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TMI Blog2020 (10) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... . Brief facts of the case are that the assessee company engaged in the business of manufacturing moulds and dies, filed its return of income for the assessment year under consideration declaring total income of Rs. 48,65,750/-Since the case was selected for scrutiny, the AO issued notice u/s 143 (2) and 142 (1) of the Act. In response thereof, the authorized representative of the assessee company furnished the details and discussed the case. It was noticed during the assessment proceedings that the assessee had taken accommodation bills showing purchase of Rs. 2,03,503/- from M/s Vardhman Traders which was one of the 'hawala' dealers as per the list issued by Sales Tax Department, state of Maharashtra. Accordingly, AO asked the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (A) erred in confirming the initiation of the penalty proceeding under section 271 (1) (c) of the Income Tax Act, 1961." 4. The Ld. counsel for the assessee submitted before us that the Ld. CIT (A) has wrongly confirmed the addition made by the AO on the basis of information received from the Sales Tax Department, Maharashtra, alleging that during the year relevant to the assessment year under consideration the assessee obtained accommodation entries from M/s Vardhman Traders, a Hawala dealer. The Ld. counsel further contended that the AO has not conducted any enquiry to verify the contention of the assessee that the purchases are genuine. The Ld. counsel further submitted that assessee has furnished purchase bills along with delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court in the case of Pr. CIT vs. Jakharia Fabric (P) Ltd. (2020) 118 taxmann.com 406 (Bombay), Pr. CIT vs. Rishabhdev Technocable Ltd. (2020) 115 taxmann.com 333 (Bombay) and Pooja Paper Trading Co. (P) Ltd. vs. Income Tax Officer (2019) 104 taxmann.com 95 (Bombay) to fortify his arguments. 7. We have heard the rival submissions of the parties and perused the material on record including the cases relied upon by the parties. The assessee has challenged the impugned order alleging that the AO has passed the assessment order on the basis of information received from the Sales Tax Department Maharashtra, without conducting any enquiry; the assessee was not given an opportunity to cross examine the witnesses whose statements were reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below. I have also deliberated on the various judicial pronouncements referred to by the lower Authorities in their respective orders as well as cited by the learned A.R. during the course of hearing before me. From the record I found that on the information from Sales Tax Department the AO had added the entire purchases in assessee's income. The gross profit shown by the assessee in the respective years are as under:- A.Y. 2009-10 - 16.47% A.Y. 2010-11 - 12.75% A.Y. 2011-12 - 14.88% I also found that the assessee has paid VAT on the goods so purchased. Looking to the gross profit ratio declared by the assessee it is clear that the assessee has shown very reasonable gross profit ratio in all the years under consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he preceding assessment year. The facts and the issues involved in the present case are identical to the facts and the issues involved in the case of M/s Abhijeet Plastic India Pvt. Ltd. (supra), and the coordinate Bench has directed the AO to make addition to the extent of shortfall to make the gross profit to 15%. On the other hand, in the cases relied upon by the Ld. DR the Hon'ble High court has held that in the cases of bogus purchases not the entire amount of bogus purchases but only profit embedded in such transaction should be added to the total income of the assessee. Since, the facts of the present case are similar to the facts of the case of M/s Abhijeet Plastic India Pvt. Ltd. (supra) and the issues involved in both the cases ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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