TMI Blog2018 (4) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 - MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO, AM For The Appellant : Shri Pramod Shingte For The Respondent : Dr. Vivek Aggarwal ORDER PER D. KARUNAKARA RAO, AM : There are five appeals under consideration filed by the Assessee and the Revenue involving assessment years 2009-10 to 2011-12. ITA No.2530/PUN/2016 is filed by the assessee against the order of CIT(A)-I, Nashik, dated 13-07-2016 for the A.Y. 2009-10. ITA Nos. 2197 2198/PUN/2016 are filed by the Revenue against the common order of CIT(A)-I, Nashik, dated 13-07-2016 for the A.Yrs. 2010-11 2011-12. Assessee has also filed Cross Objections against the appeals filed by the Revenue for the A.Yrs. 2010-11 and 2011-12 vide C.O.Nos. 37 and 38/PUN/2016. There is no cross appeal by the Revenue for the A.Y. 2009- 10. Since there are common issues involved in all these appeals they are clubbed together and are taken up for adjudication in this composite order for the sake of convenience. We shall first take up the asessee s appeal for A.Y. 2009-10. ITA No.2530/PUN/2016 Assessment Year : 2009-10 By Assessee 2. Grounds raised by the assessee read as under : 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on the information gathered from the Sales Tax department in this regard. On merits, CIT(A) after considering series of decisions eventually restricted the addition to 25% of the purchases made by the assessee by observing as under : 5.89 Thus, in my opinion the facts on record demonstrate that this is not a case of bogus purchases but a case of inflated purchases and at best from bogus parties. The AO is directed to restrict the disallowance to 25% of purchases of ₹ 18,50,403/-, i.e. (Rs.4,62,000/-). 6. Aggrieved with the order of CIT(A), the assessee is in appeal before us with the grounds extracted above. 7. Before us, Ld. Counsel for the assessee submitted that adopting 25% of the purchases made by the assessee for the year under consideration is not based on facts and the same is unsustainable when the books of accounts are not formally rejected u/s.145(3) of the Act. Further, he submitted for restricting the addition to 10% of the alleged bogus purchases. For this proposition, he relied on the decision of Pune Bench of the Tribunal in the case of M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT and others in ITA No.795/PUN/2014 and connected appeals, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first year i.e. assessment year 2009-10 has maintained quantitative details. In other words, it has the evidence of purchasing goods and its sales. In such circumstances, at best, higher gross profit rate can be applied. Following our decision in earlier orders, we hold that GP rate of 10% over and above GP declared by the assessee in its books of account, be applied to work out the additional income in the hands of assessee. The ground of appeal No.3 raised by the assessee is thus, partly allowed. Considering the same, we direct the Assessing Officer to make addition in the hands of assessee by adopting GP rate at 10% of bogus purchases declared by the assessee. Accordingly, Ground No. 2 raised by the assessee is partly allowed. Thus, the grounds raised by the assessee are partly allowed. 10. In the result, appeal of the assessee is partly allowed. Now we shall take up the appeals of the Revenue and the Cross Objections for the A.Yrs. 2010-11 and 2011-12. ITA Nos.2197 2198/PUN/2016 Assessment Years : 2010-11 2011-12 By Revenue C.O.Nos.37 and 38/PUN/2016 By Assessee ( Arising out of ITA Nos. 2197 2198/PUN/2016) Assessment Years : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 1. On the facts and in the circumstances of the case and in law, the lower authorities have erred in initiating the reassessment proceedings u/s.147 in absence of any material showing any live link with the reason to believe that income has escaped the assessment. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in estimating the Gross Profit on alleged bogus purchases @ 25% of the purchases especially in view of the fact that in principle he has accepted that the purchases are genuine under such circumstances there is no need of any estimation of Gross Profit on alleged bogus purchases. Entire addition needs to be deleted. 12. Briefly stated relevant facts for the A.Y. 2010-11 are that the assessee filed the return of income on 01-10-2010 declaring total income of ₹ 1,87,060/-. Based on the information given by Sales Tax Department, AO noticed that assessee made purchases from 3 suppliers who are suspected as bogus dealers amounting to ₹ 20,48,964/-. At the end of the assessment proceedings u/s.143(3) r.w.s. 147 of the Act, AO made addition of alleged bogus purchases to the total income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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