TMI Blog2012 (10) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri B.L.Yadav, Sr. D.R. ORDER PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER : For Assessment Years 2003-04 2004-05 cross-appeals have been filed by the Assessee as well as from the side of the Revenue arising from the orders of ld.CIT(A)-V, Vadodara both identically dated 16.12.2008. The assessee has also filed cross-objections for both the assessment years. We have noticed that on identical facts as also in identical manner, the impugned additions have been made and thereafter part relief was granted by ld.CIT(A). Due to this reason, these appeals are hereby consolidated and decided by this common order. [A] Assessee s appeals for A.Ys 2003-04 2004-05: (ITA Nos.661 662/Ahd/2009) 2. Grounds of appeals for the both the Assessment Years are identically worded, however, reproduced from the lead Asst.Year 2003-04 are as under:- 1. This is an appeal filed by the appellant firm and is against the order dated 04.12.2008 assed by the CIT(A) in the matter of assessment under section 143(3) read with section 147 of IT (the Act in short) for the assessment year. 2. Because the Commissioner of Income Tax (Appeals) has erred I facts and in law not justified in dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t one Shri Jabbarsingh Chauhan Proprietor M/s.Girnar Sales Corporation, Baroda and an another person Shri Navin Raval Proprietor M/s. Shiv Metal Corporation, Baroda have issued bogus bills to the assessee without supplying the material. For AY 2003-04, facts about the bogus purchases were as under. 4.1. During the year under consideration, M/s.Girnar Sales Corporation and M/s.Shiv Metal Corporation has issued such total bogus bills of Rs.11,12,460/- to the assessee (M/s.Girnar Sales Corporation Rs.8,47,780/- M/s.Shiv Metal Corporation, Rs.2,64,680/). Payment made through cheque against such bogus bills had been deposited in the respective current account No.2152 of M/s.Girnar Sales Corporation and 2144 of M/s.Shiv Metal Corporation with Shri Mahalaxmi Co-op.Bank, Sultanpura, Baroda. It was further gathered that the amount so deposited was withdrawals in cash by self/bearer cheques immediately after depositing the cheque. Shri Jabbarsinh Chouhan, Prop.of M/s.Girnar Sales Corporation and Shri Navin Raval, Prop. Of M/s.Shiv Metal Corporation had admitted in an affidavit duly notarized with Public Notary, that the accommodation bills were issued to certain parties without supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial which were sold to various parties. Taking into account all the relevant facts of the case and respectfully following the decisions of honorable ITAT, I find that 25% of the purchase cost will be a reasonable amount which can be added in this case to cover the gain of the appellant. Therefore, out of total addition of Rs.18,56,660/- made by the AO on account of bogus purchases, Rs.13,92,495/- is deleted and Rs.4,64,165/- is confirmed being 25% of total purchases from M/s Girnar Sales Corporation M/s.Shiv Metal Corporation. 5.1. In identical manner for AY 2004-05, ld.CIT(A) has held that out of the addition of Rs.10,65,695/- a sum of Rs.8,83,697/- was to be deleted and Rs.1,81,998/- being 25% of the purchases was confirmed. Against the part relief, now both the sides are before us. 6. At the outset, ld.AR Mr.Anil R.Shah has placed reliance on a decision of ITAT D Bench Ahmedabad bearing ITA No.2801/Ahd/2008 for AY 2004-05 titled as M/s.Sanket Steel Traders vs. ITO and ITA No.2937/Ahd/2008 for AY 2004-05 (By Revenue) vide order dated 20/05/2011, the Tribunal has held as under:- 8. We have considered rival submissions and perused the material placed before us. Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase the goods from the parties mentioned in the sales bill. At the same time, it did purchase the goods from some other suppliers, may be without bill. Therefore, purchase rate as mentioned in the alleged sales bill cannot be accepted. Any person indulging in the practice of purchasing goods from the grey market and obtaining bogus bills of some other parties, would do so for getting some benefit. But what would be the magnitude of the benefit would depend upon facts of each case. In the case of Vijay Proteins, IT AT held that such benefit to be 25% and therefore sustained the disallowance for bogus purchase at 25%. In the case of Sunsteel (supra), the IT AT deemed it fit to sustain the disallowance for a lumpsum amount of Rs.50,OOQ/-. However, we find that in the case of Shri Anubhai Shivlal (supra) the FIAT has considered both the decisions in the case of Vijay Proteins and Sunsteel (supra) and thereafter sustained the disallowance at 12.5%. Relevant findings of the ITAT in the case of Anubhai Shivalal reads are under: 3. At the time of hearing before us, it is submitted by the learned counsel that the addition sustained is excessive. In support of this contention he ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench an important feature has been noted that those very parties were under consideration who have also supplied the accommodation bills in respect of bogus purchases and that fact was clearly noted by the Respected Coordinate Bench vide para-3 as follows:- 3. The facts of the case are that the assessee derives income from trading in iron, angles, plates etc. During the course of investigation, it was found by the Assessing Officer that the purchase claimed to have been made by the assessee from M/s.Girnar Sales Corporation and Shiv Metal Corporation were bogus. The total purchases made from the two parties during the year were as under: i) M/s.Girnar Sales Corporation Rs. 5,31,496/- ii) M/s.Shiv Metal Corporation Rs.10,48,897/- Rs.15,82,393/- The payment made to these parties during the year under consideration was as under: i) M/s.Girnar Sales Corporation Rs.21,18,369/- ii) M/s.Shiv Metal Corporation Rs. 5,58,190/- Rs.26,76,559/- The AO disallowed the purchase as bogus purchases and also made the addition for payment made to these parties as unexplained payment. Accordingly, the total addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns: (CO Nos.48 49/Ahd/2009): 11. Grounds of cross-objections for the both the Assessment Years are identically worded, however, reproduced from the lead Asst.Year 2003- 04 are as under:- 1. The CIT(A) has erred in both in fact and in Law in not deleting the entire addition of Rs.18,56,660 (for A.Y. Rs.10,65,695/-) made by the Assessing Officer as alleged Bogus Purchases despite the fact that the Respondent was not given copy of Statement Affidavit of supplier of goods resulting in violation of principles of natural justice. 2. Without prejudice to above your Appellant submits the CIT(A) has erred in giving discount towards cost and retaining 25% of total cost of bogus purchase . On facts of the case and as per provisions of Law the actual amount of N.P. if at all ought to have been taken as Income of the Appellant and/or only a Token amount of Rs.50,000/- following case of ACIT vs. Sunsteel 92 TTJ P.1126. 11. 1. In the light of the decision taken hereinabove, cross objections (for both the years) of the Assessee have become redundant, hence dismissed. 12. In the result, Assessee s appeals as well as Revenue s appeals are partly allowed, whereas Assessee s cros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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