TMI Blog2018 (1) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... had rightly observed that the addition was liable to be restricted only up to the amount of profit margin involved in making of purchases of the goods from the open/grey market. We have given a thoughtful consideration to the observations of the CIT(A) and find that he had by way of a very well reasoned order restricted the addition in the hands of the assessee to the extent of the profit margin relatable to aggregate value of the purchases under consideration. We further find that no infirmity emerges on the part of the CIT(A) by adopting the profit margin at the rate of 12.5% by relying on the judgment of CIT Vs. Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) - Decided against revenue - I.T.A. No.2507/Mum/2017 - - - Dated:- 13- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds of appeal at the time and/or before the hearing of the appeal. The appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the Assessing officer be restored. 2. Briefly stated, the facts of the case are that the assessee who is engaged in the business of trading in ferrous and non-ferrous metals had filed her return of income for A.Y 2011-12 on 29.01.2011, declaring total income of ₹ 4,45,245/-. The A.O was in receipt of information from the DGIT(Inv.), Mumbai, therein intimating that as per the information received from the Sales Tax Department, Government of Maharashtra, it emerged that the assessee had made bogus purchases from the following parties during the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack unserved. The A.O again called upon the assessee to substantiate the genuineness and veracity of the purchase transactions by placing on record supporting documents, however, the assessee except for placing on record the copy of the ledger accounts and stressing on the fact that the payments towards the purchase consideration were made to the aforementioned parties vide cheques, failed to produce any other supporting documentary evidence, viz. delivery challans, lorry receipts, transportation details etc. The A.O in the backdrop of the aforesaid facts concluded that the assessee had failed to discharge the onus as stood cast upon her in respect of the genuineness and veracity of the purchase transactions, and thus concluded that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). The CIT(A) after deliberating on the contentions of the assessee in the backdrop of the facts of the case, therein concluded that it remained as a matter of fact that the assessee had failed to substantiate the genuineness and veracity of the purchases transactions which were claimed by her to have been made from the aforementioned parties, which were categorized by the Sales Tax Department, Government of Maharashtra as hawala parties. The CIT(A) however observed that though the assessee had failed to prove the genuineness and veracity of the purchase transactions claimed to have been made from the aforementioned parties, however, observed that as the corresponding sales had not been doubted by the A.O, therefore, it could safely be conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us purchases in the hands of the assessee. It was submitted by the ld. D.R that the CIT(A) had erred in restricting the addition to 12.5% of the aggregate value of bogus purchase claimed by the assessee to have been made from the aforementioned parties. It was thus submitted by the ld. D.R that the order passed by the CIT(A) may be set aside and that of the A.O be restored. 6. We have heard the ld. D.R, perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the facts of the case and are of the considered view that though it remains as a matter of fact that the assessee had not carried out any genuine purchase transactions from the aforementioned parties, but then th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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