardutroy Motilal Chamania [1967 (4) TMI 8 - SUPREME COURT] - Admittedly, the CIT (A) made this enhancement of assessment without granting opportunity to the assessee. Effect of this failure results in deletion of the enhancement. Accordingly, this part of the ground is allowed in favour of the assessee.
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