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TMI Blog2018 (4) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case and in the law the Ld. CIT(A) has erred in law as well as fact by not sustaining addition u/s 69C of the I.T. Act, 1961 amounting to Rs. 1,33,05,834/- on account of unapproved purchases from M/s. Shreeji Enterprises. 2. The Ld. CIT(A) has grossly erred in limiting the addition to the extent of 30% of the total addition i.e. Rs. 39,91,750/- out of the total addition of Rs. 1,33,05,834/- account of alleged purchases from M/s. Shreeji Enterprises, when Shri Dipak Parikh, Proprietor of the said concern has denied having any transaction with the assessee in his statement on oath recorded u/s 131 of the I.T. Act, 1961. 3. On the facts and in circumstances of the case and in the law the Ld. CIT(A) has failed to appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in the law, the Ld. CIT(A) has erred by not sustaining the disallowance of commission of Rs. 1,71,312/- and restriction the addition to 30% as this disallowance is consequential disallowance to unapproved purchase from M/s. Shreeji Enterprises." 3. The brief facts of the case are that the Assessee filed his return of income on 30.09.2011 declaring total income to the tune of Rs. 9,10,380/-. The return was processed u/s 143(1) of the I. T. Act, 1961. Thereafter, the case was selected for scrutiny under CASS. Notice u/s 143(2) of the I.T. Act dated 02.08.2012 was issued and served upon the assessee. Thereafter, the notice u/s 142(1) dated 25.07.2013 along with questionnaire was also issued and served upon the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses of personal in nature to the tune of Rs. 15,271/- was also disallowed and the total income of the assessee was assessed to the tune of Rs. 1,44,02,800/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who took into consideration the profit element embedded in the bogus purchase and upheld the addition to the extent of 30% of the bogus purchase. The assessee filed an appeal before us for the reducing of the percentage of profit embedded in the bogus purchase specifically in accordance with the gross profit shown in the preceding years and the revenue filed an appeal for addition of the whole purchases into the income of the purchase. 4. We have heard the argument advanced by the Ld. Representative of the parties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom M/s. Shreeji Enterprises is unexplained u/s 69C of the Act. No new evidence has been produced before us. The Assessing Officer added the whole purchase to the tune of Rs. 1.33 crores u/s 69C of the Act into the income of the assessee. The CIT(A) has confined the addition to the extent of 30% of the bogus purchase on estimation basis considering the profit embedded in the bogus purchase. The assessee has submitted the gross profit chart in the last preceding year which is hereby reproduced below.:- Sr. No. Year ended Sales Amount Rs. Gross Profit Amount Rs. G.P. Ratio Net Profit Amount Rs. N.P. Ratio 1 31.03.08 88,83,908/- 6,94,690/- 7.82% 2,63,764/- 2.97% 2 31.03.09 77,39,481/- 8,22,223/- 10.62% 2,80,527/- 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove. Taking into account of all the facts and circumstances of the case and the law relied by the Ld. Representative of the parties, we are of the view that the end of justice would be met if, the 12.5% of the gross profit ratio of the bogus purchase is liable to be taken into consideration. We ordered accordingly and we set aside the finding of the CIT(A) on this issue and restricted the addition of bogus purchase to the extent of 12.5% . The appeal of the assessee is hereby allowed accordingly and the appeal of the revenue is hereby ordered to be dismissed. 5. In the result, the appeal filed by the assessee is hereby ordered to be partly allowed and the appeal of the revenue is hereby dismissed. Order pronounced in the open court on 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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