TMI Blog2016 (6) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... BC of the Act, despite the fact that in proceedings under Section 132 of the Act no material was found in relation to said two parties to warrant such additions is concerned, we are of the view that the Tribunal is justified in holding the same against the assessee and in favour of the revenue. Addition as gross profit on sales made despite the fact that the said sales had admittedly been recorded in the regular books during Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6% gross profit 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. - TAX APPEAL NO. 240 of 2003 With TAX APPEAL NO. 261 of 2003 With TAX APPEAL NO. 242 of 2003 With TAX APPEAL NO. 260 of 2003 With TAX APPEAL NO. 241 of 2003 - - - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales of ₹ 37.08 crores made by the Assessing Officer despite the fact that the said sales had admittedly been recorded in the regular books during Financial Year 1997-98 ? (2) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in holding that the Assessing Officer had rightly made additions in respect of purchases worth ₹ 1,14,78,000/- from M/s. Somnath Industries and ₹ 51,67,228/- from M/s.Krishna Marketing in assessment which has been framed u/s.158BC of the Act, despite the fact that in proceedings under Section 132 of the Act no material was found in relation to said two parties to warrant such additions ?? Tax Appeal No. 242 of 2003 Whether on the facts and in the circumstances of the case, Income-tax Appellate Tribunal was justified in retaining the addition on account of alleged bogus purchases at 25% i.e. ₹ 3 crores of the total purchases amounting to ₹ 11.99 crores? Tax Appeal No. 260 of 2003 Whether on the facts and in the circumstances of the case, Income-tax Appellate Tribunal was justified in retaining the addition on account of alleged bogus purchases at 25% i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject matter of the regular assessment and not the block assessment more particularly when no evidence was found during the course of search supporting such undisclosed income. 4.2 Mr. Shah further submitted that the Tribunal committed a grievous mistake in presuming that there was excise duty and sales tax and other taxes on oil purchased by the assessee and on the basis of such grievous error coming to the conclusion that the purchase price of the appellant would be 25% less than the market price. He submitted that the fact of the matter is there are no such taxes on oil. 4.3 Mr. Shah further submitted that the Tribunal failed to appreciate that the addition in respect of the evidence from M/s. J.D. Shroff can be made in the hands of the appellant only under Section 158BD after going through the process and procedure laid down therein and not under Section 158BC whereunder the addition can be made only on the basis of the evidence seized from the appellant and therefore the addition of ₹ 3,66,78,297/- and interest of ₹ 1,78,20,544/- under section 158BC were bad in law as it was not made on the basis of the evidence found in search on the assessee but was made on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69 of the Act is tenable in the case of peak credit in the accounts of bogus suppliers. He submitted that the quantum of such peak credit and retention of the addition has been decided by the Tribunal at 25% of the total bogus purchases on the basis of its earlier decision in the case of Vijay Proteins Ltd. 6. The Tribunal in the case of Vijay Proteins Ltd. vs. CIT has observed that it would be just and proper to direct the Assessing Officer to restrict the addition in respect of the undisclosed income relating to the purchases to 25% of the total purchases. The said decision was confirmed by this Court as well. On consideration of the matter, we find that the facts of the present case are identical to those of M/s. Indian Woollen Carpet Factory (supra) or M/s. Vijay Proteins Ltd. In the present case the Tribunal has categorically observed that the assessee had shown bogus purchases amounting to ₹ 2,92,93,288/- and taxing only 25% of these bogus claim goes against the principles of Sections 68 and 69C of the Income Tax Act. The entire purchases shown on the basis of fictitious invoices have been debited in the trading account since the transaction has been found to be bogu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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