TMI Blog2021 (2) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2010-11 and 9.68% in assessment year 2011-12. It is also a fact that as per industry norms the profit rate on the goods traded is normally between 2% to 4%. Considering the fact that the assessee was not able to prove the source of purchase and also keeping in view the gross profit declared by the assessee, disallowance @ 4% of the non-genuine purchases would be fair and reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in ferrous and non-ferrous metals. For the assessment years under dispute, the assessee had filed its returns of income in the regular course. The returns of income filed by the assessee were initially processed under section 143(1) of the Act. Subsequently, on the basis of information received from the Sales Tax Department and DGIT (Inv.), Mumbai, that purchases worth ₹ 84,37,391, in as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years relying upon the decision of the Hon'ble Gujarat High Court in CIT vs. Simit P. Sheth, [2013] 356 ITR 451 (Guj.). Accordingly, he made disallowance of ₹ 10,54,674, in assessment year 2010-11 and ₹ 16,39,337, in assessment year 2011-12. 4. Though, the assessee contested the aforesaid additions before learned Commissioner (Appeals), however, the additions were susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove that the purchases were made from the declared source. However, it is equally true that the goods have been purchased by the assessee from some unverified sources. Therefore, the Assessing Officer instead of disallowing the entire purchases has restricted the disallowance to the profit element embedded therein by estimating it @ 12.5%. Before me, the learned Counsel for the assessee has subm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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