TMI Blog2020 (4) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... ha, Accountant Member For the Assessee : Shri Neel Khandelwal, AR For the Revenue : Shri Ashish Kumar, DR ORDER PER G.MANJUNATHA (A.M): These two appeals filed by the assessee are directed against separate, but identical orders of the Ld. Commissioner of Income Tax (Appeals)-30, Mumbai, dated 11/05/2018 and 30/05/2018 and they pertains to AY 2009-10 and 2011-12. Since, the facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are disposed-off by this consolidated order. 2. The assessee has raised more or less common grounds of appeal for both AY s. Therefore, for the sake of brevity, grounds of appeal filed for AY 2009-10 are reproduced as under:- 1.a) On the facts and in the circumstances of the case and in law, the Id. C1T(A) erred in confirming the addition of ₹ 7,13,462/- made by the AO to the income of the Appellant on account of profit element @ 12.5% embedded in the so called un-proved purchases of ₹ 57,07,700/- the basis of information of the Sales Tax Department about suspicious dealers after rejecting the book result u/s. 145(3). b) The Id. CITJA) failed to appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in appeal may be decided on merits. The Ld. DR, on the other hand did not opposed application filed by the assessee. 4. Having heard both the parties and considered, the reasons given by the assessee for not filing appeals in time, as prescribed under the Act, we deem it appropriate to condoned the delay in filing appeals for both AY s and admit the appeal for both years to decide the issues on merits ITA No.469/Mum/2019 5. The brief facts of the case are that the assessee is an individual engaged in the business of trading in ferrous and non ferrous metals, under the name and style of M/s Parag Metals, filed his return of income for AY 2009-10 on 26/09/2009, declaring total income of ₹ 9,43,950 and such return was processed u/s 143(1) of the Act. The case has been subsequently reopened u/s 147 of the Act, on the basis of information received from DGIT, investigation, Mumbai, as per which, Sales Tax Authorities of Government of Maharashtra had taken actions against number of Hawala dealers, who had issued bogus purchase bills to various parties in Mumbai and other places. As per list of beneficiaries, the assessee is one of the beneficiary, who had taken accom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %, Taking into account the above fads, the Hon'ble Gujarat High Court held that since the purchases were not bogus, but were made from parties other than those mentioned in books of accounts, only the profit element embedded in such purchases could be added to the assessee's income and as such no question of law arose in such estimation. While arriving at the above conclusion, the Hon ble Court also relied on the decision in the case of Vjjay M, Mistry Construction Ltd, 355 ITR 493 (Guj) and further approved the decision of Ahmadabad Bench, ITAT in the case of Vijay Proteins 53 1TD 9.10 As the AO concluded that the appellant has not purchased from those parties, but considering the facts of the case that the goods have been sold and the assessee offered the profit on sale for taxation, treated the purchases are from the grey market at a lower price which carries higher margin of profit than the one offered to tax. In the decision of Hon ble Gujarat High Court in the case of CIT vs, Simtt Sheth 356 ITR 451 (Guj) wherein also it is found that some of the alleged suppliers of steel to the assessee had not supplied any goods but had only provided sale bills and hence, purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the backdrop of clear finding by the Sales Tax Department, Maharashtra that those parties are involved in providing accommodation entries without actual delivery of goods. The Ld. AO had also taken support from the investigation conducted during the course of assessment proceedings, as per which notice issued u/s 133(6) to the parties were returned un-served by the postal authorities. Therefore, he came to the conclusion that purchases from the said parties are bogus in nature. It is the contentions of the assessee before the lower authorities that purchases from the above party are supported by necessary evidences. It has furnished all possible evidences, including books of accounts; stock details and bank statement to prove that payment against said purchases have been made through proper banking channels. 8 Having considered arguments of both the parties and also, material available on record, we find that both the sides have failed to prove the case in their favour with necessary evidences. Although, assessee has filed certain basic evidences, but failed to file further evidences to conclusively prove purchases to the satisfactions of the Ld.AO. At the same time, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails about gross profit declared for normal purchases. Under thse facts, we reject the case law cited by the ld. AR for the assessee. Therefore, considering facts and circumstances of this case and consistent with view taken by the Co-ordinate Bench in number of cases, we are of the considered opinion that the ld. AOP as well as the ld. CIT(A) have taken fairly reasonable view and estimated 12.50% profit of alleged bogus purchases. We, therefore are of the view that there is no reason to interfere with orders of the CIT(A) and hence, we are inclined to uphold order of the ld. CIT(A) and dismiss appeal filed by the assessee. 9. In the result, appeal filed by the assessee for AY 2009-10 is dismissed. ITA No.470/Mum/2019 for AY 2011-12:- 10. The facts and issues involved in this appeal are identical to the facts and issues, which we had considered in ITA No. 469/Mum/2019 for AY 2009-10. The reasons given by us in preceding paragraphs in ITA No. 469/Mum/2019 for AY 2009-10 shall mutatis mutandis apply to this appeal, as well. Therefore, for similar reasons, we dismiss appeal filed by the assessee for AY 2011-12. 11. In the result, appeals filed by the assessee for bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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