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TMI Blog2019 (2) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... ore learned CIT(A) from assessment order dated 27.03.2015 passed by learned Assessing Officer (hereinafter called "the AO") u/s 143(3) read with Section 147 of the Income-tax Act, 1961 (hereinafter called "the Act") for AY 2009-10. 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- "1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) erred in (a) confirming addition of Rs. 8349395/- which is made on account of estimation of profit @ 12.50% on alleged bogus purchases of Rs. 66795161/- to the total income of the Appellant. (b) estimating rate of profit at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appreciating the facts, submission and evidences in their proper perspective, without providing copies of material used against the appellant and without providing cross examination of parties whose statement are relied upon is liable to be annulled. 5. The learned assessing officer erred in charging interest under section 234A, 234B, 234C and 234D of the Act. 6. The appellant crave leave to add, amend, alter and / or vary any of the grounds of appeal before or at the time of hearing." 3. The assessee is trader in ferrous and non-ferrous metals. The information was received by learned Assessing Officer( hereinafter called "the AO") from the DGIT(Inv.), Mumbai wherein it was stated that the information was received from the Sales Tax De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.11.2014 also stated that these parties did not existed on the given addresses. It was observed by the AO that these parties did not supplied material to the assessee but the amounts were debited to purchases account in the books of accounts to reduce taxable profit or as cover for grey market purchases for which bills were not available. This led to the addition to the income of the assessee by the AO to the tune of 12.5% of the alleged bogus purchases to the tune of Rs. 6,67,95,161/- being estimated profit embedded in these bogus purchases which as per the AO remained unverifiable , profit embedded on which as per the AO was not disclosed by the assessee in return of income filed with the revenue leading to additions to the income of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished proof of delivery, transport challans and goods inward register at godown etc either before the AO nor before him, which in the opinion of learned CIT(A) is fatal for the assessee and it can be presumed that either these purchases are non-existent or even if they did exist, they were not backed by sufficient evidence to undergo test of scrutiny. The assessee could not produce these parties before both the AO as well before learned CIT(A). Notices sent by the AO u/s 133(6) to ten out of eleven parties returned unserved and inspector had also given a report that these parties do not exist at the given addresses. The learned CIT(A) also relied upon decision of the Hon'ble Supreme Court in the case of CIT v. Daulat Ram Rawatmull (1973 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was reopened by Revenue by invoking provisions of Section 147 of the 1961 Act which was based on information received by the AO from DGIT(Inv.), Mumbai which was in-turn based on incriminating information received from Sales Tax Department, Government of Maharashtra that the assessee is beneficiary of bogus purchases from the following eleven parties who were engaged in issuing bogus bills without delivery of material , detailed as under:- ,Sr:No. Name of the Parties Amount Involved (In Rs.) 1 KIRAN SALES CORPORATION/ NIDHI IMPEX INDIA 20660024 2 SURAJ STEEL INDIA 506480 3 JINESH METAL CORPORATION 2365254 4 JACOB INDUSTRIES 5099874 5 ANIKET STEEL PVT. LTD. 6274186 6 VIGNESHWAR IMPEX 8966532 7 TYSON STEEL & TUBE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplying material. In such cases , estimation of the profits have to be undertaken which requires some guess work to assess income underlying these bogus bills which are allegedly obtained to reduce profits. The higher appellate authorities in such cases will not normally interfere unless its shown that the guess work undertaken by Revenue authorities is palpably perverse which in our considered view in the instance case as assessed by both the authorities below is very reasonable and fair and do not call for our interference .Our view is supported by the decision of Hon'ble Supreme Court in the case of Kachwala Gems v. JCIT reported in (2007) 158 Taxman 71 (SC). In our considered view , the Ld. CIT(A) has passed well reasoned appellate or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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