TMI Blog2012 (2) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... y assessee Shri S.N. Soparkar, SR-AR Ms. Urvashi Shodhan, AR By Respondent Shri Samir Tekriwal, SR-DR O R D E R PER Mukul Kumar Shrawat, Judicial Member:- These are cross-appeals filed by the assessee as well as Revenue arising from the order of Ld. Commissioner of Income-tax (Appeals)-II, Baroda dated 18-09-2009 for the assessment year 2006-07. 2. As far as assessee s appeal is concerned grounds No. 1 to 3 and 5 are general in nature and as per the statement of Ld. AR, Mr. S.N.Soparkar not relevant to decide the main issue. In view of his statement these grounds are hereby dismissed being general in nature. 3. The main issue of the appellant is about the confirmation of addition of ₹ 12,71,471/- on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said cheque after deducting dalali the balance amount was withdrawn in cash and returned to the respective parties. Therefore, the issuance of bogus sale bills was confirmed by those parties. On the basis of these facts, the Assessing Officer has held that barring invoices and delivery chllans, there was no other document to prove that the purchases have actually been made by the assessee. There was no lorry receipt, transportation details, number of weighment, excise gate pass etc., no document was produced during the assessment proceedings. After examining the bank accounts and other evidences AO has held that alleged purchases from Bhavna Trading Co., Minaxi Enterprise and Arun Ind. Corporation was not genuine purchase and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive. The Ld. AR has informed that almost in identical situation in the case of ACIT v. M/s Kulubi Steel in ITA No1568/Ahd/2008 order dated 16-12- 2010 vide para-8 has held as under:- 8. From the above, it is evident that the assessee did not make any effort to controvert the finding recorded by the DDIT (Investigation) and it made no efforts to produce the seller parties on the other hand it claimed that it is not his responsibility to produce the seller. It is a settled law that onus is on the assessee to establish the genuineness of the purchase. The assessee has produced various evidence with regard to the receipt of the goods by it, it. Stock register, receipt of weigh-bride for weighment of goods purchased by the assessee, oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of bogus purchases. However, we find that the facts in the above case were different. In the above case, the assessee has shown purchases of ₹ 27,39,410/-, sale of ₹ 28,17,207/- and GP at ₹ 94,740/-. The Assessing Officer made the addition of ₹ 27,39,407/- for bogus purchases. If the above sum is added to the GP, the GP works out ₹ 28,34,1247/- which was more than the sale itself. The Tribunal held that6 it is impossible that the GP is more than the sale itself. The Tribunal also found that the assessee has maintained the quantitative details in respect of materials purchased and sold. Considering peculiar facts of that case, the Tribunal arrived at the conclusion that it would be fair and reasonable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO in ITA No.137/Ahd/2009 and M/s. Raj Exports vs- ITO in ITA No.2801/Ahd/2008, relied on by the ld. A.R., we restrict the addition to 12.5% of the bogus purchase made by the assessee. Thus, 12.5% of ₹ 12,86,373/- i.e. ₹ 1,60,797/- is added to the income of the as instead of the addition of ₹ 12,86,373/- added by the ld. AO and confirmed by the Ld. CIT(A). The ld. AO is hereby directed to make addition, as indicated above. Thus, this ground of the assessee is partly allowed. 7. Having heard the submissions of both sides, we have been informed that the malpractice of bogus purchase is mainly to save 10% sales tax etc. It has also been informed that in this industry about 2.5% is the profit margin. Therefore, res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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