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TMI Blog2020 (12) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 (for short the 'Act'). 2. In this case, assessment was reopened on the basis of information received from the Sales Tax Department through Directorate General of Income Tax (DGIT) (Investigation), Mumbai to the effect that during the previous year the assessee had obtained bogus entries for Rs. 14,99,063/- from M/s Real Steel (India) a bogus entity, which used to provide accommodation entries without supplying goods after taking commission. Accordingly, the AO made addition of 25% of the said amount to the income of the assessee and passed assessment order u/s 143 (3) r.w.s. 147 of the Act. The assessee challenged the assessment order before the Ld. CIT (A). The Ld. CIT (A) after hearing the assessee restricted the addition to 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. DR further submitted that since the findings of the Ld. CIT (A) are contrary to the ratio laid down by the Hon'ble Apex Court in the case of N.K. Protein Ltd. Vs. DCIT in SLP (Civil) No. 769/2017 the same is liable to be set aside. 5. On the other hand, the Ld. counsel for the assessee submitted that the facts of the cases relied upon by the revenue are different from the facts of the present case. The Ld. counsel further pointed out that the Hon'ble Gujarat High Court in the case of CIT vs. Simit P. Sheth 356 ITR 451, has upheld the addition of 12.5% of bogus purchases shown by the assessee holding that in such cases only profit element embedded in such purchases could be added to the income of the assessee. The Ld. counsel further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onding sales. However, the appellant could not produce the party before the AO inspite of opportunity being given. The appellant also failed to produce delivery challans or transportation details. The onus of proving the genuineness of such purchases is on the appellant which the appellant had not been able to discharge fully. When the hawala party had admitted on oath that it had given accommodation entries only without actually supplying the goods, the genuineness of purchases made from these parties will have to be considered taking this into consideration while examining the documentation submitted by the appellant in support of its claim. The documentary evidences such as purchase bills, payments by cheques , etc. would all have been o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncluded that assessee had made purchases from grey market. Under these circumstances, the AO had no option but to make addition on estimate basis. So far as the percentage of addition is concerned the Hon'ble Gujarat High Court in the case of CIT vs. Simit P. Sheth (supra), has upheld the addition of 12.5% of the total amount of bogus purchases sustained by the ITAT holding that only profit element embedded in such purchases could be added to the income of the assessee. Since, the Ld. CIT (A) has restricted the addition to 12.5% by following the ratio laid down by the Hon'ble Gujarat High Court, we do not find any reason to interfere with the findings of the Ld. CIT (A). Moreover, the facts of the case relied upon by the Ld. DR are differ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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