TMI Blog2021 (6) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... on ORDER Shamim Yahya, Member (A) This appeal by the revenue is directed against the order of the learned Commissioner of Income Tax (Appeals)-26, Mumbai ('ld. CIT(A) for short) dated 31.05.2019 and pertains to the assessment year (A.Y.) 2011-12. 2. The grounds of appeal read as under: (1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 3,19,910/- made by the Assessing Officer on account of bogus purchases without appreciating the fact that parties from whom these purchases were made proven accommodation entry providers, as concluded by Sales Tax Authorities pursuant to the investigation carried out by them ? (2) Whether on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the appellant. During the re-assessment proceedings, the AO issued notice u/s. 133(6) to the above mentioned parties which was returned un-served by the postal authorities. This fact was communicated to the appellant who was asked to furnish the correct/new address of the party. Since the appellant failed to do so, the appellant was asked to produce the party along with the relevant evidences so as to verify the identity of the party and the genuineness of the transactions. The appellant, however, expressed his inability to do so. The appellant submitted copies of bills and reconciliation statement of sales corresponding to purchases made. However, no delivery challans or transportation details were submitted. The AO held that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been verified from the supporting evidences filed. Regarding purchases from M/s. Nisha Enterprises it was stated that 15% has already been disallowed in original assessment proceedings, therefore the further addition made by AO may be deleted. In such a situation, the various Courts including the Hon'ble Gujarat High Court in the case of CIT vs. Simit P. Sheth, 356 ITR 451 have held that not the entire purchases but only the profit element embedded in these purchases was to be disallowed and accordingly held that 12.5% of the purchases will be reasonable as profit on margin against the bogus purchases. Therefore, addition of 15% made in the original assessment is reasonable and there is no need of further addition of 85% with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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