TMI Blog2021 (1) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Ld. CIT(A) and direct the AO to estimate profit @ 4% on the disputed purchases and make an addition accordingly. - ITA No. 4111/MUM/2019 - - - Dated:- 18-1-2021 - SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) Revenue by : Mr. Brajendra Kumar, DR Assessee by : Mr. B.P. Purohit, AR ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the Revenue. The relevant assessment year is 2010-11. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-20, Mumbai [in short CIT(A) ] and arises out of the assessment completed u/s 143(3) r.w.s. 147 the Income Tax Act 1961, (the Act ). 2. The grounds of appeal filed by the Revenue read as under : 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to notice u/s 148 of the Act. During the course of reassessment proceedings, the AO issued notice u/s 133(6) dated 01.09.2015 to Jay Enterprises in the address given by the assessee for verification of the transaction. This was followed by a reminder dated 11.12.2015 to Jay Enterprises. However, there was no response from Jay Enterprises. By the said notice u/s 133(6), M/s Jay Enterprises was requested by the AO to furnish the following information/details/documents : 1. Copies of Income Tax Returns, computation of income, Balance Sheet and Profit Loss account with Annexures and Schedules thereto for the A.Y. 2010-11. 2. Purchase orders, invoices, lorry receipts, check post entries, gate entries, goods receipt notes, issue of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above party. However, the AO was not convinced with the above reply of the assessee on the ground that as per the information received from the Sales Tax Department, Government of Maharashtra, the assessee had obtained bogus purchase bills amounting to ₹ 15,10,144/- from M/s Jay Enterprises and therefore, estimated the profit @ 12.5% on the disputed purchases of ₹ 15,10,144/-, which comes to ₹ 1,88,768/-. Accordingly, the AO made an addition of ₹ 1,88,768/- to the income shown by the assessee. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that vide order dated 28.03.2019, the Ld. CIT(A) deleted the disallowance of ₹ 1,88,768/- made by the AO by ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed. 5. Before us, the Ld. Departmental Representative (DR) relies on the judgment of the Hon ble Bombay High Court in Pr. CIT v. Jakharia Fabric (P.) Ltd. (2020) 118 taxmann.com 406 (Bom) and submits that in the facts and circumstances of the case, the AO has rightly estimated the profit @ 12.5% on the disputed purchases of ₹ 15,10,144/- and made an addition of ₹ 1,88,768/-. On the other hand, the Ld. counsel for the assessee relies on the order of the Ld. CIT(A) and submits that the same be affirmed. 6. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In Jakharia Fabric (P.) Ltd. (supra), it is held by the Hon ble Bombay High Court tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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