TMI Blog2021 (1) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... n of 25%, which is not in consonance with the judgment of the Hon ble Gujarat High Court. No merit in the contention of the revenue that the Ld. CIT (A) ought to have sustained the addition made by the AO. The cases relied upon by the Ld. AR are distinguishable on facts and the ratio laid down in the said cases are not applicable to the present case. Hence, in our considered view, the addition of 12.5% is reasonable to meet the ends of justice. We therefore, modify the findings of the Ld. CIT (A) and restrict the addition to 12.5% of the total amount of bogus purchases determined by the AO. - ITA No. 4604/MUM/2019, 3690/MUM/2019 (Assessment Year: 2010-11) - - - Dated:- 26-11-2020 - SHRI SHAMIM YAHYA (AM) AND SHRI RAM LAL NEGI (JM) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus purchases shown by the assessee. In the first appeal, the Ld. CIT (A) restricted the addition to 25% of the total amount of bogus purchases. Against the said findings of the Ld. CIT (A), the assessee and the revenue are in appeal before this Tribunal. 3. The assessee has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- 1. On the facts and circumstances of the case, and in Law, the Commissioner of Income Tax (A)-17, Mumbai erred in confirming the addition to the extent of ₹ 3,79,080/- made by the Assessing Officer on account of alleged bogus purchases. 2. The Ld. CIT (A) and AO failed to appreciate that: a) The CIT (A) and AO has merely relied on the statements and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative (DR) submitted that since the Ld. CIT (A) has restricted the addition to 25% of the total amount of bogus purchases shown by the assessee, the department has filed cross appeal challenging the action of the Ld. CIT (A). The Ld. DR further submitted that the findings of the Ld. CIT (A) are contrary to the decision of the Hon ble Supreme Court in the case of N.K. Proteins Ltd. vs. DCIT (2017) 84 taxman.com 195 (SC), therefore the same is liable to be set aside. The Ld. DR further pointed out that the assessee could neither produce the party during the assessment proceedings nor could submit any details and evidence to substantiate its contention. The Ld. DR further relied on the following judgment of the different High Courts and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation dated 30.11.2015. However, the Ld. CIT (A) found that sufficient opportunity was given by the AO to the assessee to present its case. So far as the question regarding genuineness of transaction is concerned, we do not find any cogent and convincing evidence on record to rebut the findings of the AO that the assessee had obtained bogus entries from M/s N.B. Enterprises without purchasing the goods from it. Since the assessee failed to establish the genuineness of the transaction during assessment proceedings, the AO had no option but to determine the profit from the said transaction on estimation basis. However, since the AO has not rejected the sales made by the assessee, 100% addition is not sustainable. Now the question arises whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase from the claimed supplier i.e. N B Enterprises, who had been already established hawala dealers from Sales Tax Department and investigation wing of the Income Tax Department. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in restricting the addition to 25% of bogus purchase despite upholding that the assessee could not produce primary documents before the Assessing Officer or during the appellate proceedings which can establish beyond doubt the correlation between the items purchased and then corresponding sales. 3. On the facts and in the circumstances of the case and in law, whether the Ld. CIT (A) is correct in not following the ratio of the decision of the Apex Court on the is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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