TMI Blog2020 (4) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... e proposed question (A), therefore, does not give rise to any question of law. - R/TAX APPEAL NO. 713 of 2019 With R/TAX APPEAL NO. 714 of 2019 - - - Dated:- 25-11-2019 - Ms. Justice Harsha Devani And Honourable Ms. Justice Sangeeta K. Vishen For the Appellant : Mrs Mauna M Bhatt COMMON ORAL ORDER (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By these appeals under section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act ), the appellant revenue has called in question the common order dated 5.4.2019 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench A , Ahmedabad (hereinafter referred to as the Tribunal ) in ITA No.2377/Ahd/2015 for assessment year 2009-10 and ITA No.2378/Ahd/2015 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpute the profit on the alleged bogus purchases @ 12.5%? 3. Since the facts and contentions in both these appeals are more or less identical and the parties are also common, the same were taken up for hearing together and are decided by this common judgment. For the sake of convenience, reference is made to the facts as appearing in Tax Appeal No.713 of 2019. 4. The respondent assessee filed its return of income on 26.9.2009 declaring total income of ₹ 73,38,651/- Assessment came to be framed under sub-section (3) of section 143 of the Act on 30.3.2011, determining the total income at ₹ 93,62,451/-. Subsequently, the case was reopened on account of revenue audit objection and assessment came to be framed under section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer had information about the bogus purchases made by the assessee from the aforesaid parties, which is evident from their statements recorded by the Value Added Tax authorities, and subsequently confirmed in their affidavits filed independently, which had remained uncontroverted by the assessee. Moreover, in the assessment proceedings, the assessee submitted the details of purchases and corresponding sales but the same were not verifiable for the reason that the details were given only in respect of the said purchases made from the above parties and the sales thereof were claimed to have been made to different parties. It was submitted that in the absence of quantitative details of purchase and sales for opening and clos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) also noted that the assessee had shown consistent gross profit ratio in earlier years and the ratio of the years under appeal was also in line with the earlier years. On consideration of the overall facts, the Commissioner (Appeals), found as a matter of fact, that the assessee had consumed the material which had been purchased, but at the same time the inquiries made by the Sales Tax Department also showed that the bills issued by the above mentioned parties from whom the assessee had claimed to have made purchases were bogus. He, therefore, was of the view that these facts show that the assessee had purchased the material from the open market and obtained bills from the above mentioned parties. It was further noted that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in which the assessee was trading, were only made, but not from disclosed sources. In other words, the case against the assessee was that the purchases were made in the grey market through cash payment and some entries were obtained from certain suppliers who had not sold such goods. The court held that the said case being one of only purchase but not from disclosed sources, it would be only the profit element embodied in such purchase which could be added in the income of the assessee. The court further held that in determining whether such profit element should be estimated at the rate of 30% or 12 %, some reasonable estimation is always permissible and any question of law would hardly arise on such aspect. The Commissioner (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has found as a matter of fact that the assessee had made such purchases, but from other parties viz. the grey market. The assessee has been able to reconcile the purchases with the material used for construction in respect of different parties. The Commissioner (Appeals), after appreciating the material on record, has been satisfied that the assessee had reconciled the purchases made and the material consumed by it against which it had issued bills to the parties for whom it has done construction work. The Tribunal has concurred with the aforesaid findings of fact recorded by the Commissioner (Appeals). Thus, whether the purchases themselves were bogus or whether the parties from whom the purchases were allegedly made were bogus is esse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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