9911796707
TMI Blog2020 (11) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... led on 25.09.2009 declaring total income of Rs. 3,41,030/-. The same was processed u/s 143(1) of the Act. On information from Sales Tax Department, a search and seizure action was taken in premises of assessee and its group concern and it was alleged that assessee is indulged in bogus purchases. Accordingly, assessment was reopened by issuing notice u/s 148 of the Act. Thereafter, AO made addition on account of bogus purchases to the assessee. 3. Aggrieved by the above order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the submission of assessee, restricted the addition 12.5% by relying on the various judgments. Accordingly, Ld. CIT(A) partly allowed the appeal of the assessee. 4. Now before us, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld. CIT(A) erred in confirming the charging of interest under section 234A, 234B 234C and 234D of the Income Tax Act 1961. 7. The Ld. CIT(A) erred in confirming the initiation of the penalty proceeding under section 271(l)(c) of the Income Tax Act 1961. 8. The Assessee craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing. 5. At the outset, Ld. AR appearing on behalf of the assessee submitted before us that assessee is not pressing Ground No. 1 to 3. With regard to ground no. 4 on account of bogus purchase, Ld. AR submitted that this ground is squarely covered by the consolidated order of Coordinate Bench of Hon'ble ITAT in ITA 2606, 2605 & 2604/Mum/2016 for AY 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases, which learned CIT(A) has rightly done. However, keeping in view the fact that the assessee was dealing in thin margin item like iron & steel and the assessee reflected Gross Profit Rate of 3.27%, we estimate the additions @2% of alleged bogus purchases of Rs. 2,18,12,572/- which comes to Rs. 4,36,251/-. The impugned order stand modified to that extent. Resultantly, the appeal stands partly allowed. 5. Facts are pari-materia the same in AYs 2010-11 & 2011-12 wherein the assessee was saddled with additions of Rs. 313.73 Lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be deleted. 10. On the other hand, Ld. DR relied on the orders passed by revenue authorities. 11. Considered the rival submission and material placed on record. We notice from the records that assessee has introduced the capital in the firm and not disclosed the proper source. It is fact that assessee is in the business for so many years. But the funds were not deposited in the bank, but introduced in the business. It is the duty of the assessee to disclose the proper source. The profit declared by the assessee is also not considerable to support the contention of the assessee. If it is private source from family or friends, it should be properly disclosed. Since, no documentary evidence or any confirmations were filed before us, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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