TMI Blog2020 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ubt is still there, in respect of purchases claim to have made from certain parties. After considering facts and circumstances of this case and consistent with view taken by the co-ordinate bench in number of cases a reasonable amount of profit needs to be estimated of alleged bogus purchase to meet the ends of the justice. Hence, by taking into account over all facts and circumstances of this case and also, consistent with view taken by the co-ordinate bench in similar cases, we direct the Ld. AO to estimate 12.5% profit on alleged bogus purchases. - ITA No.6520 And 6521/Mum/2018 - - - Dated:- 14-2-2020 - Shri C.N. Prasad, Judicial Member And Shri G. Manjunatha, Accountant Member For the Assessee : Shri. Ishwer Prakash Rathi And Ms. Pramita Ishwer Rathi, AR s For the Revenue : Shri. Kumar Padmapani Bora, DR ORDER PER G.MANJUNATHA, Accountant Member: These two appeals filed by the assessee are directed against order of the Ld. Commissioner of Income tax (Appeals)-34, Mumbai, dated 28/08/2018 for the AY 2009-10 2011-12. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are disposed- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee in revised return filed in response to notice u/s 148 of the I.T.Act, 1961. 4. Aggrieved by the assessment order, the assesse preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has challenged the assessment proceedings, in light of certain judicial precedents, including the decision of Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd.vs CIT(2003) 259 ITR 59 and also, on the ground of change of opinion . The assessee had also challenged the additions made by the Ld. AO towards disallowances of bogus purchases, on the ground that merely on the basis of admission in statement recorded during the survey proceedings u/s 133A, additions could not be made, when the assessee has filed necessary evidences to prove purchases from those parties are genuine and also, in absence of any observations with respect to incorrectness in books of accounts or sales outside in books of account. The Ld. AO has accepted sales declared by the assessee and hence, the entire purchases cannot be treated as income under any pigment of imagination. In this regard, he relied upon various judicial precedents, including the decision of Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed appeals filed by the assesee. Aggrieved by the Ld.CIT(A) order, the assessee is in appeal before us. 6. The Ld. AR for the assessee, at the time of hearing submitted that he do not want to press ground No.1 taken by the assesee challenging validity of reassessment initiated u/s 147 of the I.T.Act, 1961 and hence, the ground No.1 of assessee appeal has been dismissed as not pressed. 7. The Ld. AR for the assessee submitted that the Ld.CIT(A) has erred in upholding the disallowances of ₹ 87,61,453/-, being total amount of purchases from alleged hawala/suspicious dealers, without considering the fact that the assessee is a trader and the sales against such purchases have not been disputed by the Ld. AO. The Ld. AR, further submitted that no doubt, the assessee has admitted of being taken accommodation bills of bogus purchases during survey operations conducted u/s 133A and also, admitted additional income in the statement recorded on oath. But, fact remains that such statement was recorded under coerce and undue influence and accordingly, he was compelled to admit additional income on the basis of advise of the survey team. The Ld. AR, further submitted that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission of additional income is on the basis of coercion and undue influence, because the assesee had himself admitted in statement recorded on oath during the survey proceedings, where it has been categorically admitted of obtained accommodation bills of bogus purchases from suspicious/hawala dealers. Therefore, the assessee cannot now claim ignorance of law, because ignorance of law cannot be a ground for seeking relief in appellate stages. The Ld. DR, further submitted that the assesee had clearly admitted additional income on account of suppression of profits for taking bogus purchase bills and accordingly, filed revised return of income and incorporated additional income offered during the course of survey. Therefore, the Ld. AO, as well as the Ld.CIT(A) have rightly rejected the claim of the assessee and hence, their order should be upheld. 9. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. It is an admitted fact that a long line of authorities established clearly that the assessee is entitled to raise additional grounds not merely in terms of legal submissions, but also additional claims not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged bogus purchases, when the assessee has filed substantial evidences before the Ld. AO during the assessment proceedings and also, such purchases are recorded in books of account, needs to be examined. It is an admitted legal position that the Hon ble Supreme Court, in the case of S. Khaderkan Sons vs CIT(supra) has categorically held that section 133A does not empowered any I.T authority to examine any person on oath, hence any such statement has no evidencery value and any admission made during the such statement cannot , by itself, be made the basis for addition. Further, the Hon ble Kolkata High Court, in the case of Mayank Poddar (HUF) vs WTO(2003) 262 ITR 633, has observed that if, in law an item is not taxable, no amount of admission or misapprehension can make it taxable. The taxability or the authority to impose tax is independent of admission. Neither, there can be any waiver of the right by the assessee and the department cannot rely upon any such admission or mis-apprehension, if it is otherwise not taxable. Further, the CBDT has issued instruction NO. 14/1955, dated 11/04/1955, where it has emphasized on the rule of the Ld. AO, while framing the assessment, as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted sales declared by the assesee for the relevant period. Hence, once sales are not disputed, the corresponding purchases cannot be treated as non genuine under any pigment of imagination and further, only the profit element embedded on such purchases needs to be taxed. This legal proposition is supported by plethora of judicial precedents, including the decision of Hon ble Gujarat High Court, in the case of Simit P. Sheth (356 ITR 451), where the Hon ble High Court categorically held that in cases of alleged bogus purchases, only profit element embedded in those purchases needs to be taxed, but not total purchases, because the findings of the authorities below was that the assessee has purchased goods from grey market and to cover-up such purchases has obtained accommodation bills from entry providers. The Hon ble Bombay High Court in the case of PCIT vs Mohommad Haji Adam Co. Ors in (2019) 104 CCH 0391, had considered an identical issue and held that purchases could not be rejected without disturbing sales in case of trader and the court further held that while arrive at conclusion the authorities should estimate gross profit rate on purchases at same rate of other genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
