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TMI Blog2017 (12) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... his consolidated order for the sake of convenience. 2. The ground raised by the assessee in this appeal is that the Ld. CIT(A) erred in sustaining the addition on account of alleged bogus purchases to the extent of 25% of the purchases; he ought to have confined the addition by taking the average gross profit of last 3-5 years to work out the gross profit for the year. Further it is stated that the Ld. CIT(A) erred in not adopting the methodology offered by the assessee. 3. Briefly stated, the facts of the case are that the assessee is the proprietor of Nehal Steel Corporation and trades in Iron and Steel. The original return of income was processed u/s 143(1). The Assessing Officer (AO) received information from the Director General of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.06.2009 of Shri Girish R. Shah, Prop. M/s Gautam Traders and M/s Sambhav Traders, (ii) dated 18.07.2011 of Shri Rajan Kumar Keshavlal Modi, Prop. M/s Bright Corporation and (iii) dated 12.07.2011 of Shri Girish F. Mehta, Prop. M/s VATS Corporation 2010-11 Deposition and affidavit (i) dated 18.07.2011 of Shri Rajan Kumar Keshavlal Modi, Prop. M/s Bright Corporation, (ii) dated 12.07.2011 of Shri Girish F. Mehta, Prop. M/s VATS Corporation, 2011-12 Deposition and affidavit (i) dated 18.07.2011 of Shri Rajan Kumar Keshavlal Modi, Prop. M/s Bright Corporation and (ii) dated 12.07.2011 of Shri Girish F. Mehta, Prop. M/s VATS Corporation From the depositions and affidavits of the above parties, the AO found that the assessee had not purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h altogether different objectives can never be the sole base for making addition of such a large amount. 6. Per contra the Ld. DR submits that the Ld. CIT(A) has rightly and reasonably estimated the profit @ 25% of the purchase price. 7. We have heard the rival submissions and perused the relevant materials on record. In the case of CIT vs. Simit P. Sheth (2013) 38 taxmann.com (Guj), the Hon'ble Gujarat High Court has held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee. That being the position, not the entire purchase price but only the profit element embedd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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