TMI Blog2017 (12) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... parties in AY 2009-10; ₹ 2,43,30,038/- from 20 parties in AY 2010-11 and ₹ 2,81,43,532/- from 41 parties in AY 2011-12. Having regard to the above, we direct the AO to estimate profit @ 12.5% of the above purchases for the impugned assessment years. - Decided partly in favour of assessee. - ITA No.3520/MUM/2016, ITA No.3521/MUM/2016 And ITA No.3522/MUM/2016 - - - Dated:- 11-10-2017 - SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Assessee : None For The Revenue : Mr. Jayant Kumar And Mr. Saurabh Deshpande, DR ORDER PER N.K. PRADHAN, A.M. The captioned appeals filed by the assessee are directed against the order of the Commissioner of Income Tax (Appeals)-41 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010-11 20 2,43,30,038/- 2011-12 41 2,81,43,532/- The AO, to verify the genuineness of purchases, issued notice u/s 133(6) on random basis to some parties by speed post at the address given by the assessee. The details are as under: AY Notice u/s 133(6) issued Notice u/s 133(6) served Notice u/s 133(6) returned back by the postal authorities with the remark unclaimed , not known , address in complete 2009-10 13 Parties 3 Parties 10 Parties 2010-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration From the depositions and affidavits of the above parties, the AO found that the assessee had not purchased any goods from them. The parties categorically stated that they had not done any purchase and sale of goods but had only issued the bills for earning commission. They had not prepared and/or maintained any books of accounts. In view of the above facts, the AO made an addition of ₹ 2,25,72,581/- in the AY 2009-10, ₹ 2,43,30,038/- in the AY 2010-11 and ₹ 2,81,43,532/- in the AY 2011-12 as unexplained expenditure u/s 69C of the Act. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) observed that the average G.P. ratio of the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 embedded in such purchases can be added to the income of the assessee. The Hon ble High Court has referred to a similar view taken in the case of CIT vs. Vijay M. Mistry Construction Ltd. [2013] 355 ITR 498 (Guj) and CIT vs. Bholanath Poly Fab (P) Ltd. [2013] 355 ITR 290 (Guj). As mentioned hereinbefore the assessee failed to substantiate his claim of expenditure of ₹ 2,25,72,581/- made from 30 parties in AY 2009-10; ₹ 2,43,30,038/- from 20 parties in AY 2010-11 and ₹ 2,81,43,532/- from 41 parties in AY 2011-12. We have delineated hereinbefore the facts and circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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