TMI Blog2019 (1) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... ew, is on the higher side. The learned A.R.submitted that the VAT rate applicable to the impugned purchases is 12.5%. Accordingly, by following the ratio rendered in the case of Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) we modify the order passed by the learned CIT(A) and direct the AO to sustain the addition to the extent of 15% of the value of alleged bogus purchases. Appeal filed by the assessee is partly allowed. - ITA No. 1541/Mum/2017 - - - Dated:- 1-10-2018 - Shri B.R. Baskaran, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : Ms. Dinkle Hariya For the Respondent : Shri Nishant Samaiya ORDER PER B.R. BASKARAN, AM This appeal filed by assessee is directed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame to the total income of the assessee. 3. In the appellate proceedings, the learned CIT(A) took the view that the profit element embedded in the transactions of purchase should be assessed. For this purpose he took support of the decisions rendered by the Hon'ble Gujarat High Court in the case of Vijay Proteins Ltd. vs. CIT(2015) 58 taxmann.com 44 (Guj) and CIT vs. Simit P. Sheth (2013) 356 ITR451 (Guj). The learned CIT(A) took the view that the profit element embedded in the purchases can be estimated at 30%. Accordingly he sustained the addition to the extent of 30% and granted partial relied. Still Aggrieved, assessee has filed this appeal before us. 4. The learned A.R. submitted that the assessee has asked for reasons for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Simit P. Sheth 356 ITR 451 has sustained the addition to the extent of 12.5%. The learned D.R. submitted that 12.5% estimated by the Hon'ble Gujarat High Court included profit element of 2.5%. 7. Having heard the rival submission, we are of the view that the profit element embedded in the impugned purchases are required to be assessed in the hands of the assessee, as the assessee has failed to furnish the stock register and also evidence for receipt and consumption of materials. Since the assessee has exported materials, the receipt of materials cannot be doubted. The possibility is that the assessee might have purchased materials from one party and obtained bills from another party. Accordingly the profit element embedded in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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