TMI Blog2020 (4) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... les Tax Department. In the case of CIT vs Simith P. Sheth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] had considered a similar issue and held that at the time of estimation of profit from alleged bogus purchases no uniform yardsticks could be adopted, but it depends upon facts of each case. Although, both authorities have taken different rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. Assessee is into the business of trading in Ceramic Tiles and other products - we are of the considered view that the CIT(A) has taken a fair view and estimated 12.50% gross profit on alleged bogus purchases to settle dispute between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court in SLP No. CC No. 769 of 2017 dated 16.01.2017, by dismissing the SUP of that assesse. iii. The appellant prays that the order of the Ld.ClT(A) on the above grounds be set aside and that of the AO be restored 3. The brief facts of the case are that the assessee is an individual and carrying on the business of trading in Ceramic Tiles, decorative tiles, Stones, Marble Granite, under two proprietary concerns in the name of M/s Adinath Impex and M/s Shailesh Enterprise. The assessee has filed his return of income for AY 2009- 10 on 29/09/2009, declaring total income of ₹ 3,71,220/- and said return was processed u/s 143(1) of the I.T.Act, 1961. The case has been subsequently reopened u/s 147 of the Act, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom those parties. The relevant findings of the Ld.CIT(A) are as under:- 4.1 I have considered the assessment order and the submissions of the appellant. The AO he'd that the appellant produced the details with regard to purcha.ses made from the parties including copy of bank statement indicating the payment made to the seller parties. It is noticed that on account of non availability of the suppliers at the given address and non production of transportation bills, the AO added 100% bogus purchases as unexplained expenditure under section 69C of the Act, Section 69C reads. Where in any financial year an assesses has incurred any expenditure and he offer, no explanation about the source of such expenditure or part there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. CIT v. Adinath Industries [2001] 252 ITR 476 (Guj,), CIT v- Precious Jewels Corpn.17 taxmann.com 264 (Raj.), CTT v. Rajesh P, Soni [Tax Appeal No. 1107 of 2006, dated 27-2-2012.]. 4.3 Though, the appellant was not able to produce the concerned parties before the Assessing Officer, fact remains that the appellant produced bank account statement, purchase bills, etc., to prove the genuineness of the purchases. It is also a fact on record that the Assessing Officer has not doubted the sales affected by the appellant. Thus, it rs logical to conclude that without corresponding purchases being affected, the appellant could not have made the sales. Relying only on the information received from the Sales Tax Department the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO is directed to modify the addition accordingly and the appellant gets part relief. This ground is partly allowed. 5. None appeared for the assessee. We have heard the Ld. DR, perused the material available on record and gone through orders of the authorities below. We find that the Ld. AO has made 100% addition on alleged bogus purchases on the ground that the assessee is one of the beneficiary of accommodation entries of bogus purchase bills issued by Hawala dealers. According to the Ld. AO, although assesee has filed certain basic evidences, but failed to file further evidence in the backdrop of clear finding by the Sales Tax Department, Maharashtra that those parties are involved in providing accommodation entries without actu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Courts and Tribunals had considered an identical issue in light of investigation carried out by the Sales Tax Department and held that in case of purchases claims to have made from alleged hawala dealers, only profit element embedded in those purchases needs to be taxed, but not total purchase from those parties. The Hon ble Gujarat High Court, in the case of CIT vs Simith P.Sheth 356 ITR 451 had considered a similar issue and held that at the time of estimation of profit from alleged bogus purchases no uniform yardsticks could be adopted, but it depends upon facts of each case. The ITAT, Mumbai, in number of cases had considered an identical issue and depending upon facts of each case, directed the Ld.AO to estimate gross profit of 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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