TMI Blog2020 (11) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case, the disallowance made by the AO is restricted to 5% of such disputed purchases correctly - Decided against revenue. - ITA NOs. 1686 And 1687/MUM/2019 - - - Dated:- 29-9-2020 - Shri C.N. Prasad, Hon'ble Judicial Member For the Assessee : None For the Department : Ms. Arju Garodia ORDER PER C.N. PRASAD (JM) 1. These appeals are filed by the revenue against different orders of the Learned Commissioner of Income Tax (Appeals) 12, Mumbai [hereinafter in short Ld.CIT(A) ] dated 27.12.2018 in restricting the disallowance to 5% of purchases of ₹.1,18,18,239/- and ₹.2,19,53,198/- for the A.Ys. 2010-10 A.Y. 2011-12 respectively, as against the entire purchases disallowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and no explanation was offered. 3. Not convinced with the submissions of the assessee the Assessing Officer treated the purchases as non-genuine and he was of the opinion that assessee had obtained only accommodation entries without there being any transportation of materials and the assessee might have made purchases in the gray market. Assessing Officer observed that assessee failed to prove the genuineness of the purchases, produce the suppliers, transportation details or receipts and also failed to furnish any third party evidence. Therefore, Assessing Officer treated purchases of ₹.1,18,18,239/- and ₹.2,19,53,198/- for the A.Ys. 2010-10 A.Y.2011-12 respectively, as non-genuine. Accordingly, Assessing Officer worked out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such situation the courts have held that addition of certain percentage of the said purchases is justified. Sanjay Oilcake Industries vs CIT 316 ITR 274 (Guj) CIT vs Bholanath Polyfab Pvt Ltd 355ITR290 CIT vs Simit P Sheth Tax Appeal 553 of 2012 Gujarat High Court 4.3 In spite of relying all the above cases and mentioning that in the cases the courts have held certain percentage of the said purchases as profit to be assessed, the AO worked out peak credit of purchases assuming the payments for the said purchases was made in cash. It is on record and the AO also accepted that the payments for the purchases was made by cheque which are reflected in the bank account. AO after taking into consideration that the hawala dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xmann.com 264 (Raj.), CIT v. Rajesh P. Soni [Tax Appeal No.1107 of 2006, dated 27-2-2012.]. 4.4 Non compliance of some of the parties may be due to the time gap and possible change in address. However, fact remains that the appellant produced bank account statement, purchase bills, etc., to prove the genuineness of the purchases. It is also a fact on record that the Assessing Officer has not doubted the sales affected by the appellant. Thus, it is logical to conclude that without Corresponding purchases being affected, the appellant could not have made the sales. Merely relying upon, the information from the Sales Tax Department the Assessing Officer could not have treated the purchases as bogus. The, appellant has brought documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeping in view the totality of facts and circumstances of the case, the disallowance made by the AO is restricted to 5% of such disputed purchases. Therefore the AO is directed to estimate the 5% of ₹ 1,18,18,239 which works out to ₹ 5,90,912 and modify the addition accordingly. Appellant gets part relief. This ground is partly allowed. 6. On a careful perusal of the order of the Ld.CIT(A) and the reasons given therein, I do not find any infirmity in the order passed by the Ld.CIT(A) in restricting the addition/disallowance to the extent of 5% of the purchases. Grounds raised by the revenue are dismissed. 7. In the result, appeals of the Revenue are dismissed. Order pronounced on 29.09.2020 as per Rule 34(4) of ITAT R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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