TMI Blog2020 (6) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. But, profit rate can be estimated on some basis as in the state of Gujart VAT is at 8%, whereas in Maharashtra it is 4 to 6% varies from item to item. Going by the fact that this material might have been purchased by assessee from grey market at a lower purchase price some element of profit is earned. A reasonable estimate can be made. Hence, estimate the profit rate at the rate of 8% of the bogus purchases and direct the Assessing Officer to recompute the income accordingly. - ITA No.1854/Mum/2019, ITA No.1855/Mum/2019, ITA No.1856/Mum/2019 - - - Dated:- 15-6-2020 - Sri Mahavir Singh, Vice President For the Appellant : None For the Respondent : Shri Akhtar H. Ansari, DR ORDER PER MAHAVIR SINGH, VP: The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellant including the stock records and corresponding sales reflected in the books of accounts of the appellant. 3. The CIT (A) has failed to appreciate that the impugned disallowance is in violation of principle of natural justice since the appellant has not been provided with the material used against him and also cross examination of the alleged suspicious dealers. 4. Without prejudice to the above, the CIT (A) has erred in estimating the profit margin at 12.5% and thereby confirming the disallowance to that extent in the case of the appellant. 5. In view of the above, the appellant prays that the impugned disallowance shall be deleted / reduced to a reasonable level considering the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the above parties and is of the view that these concerns are engaged in providing bogus bills accommodation entries and assessee is one of the beneficiaries who has made above purchase of ₹ 64,79,583/-. The assessee submitted the complete details and furnished all relevant evidences to establish that goods have actually been delivered / supplied and also furnished the books of account, the stock register and evidence regarding payment made through account payee cheque like bank statement etc. but according to Assessing Officer, the assessee could not produce the details of transportation like transportation receipts delivery challans or lorry receipts. Accordingly, The Assessing Officer was of the view that these purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne to one consumption pattern of alleged purchase items, confirmation from the parties concerned etc could not be submitted before the A.O. Nor the Principle Officers of these concerns were produced before the A.O. for examination. However, it is also a fact that the A.O. has not questioned the total sale component and if there is a sale, there should be purchase. The appellant being a trading concern has indulged in using such accommodation entry. As evident from catena of judgments on bgus purchases, only the benefit derived by using such accommodation entries has to be brought to tax. The advantages from using such bogus bills are in the form of saving VAT, saving of transportation charges and various taxes etc. The A.O. h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 6% varies from item to item. Going by the fact that this material might have been purchased by assessee from grey market at a lower purchase price some element of profit is earned. Hence, a reasonable estimate can be made. Hence, I estimate the profit rate at the rate of 8% of the bogus purchases and direct the Assessing Officer to recompute the income accordingly. 6. Similarly, in ITA NOs. 1855 1856/Mum/2019 for Assessment Year 2011-12 2010-11 respectively, wherein the facts and circumstances are exactly identical and hence, taking a consistent view in these two appeals also, I estimate the profit rate at the rate of 8% and Assessing Officer is directed accordingly. The appeals of assessee are partly allowed as indicated above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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