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TMI Blog2018 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in spite of giving opportunity. The Bench therefore decided to disposed of the appeals after considering the material placed on record and hearing the contentions of the learned D.R. 4. In this case, the return of income for the A.Y. 2010-11 was filed on 16.09.2010 declaring total income of Rs. 3,00,912/-. The return was processed u/s. 143(1) of the Income-tax Act, 1961. Subsequently, the AO received information from the DGIT (Inv.), Mumbai who in turn received information from the Sales Tax Department, Mumbai about some hawala entry providers. The information was that the Sales Tax Department has exercised due diligence which revealed that the assessee is involved in taking accommodation entries of bogus purchases from four parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary details like day to day stock register, copies of purchase bills, delivery challans, bank statements etc and therefore the purchases cannot be treated as bogus. However, the fact remains that the parties from whom the appellant was supposed to have made the purchases were not existing at the addresses given. Therefore, it could not be established beyond doubt that the purchases have been made from the above mentioned patties. In such a scenario, as the purchases have not been established as genuine, the AO had to estimate some profit which the assessee had failed to offer to tax. The Ld. Counsel also argued that the AO cannot hold 87.5% as genuine and 12.5% as bogus. The AO has no where certified that 87.5% of the alleged purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niform yardstick could be adopted. 4.3.2. In the case of Simit P. Sheth, the estimated profit of 12.5% has been decided by the Court, as the VAT rate there is 10% and 2.5% has been taken as the additional margin making it 12.5%. In the instant case, the VAT rate is 4% and to cover up any defect, an additional margin of 2% should be added to 4% thereby taking it to 6%. Thus, the total addition made should be restricted to 6% instead of 12.5%. The AO is directed to restrict the addition to 6% instead of 12.5% of the alleged bogus purchases made. These grounds of appeal are partly allowed." 6. Against the above order of the CIT(A) assessee is in further appeal before us. I have considered the contentions of the learned D.R. and gone throu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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