TMI Blog2023 (7) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... en actually purchased and consumed in executing the contract, the cost price is required to be deducted and taxes cannot be levied on the same. There is nothing to indicate whether the profit element should be more than 12.5%. No substantial question of law arises. - K.R. SHRIRAM, J AND FIRDOSH P. POONIWALLA, JJ. For the Appellants : Mr. Devrat Singh. For the Respondent : Mr. Jitendra Singh. P.C. 1. This Appeal impugns the order passed by the ITAT on 1st May 2017 and the following substantial questions of law are proposed: 6.1 Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT is perverse in not considering the order of Hon ble Supreme Court in the case of N K Protein Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case and in Law, the Hon ble ITAT erred in ignoring that the purchases from bogus parties are debited in P L Account for which the assessee had not submitted any evidences, and the same was not allowable? 6.5 Whether on the facts and in the circumstances of the case and in Law, the Hon ble ITAT erred in upholding the order of the Ld.CIT(A) who had limited the disallowance to the extent of 12.5% of the total alleged purchase without verification and confirmation of quantitative data of material sourced and its subsequent movement during the year? 2. It is Appellant s case that Respondent was a Civil Contractor who, for Assessment Year 2010-11 filed return of income on 22nd September 2009 declaring income of Rs. 27,99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 451 (Guj) and upon considering other facts directed the AO to restrict the addition to the profit element embedded on such purchases estimating it at 12.5% on the purchases of Rs. 94,90,188/-. 7. The Revenue impugned the order of CIT (A) before the ITAT. The Appeal of Revenue came to be dismissed by ITAT. The ITAT confirmed the order of CIT(A) restricting the addition to 12.5% of the purchases. It is this order of the ITAT passed on 1st May 2017 which is impugned in this Appeal. 8. We have heard the counsel and also considered the order passed by the Assessing Officer as well as the CIT (A) and also the impugned order. 9. Mr. Singh submitted that the CIT (A) having come to a conclusion that there was overwhelming evidence to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent would have concluded the contracts with BMC without making any purchases. In effect, the purchases by Respondent has not been doubted but the genuineness of the suppliers have been doubted. 11. The AO has also held that the purchases themselves were not bogus though the parties from whom the purchases were made by the Respondent were found to be bogus. He has treated them as bogus parties because these parties were not produced during the assessment proceedings. 12. The ITAT has come to a factual finding that though the suppliers were not produced before the AO, Respondent had maintained books of account which were audited and Audit Report were filed under section 44AB of the Act. Payments have been made by account payee cheques, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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