TMI Blog2019 (12) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the said decision, it can be safely concluded that the restriction placed by CIT(A) that the addition by estimating profit percentage at the rate of 3% on bogus purchases, is correct. Appeal of the assessee dismissed. - ITA No. 6029/Mum/2018 - - - Dated:- 29-11-2019 - Sri Mahavir Singh, JM And Sri Waseem Ahmed, AM For the Appellant : Smt. Arti Vissanji, AR For the Respondent : Shri Kumar Padampani Bora, DR ORDER PER MAHAVIR SINGH, JM: This appeal of the assessee is arising out of order of the Commissioner of Income Tax (Appeals)]-30, Mumbai [in short CIT(A)], in Appeal No. CIT(A)-30/19(2)/10300/2017-18 vide dated 16.08.2018. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase at ₹9,23,99,829/- to the return income of the assessee. 5. Aggrieved, assessee preferred the appeal before CIT(A), who restrict the disallowance at the rate of 3% of the bogus purchases by observing in Para 6.14 by following the decision in the case of CIT vs. Smith P. Seth (2013) 356 ITR 451 (Guj) by observing as under: - 6.14 Thus it is seen that the facts of the instant case are completely different and distinct then the facts of the case relied upon by the AO to estimate the profit margin at 100% of such purchases. While deciding the profit element embedded in the bogus purchase cases, Gujarat High Court adopted the profit @ 12.5% by taking the benefit derived out of the saving of taxes, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. In appellant's own case for A.Y. 2012-13, Hon'ble ITAT 'F' Bench Mumbai vide order dated 08.11.2017 has restricted the profit margin to 3% of such purchases. Accordingly, respectfully following the decision and in view of above facts of the case, I direct the AD to restrict the addition 3%, on the total purchases of ₹ 9,23,99,829/- as the profit element embedded in such purchases. Ground No. 1 of the Appeal raised on this issue is treated as Partly Allowed. Now, aggrieved assessee is in appeal before Tribunal. 6. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the Tribunal in assessee s own case in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact managed and controlled by Shri. Bhanwarlal Jain and his family members;(ii) the said concerns were only providing accommodation bills and not carrying on any genuine business transactions; and (ii) assessee had failed to substantiate the genuineness and veracity of the purchases claimed to have been made from the aforesaid parties on the basis of irrefutable documentary evidences. We have given a thoughtful consideration to the facts before us and are of the considered view that the A.O had rightly concluded that the purchases claimed by the assessee to have been made from the aforesaid dummy concerns could safely be characterized as bogus. We are of the considered view that the CIT(A) had rightly appreciated that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were claimed to have been made from the aforesaid parties. We have given a thoughtful consideration to the facts of the case and are persuaded to be in agreement with the view taken by the CIT(A). We thus being of the considered view that the CIT(A) had fairly concluded that the addition in respect of the purchases which were claimed by the assessee to have been made from the aforementioned bogus concerns, viz.(i)Mohit Enterprise; (ii) Mayur Exports; and(iii) Prime Star, were liable to be restricted to 3% of the aggregate value of the purchases, therefore, find no reason to dislodge his well-reasoned order. We thus, in the backdrop of our aforesaid observations, finding ourselves as being in agreement with the view taken by the CIT(A), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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