TMI Blog2017 (7) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be reduced to 8%. The AO is directed to grant relief accordingly. We may clarify that this rate has been adopted after taking into account the peculiar facts and circumstances of this case and, therefore, should not be taken as a precedent in any other case as any yardstick. With these directions, appeal filed by the assessee is partly allowed. - I.T.A. No.4931/Mum/2016 - - - Dated:- 27-2-2017 - SHRI C.N. PRASAD (JUDICIAL MEMBER), AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) For The Appellant : Shri Ratan Samal For The Respondent : Mrs Beena Santosh ORDER Per Ashwani Taneja, AM:- This appeal has been filed by the assessee against the order of Commissioner of Income-tax (Appeals)-29, Mumbai [hereinafter ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008-09 1753,925 5. Deep Metal Tube AFCPV3265P 2008-09 2040,536 TOTAL 40,60,175 Accordingly, re-assessment proceedings were initiated, during the course of which the AO asked the assessee to prove the genuineness of the aforesaid purchases and also to produce these persons for their examination by the AO. It has been mentioned in the assessment order that assessee neither filed confirmations nor produced these persons for examination. However, the assessee merely submitted that purchases were genuine since payment was made by c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Sales Tax Department that these parties have issued false bills, without delivery of goods and payment of sales tax. On examination of the facts in totality and from the submissions of the assessee, it is to be inferred that assessee has not purchased the goods from the alleged suppliers. The assessee has purchased the goods from some undisclosed parties in cash and just obtained bogus bills in fictitious names and made the payment to give a color of genuine purchases. The assessee has been unable to give any convincing or cogent explanation as to how these goods happened to come in his possession. Logical conclusion which may be drawn in such a situation is that the assessee has recorded sales in the books of accounts which ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stand taken before the AO. It was submitted that primary evidences have been submitted and it has been shown that assessee had made corresponding sales against these purchases. It was also submitted that the disallowance made by the AO @18% of purchases was quite exorbitant. The assessee also filed some additional evidences before Ld. CIT(A) in the form of challans of sales-tax, electricity bills of few months and copies of leave and licence agreements of these parties. These documents were forwarded by Ld. CIT(A) to the AO for enquiry and comments. The AO sent his remand report to CIT(A)dated 29-02-2016 wherein it was stated that these suppliers were declared hawala traders by the VAT authorities and that mere cheque payment cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information is limited to TIN, RC cancellation orders and address of the concerned parties , The AO was referring to the information provided by the appellant and not the information which he received from the DGIT(Inv.). As could be seen from the record, the information obtained by the appellant from the sales tax department and furnished during the appellate proceedings only pertains to the TIN, VAT paid challans, leave and license agreements and electricity bills. No confirmation or evidence what so ever that the purchases made by the appellant are genuine comes out from this information. Therefore it is of no relevance to decide the case, The AO has issued notices u/s.133(6) to examine the alleged suppliers but all the notices returned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee. The estimation varies with the nature of business and no uniform yardstick could be adopted. Given the facts and circumstances of the instant case, I find it reasonable to estimate the gross profit on the alleged bogus purchases at 12.5%. The appellant has already shown a GP of 2.17% On alleged bogus purchases of ₹ 47,63,757/-. The AO is directed to reduce the GP of 2.17% from the estimated G.P. of 12.5%. This ground of appeal is partly allowed. 6. We have carefully gone through the submissions made by both the sides and the peculiar facts and circumstances of the case. It is noted that undoubtedly, the assessee has been able to show that purchases made have been sold and sales have been accepted. But ..... X X X X Extracts X X X X X X X X Extracts X X X X
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