TMI Blog2020 (8) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... gus purchases. In this case, considering the nature of business of the assessee the Ld. AO has made 12.50% additions, which has been affirmed by the ld. CIT(A) on total alleged bogus purchase. Both authorities have taken uniform 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. Rate of profit adopted by the AO is appears to be on higher side when compared to nature of business of the assessee. Therefore rate profit adopted @ 12.50% on alleged bogus purchases is on higher side going by the nature of business of the assessee and hence, we order the Assessing Officer to restrict the addition at the rate of 5% on alleged bogus purchases. Appeal of the assessee is partly allowed. - ITA No. 1647/Mum/2019 - - - Dated:- 16-6-2020 - Sri Mahavir Singh, VP And Sri Manjunatha G, AM For the Appellant : None For the Respondent : Shri Akhtar Ansari, DR ORDER PER MAHAVIR SINGH, VP: This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-30 [in short CIT(A)], Mumbai, dated 19.09.2018 and it pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), after considering relevant submission of the assessee and also, by following the decision of Hon ble Gujarat High Court, in the case of CIT vs. Simith P. Sheth (356 ITR 451), sustained the addition made by the AO towards alleged bogus purchases to 12.50% gross profit on total purchases from those parties. The relevant findings of the Ld.CIT(A) are as under: 5. I have given my careful consideration to the material on record and duly considered the factual matrix of the case as also the applicable legal position for arriving the following decision. 6. It is seen from the assessment order that even after giving sufficient opportunity by Assessing Officer, the assessee could not substantiate his claim of genuine purchases from 10 parties from whom accommodation entries were obtained. During the course of appellate proceedings, even after affording opportunity for 4 times, appellant could not made any submissions nor attend the hearing in person or through A.R. to present his case, hence appeal is decided on merits of the case. 7. The ground No.1 is against the reopening of the case of the appellant. 7.1 Re-assessment proceedings for the year under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sec 147, for issue of notice under section 148, and passing the reassessment order are satisfied for the year under appeal. Resultantly, Ground No.1 of the appeal is Dismissed . 8. The Ground No.2 is against the addition of estimated profit 12.5% in respect of non-genuine purchase from 10 parties amounting to ₹ 1,03,51,101/-. Contentions of the appellant against the addition made in the ground are that on the facts and circumstances of the case and in law Assessing Officer erred in estimating profit @12.5% on alleged non genuine purchases of ₹ 1,03,51,101/- and thereby added to the total income of the appellant. 8.1 I have carefully considered the rival contentions of the issue on hand. In making addition, Ld. AO relied on the deposition and affidavit by the some of the entities before the Sales Tax Authorities as per which they have stated to have only given bogus bills without supplying any goods. The Sales Tax Department has conducted independent enquiries in each of the hawala parties and conclusively proved that these parties are engaged in the business of providing accommodation entries only. Therefore, the Assessing Officer considering the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 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. 7. Having considered arguments of ld. DR 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. AO had also failed to take the investigation to a logical conclusion by carrying ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
