TMI Blog2018 (9) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee. Set aside the order of the Ld. CIT(A) and direct the AO to estimate the profit @ 12. 5% on the disputed purchases of ₹ 36, 73, 217/- and bring to tax ₹ 4, 59, 150/- in place of ₹ 36, 73, 217/- done by him. - ITA No. 1722/MUM/2017 - - - Dated:- 31-8-2018 - SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Assessee : Mr. Krunal Tate, AR For The Revenue : Mr. Abi Rama Kartikeyan, DR ORDER PER N. K. PRADHAN, AM This is an appeal filed by the assessee. The relevant assessment year is 2011-12. The appeal is directed aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are that the Assessing Officer (AO) received information from the Sales tax Deptt. , Govt. of Maharashtra that the appellant had obtained bogus purchase bills from the following three entry providers :- Sr. No. Name of party TIN Amount (Rs. ) 1. Nimesh Steels Pvt. Ltd. 27180686997V 460325 2. Ridhi Sales Corpn. 273440725515V 1834119 3. Naina Multitrade Pvt. Ltd. 27520731818V 1378773 TOTAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the ld. CIT(A). During the course of appellate proceedings, the ld. CIT(A) noticed that the GP rate, during the year under consideration, has gone down to 34. 85% as against 42. 19% shown in AY 2014-15, for which the assessee could not offer any valid explanation. The ld. CIT(A) thus arrived at a finding that the appellant has suppressed the Gross Profit by 7. 34% (42. 19% - 34. 85%). The quantum of gross profit is thus worked out to ₹ 59, 15, 213/- (Rs. 8, 05, 40, 841 x 42. 19 /100=Rs. 3, 39, 80, 180 less GP declared of ₹ 2, 80, 64, 967/-). Also the ld. CIT(A) observed that the appellant was able to have a GP @ 39. 13% in immediate next year and 42. 19% in AY 2014-15, from same business, by same management as agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly confirmed the disallowance of ₹ 36, 73, 217/-. 7. We have heard the rival submissions and peruse the relevant materials on record. In the instant case, the notices were issued by the AO u/s. 133(6)of the Act. One notice returned unserved and from the remaining two no reply was received by the AO. The AO had issued these notices in the address given by the assessee. Also we find that the AO does not dispute the sales made by the assessee. In such a context, only the profit embedded in such bogus purchases has to be estimated and brought to tax. In the case of CIT vs. Simit P. Sheth (2013) 38 taxmann. com (Guj), the Hon ble Gujarat High Court has held that where purchases were not bogus but were made from parties other than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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