TMI Blog2017 (5) TMI 1811X X X X Extracts X X X X X X X X Extracts X X X X ..... et price. Once, the stock tally is there and no defect is pointed out only option left with the Revenue authorities is to apply profit rate and CIT(A) has rightly applied profit rate at the rate of 12.5% of the bogus purchases. Decided against revenue. - ITA No.5442/Mum/2014,ITA No.5443/Mum/2014 And ITA No.5444/Mum/2014 - - - Dated:- 1-5-2017 - Sri Mahavir Singh, JM And Sri Manoj Kumar Aggarwal, AM For the Petitioner : Shri Naveen Gupta, DR For the Respondent : Shri Jeetendra Singh, AR ORDER PER MAHAVIR SINGH, JM: These three appeals by the Revenue are arising out of the common order of CIT(A)-27, Mumbai, in appeal No. CIT(A)-27/AC16(3)/79, 495 496/2013-14 dated 16-06-2014. The Assessments were framed by ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 631 3 Payal Enterprises 1,98,969 4 Siddhivinayak Trading Company 3,47,818 5 Dhruv Sales Corporation 4,33,118 6 Renuka Sales 1,33,719 7 KRC Trading Co. Pvt. Ltd 1,851,566 8 Sheetal Trading Co. 3,56,840 9 Deepali Enterprises 2,77,418 10 Rekha Trading Co. 2,52,732 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,32,564 2 Ambika Sales corporation 1,221,567 3 Paras Enterprises 2,96,798 4 Gold Star Trading Co. 1,93,0483 Total 36,81,412 4. According to AO, the above purchases in three years, the assessee has made from the hawala parties who are only issuing bogus sale bill without delivery of goods. This information was as per the office of Director of General Income Tax Investigation, Mumbai, wherein they further received information from Sales Tax Department Govt. of Maharashtra reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the finding of Hon'ble ITAT that purchases were made from bogus parties since notice issued by the A.O. to these parties were allegedly received 'returned/unserved' and the assessee was unable to produce any confirmation from these parties. The Tribunal had held that though purchases were made from bogus parties, nevertheless, the purchases themselves were not bogus as the entire quantity of opening stock, purchases and sales were tallying and hence, only the profit margin embedded in such amount would be subjected to tax. The Hon ble Gujarat High Court taking cognizance of the fact held that whether purchases themselves were bogus or whether parties from whom such purchases were made were bogus, is essentially a question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the appellant has manipulated its accounts though Ld. AO has not doubted the contract receipts from BMC with which the appellant is engaged. Hence, in the facts and circumstances of the case and in view of CIT vs Simit P. Sheth (supra), I hold that the profit element embedded and suppressed in the alleged purchases were to the extent of 12.5%. Hence, addition to the extent of 12.5% is upheld and balance is deleted. Accordingly, these grounds of appeal are partly allowed. Aggrieved, now Revenue is in appeal before us. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the assessee partnership firm is engaged in the business of civil contractor carrying out work of rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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