TMI Blog2020 (11) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance to the extent of 6.5% of the purchases. Grounds raised by the revenue are dismissed. - ITA NO. 1033/MUM/2019 - - - Dated:- 29-9-2020 - Shri C.N. Prasad, Hon'ble Judicial Member And Shri Rajesh Kumar, Hon ble Accountant Member For the Assessee : None For the Department : Ms. Arju Garodia ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the revenue against the order of the Learned Commissioner of Income Tax (Appeals) 5, Mumbai [hereinafter in short Ld.CIT(A) ] dated 27.08.2018 for the Assessment Year 2009-10. 2. Revenue has raised the following grounds in its appeal: - 1. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in restricting the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocessed u/s. 143(1) of the Act. Subsequently, Assessing Officer received information from the DGIT(Inv.), Mumbai about the accommodation entries provided by various dealers as referred in the Assessment Order and assessee was also one of the beneficiary from those dealers. The assessment was reopened U/s. 147 of the Act based on the information received from DGIT(Inv.), Mumbai, that the assessee has availed accommodation entries from three parties namely M/s. Smeeta Impex Pvt. Ltd., M/s. Yoam Metallic Trading Pvt. Ltd., and M/s. Saurav Metal Tools Impex which are said to be providing accommodation entries without there being transportation of any goods. In the reassessment proceedings, the assessee was required to prove the genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below. On a perusal of the order of the Ld.CIT(A), we find that the Ld.CIT(A) considered this aspect of the matter elaborately with reference to the submissions of the assessee and the averments in the Assessment Order and restricted the disallowance to 6.5% of the non-genuine purchases. While holding so the Ld.CIT(A) observed as under: - 4.3. Decision: I have considered the facts of the case and submissions of the appellant. In this case, the AO received information from the DGIT(Investigation), Mumbai that the assessee had entered into hawala transactions for purchases total amount of ₹ 74,74,120/- from the three parties namely Smeeta Impex P. Ltd., Yoam Metalilic Trading P. Ltd. and Saurav Metal Tools Impex P. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in issuing hawala bills and no goods were ever supplied by them. In this regard, the AO made an addition of ₹ 9,34,265/ @12.5% of total purchases on the estimation basis of profit embedded in the bogus purchase. The assessee has objected to the addition and submitted that the expenditures incurred on purchases were duly accounted in the books of account of the appellant and it had furnished all the required documents before the AO to show that the total purchases amounting to ₹ 74,74,120/ are genuine. In this case, it appears that the ' assessee could riot substantiate its claim with supporting documents although the onus of the proof is on the assessee. It is also submitted that the AO has not considered the submission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered opinion, applying the logic of the above said case the profit percentage embedded on such purchases is restricted to 6.5% (i.e. 4% of VAT levied + 2.5 % towards profit margin) that will meet the ends of the justice. Taking all the facts into consideration and applying the logic of Simit P. Sheth case, the AQ is directed to restrict the estimation (oj 6.5% on the rion genuine purchases of ₹ 631,22,978/-. Appeal on grounds no. 1 and 2 are treated as partly allowed In view of the above decision of Ld. CIT(A) in the assessee's own case for AY 2011-12, facts and circumstances of the case, the AO's estimation of profit on the impugned purchases @12.5 is-not justified. Hence, taking all the facts into consideration, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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