TMI Blog2021 (1) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... , accordingly, appeal of the Revenue is partly allowed. - I.T.A No.1154/AHD/2017 - - - Dated:- 4-1-2021 - Shri Pawan Singh, Hon'ble Judicial Member And Dr. Arjun Lal Saini, Hon'ble Accountant Member For the Assessee : None For the Revenue : Shri Ritesh Mishra CIT(DR) ORDER PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of Learned Commissioner of Income Tax (Appeals)-3, Surat dated 17.02.2017 for the A.Y. 2012-13. The Assessee raised the following grounds of appeal: 1. On the facts and circumstances of the case and in law, the CIT(A) has erred in restricting the addition made by the AO on account of disallowance of non-genuine purchases from ₹ 4,98, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the information available in his office, he noted that some of the purchasing parties, from which the assessee has shown purchases belongs to Bhanwarlal Jain Group. Bhanwarlal Jain Group is engaged in providing accommodation entries without actual delivery of goods. The assessee has shown purchases of ₹ 2.63 crore from Ankit Exports and 2.35 Crores from Megha Gems which are managed by Bhanwarlal Jain Group. On the basis of the information available with the AO about the accommodation entries provided by Bhanwarlal Jain Group, the AO issued show cause notice to the assessee as to why bogus purchases of ₹ 4.98 crore should not be added to his total income. The assessee filed his reply dated 19.03.2015. In the reply, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.10.2020; none appeared on behalf of the assessee. Despite the fact that authority letter on behalf of the assessee of Shri Suresh Anchaliya and company CA is on record. The notice of hearing for 04.01.2020 is also served on assessee through registered post. Despite the service of notice, neither the assessee nor his representative appeared, nor is any application for adjournment filed. Therefore, we left no option except to decide the appeal after hearing submission of ld. Departmental Representative (DR) and on the basis of material available on record. 5. The learned CIT-DR for the revenue submitted that Investigation Wing, Mumbai of Income Tax Department carried extensive search and seizure action under section 132 on Bhanwarlal Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT-DR and have gone through the order of Lower Authorities. We have noted that during the assessment, the AO made the disallowance of 100% of impugned/bogus purchases, allegedly made from Bhanwarlal Jain Group Companies. 8. Before the ld.CIT(A) the assessee filed detailed submission, as recorded in para 7 of the impugned order. In the submission, the assessee stated that assessee provided sufficient evidentiary proof of purchases from Ankit Exports and Megha Diamonds consisting of account confirmation of purchased parties, copy of purchase bills, stock register, one to one mapping of purchases and subsequent sales and the correspondence sales bills. It was further stated that in reply to the show cause notice the assessee specifically st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd will become negative. No sales are possible in absence of purchases. The AO has not doubted the sales. The ld.CIT(A) after referring the various case laws i.e. Bholanath Polyfab Pvt Ltd. in ITA No.137/AHD/2009, decision of Gujarat High Court in Mayank Diamonds Pvt Ltd. (supra) noted that in identical cases the Gross Profit addition was restricted by him to the extent of 5% of GP. However, the ld.CIT(A) distinguished the fact of the present case that the assessee has Gross Profit of 1.66% of on sales. 10. We have noted that the ld.CIT(A) has not referred GP for earlier or subsequent years or Net Profit in assessee s own case. The ld.CIT(A) in a single sentence held that the assessee has merely shown Gross Profit of 1.66% of sales. In o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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