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TMI Blog2017 (9) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant prays that the following grounds be decided independent of and without prejudice to each other: 1. The Learned Income Tax Officer 16(3)(3) (hereinafter referred to as the "ITO") erred and Hon'ble CIT (A) erred in confirming the addition of Rs. 35,25,867/- for Assessment Year 2010-11 being the purchases considered as "Bogus Purchases". 2. Your appellant submits that on the facts and the circumstances of the case, the ITO and Hon'ble CIT(A) ought not to have made addition of Rs. 35,25,867/- for Assessment Year 2010-11 and have failed to appreciate and ought to have held that: (a) Learned ITO had mentioned in its order that purchases are from bogus dealers as per information received from sales tax authority of Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement register, which can be produced. How Appellant can be held responsible for non maintenance of records by those parties. (e) Appellant also would like to submit that, Learned ITO had a presumption that, the parties which are mentioned in the suspicious dealers list in the sales tax website are bogus dealers. Appellant would like to state that, presumption cannot be a ground for disallowance and taking it as evidence. Also, it is worth to be not-d that Sales tax authorities have declared them as "Suspicious Dealers" and not "Bogus Dealers". Suspicion of highest degree cannot take place of evidence. The List of Bogus dealers is separately hosted on the website of the Sales Tax authorities, wherein said parties are not there. (f) Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.54% A.Y. 2008-09 5.62% A.Y 2007-08 7.04% A.Y 2006-07 7.06% It can be seen from above that the Gross Profit ratio over the year was stable and no major deviation were notice. The Appellant prays that Learned ITO be directed to delete the adjustments made in purchases. 3. Without prejudice to the above, if at all the additions are made; the same should be on the basis of factual Gross profit of the respective years and not on the basis of ad-hoc percentage of Purchases. The Appellant prays that, addition should be restricted to the factual Gross profit ratio of respective years and not at ad-hoc percentage of 12.5%. 4. Your appellant crave leave to add to, amend, alter, vary, omit or substitute the aforesaid grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said information the aforesaid three parties were in the list of parties, who were issuing 'hawala bills or accommodation entries'. Accordingly, the Assessing Officer assessed an amount of Rs. 35,25,867/- as unexplained expenditure under section 69C of the Act. The CIT(A), in principle accepted the stand of the Assessing Officer but noted that the appellant was engaged in making supplies to the Government Departments and the sales were accepted by the Assessing Officer and, therefore, the Assessing Officer could not have made addition of the total value of purchases as bogus. The CIT(A) referred to the judgments of the Hon'ble Gujarat High Court in the case of Bholanath Poly Fab Pvt. Ltd., 355 ITR 290 (Guj), Sanjay Oil Cake Ind. 316 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit is accepted on the trading of similar items, the estimation made by the CIT(A) at 17.50% is also not justified. 7. On the other hand, Ld. Departmental Representative relied upon the order of CIT(A) in support of the Revenue. 8. I have considered the rival stands and noticed that the primary dispute in this appeal revolves around the level of profit estimated by the CIT(A) with respect to the alleged unproved purchases. Though the CIT(A) has referred to the estimation of profit ranging from 12.50% to 25%, so however, he has not given any particular reason as to why he has resorted to the estimation @17.50%. On the contrary, in similar situations, the Mumbai benches of the Tribunal have estimated the profit @ 12.50% in the case of sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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