TMI Blog2018 (5) TMI 2010X X X X Extracts X X X X X X X X Extracts X X X X ..... stances and that could be on the basis of estimation by adjusting the existing gross profit on the bogus purchases already declared by the assessee, which are amounting to 3,45,771/-. We also found that assessee has also paid to Sales Tax Department a sum of ₹ 5,22,266/- and after taking into consideration, both the above figures, the additions which are required to be upheld to the tune of ₹ 2,28,819/- as per the chart submitted by the assessee. Therefore, we are inclined to modify the orders passed by Ld. CIT(A) and to restrict the additions to the extent of 2,28,819/- of such purchases. Appeal filed by the assessee is partly allowed. - I.T.A. No. 6769/Mum/2017 - - - Dated:- 4-5-2018 - Shri R. C. Sharma, AM And Shri Sandeep Gosain, JM Appellant by: Shri Vimal Punmiya Respondentby: Ms. N. Hemalata ORDER Sandeep Gosain, The present Appeal filed by the assessee is against the order of Commissioner of Income Tax (Appeals)-29, Mumbai dated 31.10.17 for AY 2011-12 on the grounds mentioned herein below:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming addition of ₹ 13,06,000/ - on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of parties alongwith extract of bank statement showing that the payments had been made to the parties through banking channel. It was further submitted by Ld. AR that the material purchased by the assesse is genuine but the AO disallowed the purchases made from the above parties and levied tax by wrongly estimating GP @ 12.5% on purchases from the above 5 parties. It was further submitted that additions @ 12.5% on the purchases would shot up the GP @ 14.59% as assessee had already disclosed GP @ 2.09%, therefore such high GP is abnormal and not feasible. Hence, the estimation of GP passed by the revenue authorities is on surmises and conjecture and therefore is liable to be set aside. 5. On the other hand Ld. DR relied upon the orders passed by revenue authorities. 6. We have heard counsels for both the parties and have also perused the material placed on record as well as the orders passed by revenue authorities. 7. Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above ground raised by the assessee in para no. 4(4.1 to 4.3.2) of its order. The operative portion of the order of Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the suppliers before the AO to verify the purchases. In this regard we found that many Benches of ITAT and Hon'ble High Courts have held that when purchases are supported by sufficient documentary evidences then merely because of non-appearance before the AO, one cannot conclude that the purchases were not made by the assessee. Several decisions cited in support of the said argument are Nikunj Eximp Enterprises (P.) Ltd. v. CIT 216 Taxman 171 (Bom.), CIT v. Nangalia Fabrics (P.) Ltd. 220 Taxmann 17 (Guj.), CIT v. M.K. Bros. 163 ITR 249 (Guj.), Asstt. CIT v. Akruti Dyeing Printing Mills (P.) Ltd. [Tax Appeal No. 997 of 2008, dated 27/01/2009],CIT v. Veekay Prints (P.) Ltd. [Tax Appeal No. 2557 of 2010, dated. 1/2/2012], Diagnostics v. CIT 334 ITR 111 (Cal.), ITO v. Totaram B. Sharma [Tax Appeal Nos. 1344/2008 1355/2008, dated 9-2-2010], Dy. CIT v. Adinath Industries [2001] 252 ITR 476 (Guj.), CIT v. Precious Jewels Corpn. 17 taxmann.com 264 (Raj.), CIT v. Rajesh P. Soni [Tax Appeal No.1107 of 2006, dated 27-2-2012. 9. On identical facts and circumstances, the Hon'ble Jurisdictional High Court as well as the Tribunal, Mumbai Bench, has deleted the addition made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has brought documentary evidences on record to prove genuineness of such transactions which are not found to be fabricated or non-genuine, the action of the Assessing Officer in ignoring them cannot be accepted. When the payment to the concerned parties are through proper banking channel and there is no evidence before the Assessing Officer that the payments made were again routed back to the assessee, hence the additions were made by the AO on estimation @ 12.5% of the bogus purchases and the said order was also upheld by Ld. CIT(A). We further notice that AO made no efforts to check the bank accounts of the suspected parties to find the track of money paid, whether it was received back by the assessee. Even the statements recorded by the Sales Tax Department and the material collected by I.T. Department had not been made available to the assessee. The I.T. Act 1961 is a self contained code and the assessment has to be framed as per the letter and spirit of said I.T. Act 1961. While making such assessment, the AO is duty bound to examine all records and evidences are to be examined and a rationale judgment has to be formed thereon, which is lacking in the present case. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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