TMI Blog2024 (5) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... be added and is restricted for addition. In our considered view, we set aside the appeal order and the addition is restricted to gross profit @2.56% on the bogus purchase. - Shri Anikesh Banerjee, Judicial Member And Miss. Padmavathy.S, Accountant Member For the Assessee : Shri Vimal Punamiya, Ms. Mona Makwana For the Respondent : Shri R.R. Makwana, JCIT ORDER PER BENCH: Both these appeals of the different assessees were filed against the order of the National Faceless Appeal Centre, Delhi (NFAC)*for brevity, Ld.CIT(A) + passed under section 250 of the Income-tax Act, 1961 (in short, the Act ) for Assessment Year 2008-09 in the case of Shri Rameshkumar Sanghvi dated 21/09/2023 and 2009-10 in the case of Shri Kalpesh Rameshbhai Vyas dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 147 of the Act by issuing notice under section 148 of the Act in as much as reasons recorded by Assessing Officer depict mere suspicion and no tangible material is available in possession of the Assessing Officer. 4. The learned Commissioner of Income Tax (Appeals) erred in confirming assessment order made under section 143(3) rws 147 of the Act which is illegal, bad-in-law, ultra virus and without allowing reasonable opportunity of the hearing, and without appreciating facts, submission and evidences in their proper perspective, without providing copies of material relied upon and without providing cross examination, is liable to be annulled. On the facts and in the circumstances of the case and in law the assessment made under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground during the time of hearing before the Bench. The Ld.AR placed a calculation which is reproduced as below:- Alleged party for addition Sr.No. PARTIES NAME AMOUNT (Rs.) 1. Champion Steel (India) 14,70,346 2. Shubham Metal Corporatyion 47,56,902 3. Raj Star Metal Industries 25,90,517 TOTAL 88,17,762 Comparison of GP Ratios to M/s Mohammad Haji Adam and Co ITA No.1004 of 2016 Particulars Genuine Purchases Alleged bogus Purchases Sales 1,64,03,561 90,99,865 Closing Stock 89,376 (A) 1,64,92,937 90,99,865 Opening Stock 4,54,236 Purchases 1,51,60,896 88,17,762 (B) 1,56,15,132 88,17,762 GP (a-b) 8,77,805 2,82,103 Gp Ratio 5.667% 3.101% G.P. of genuine purchases 5.66% Less : G.P. of Bogus purchases 3.10% Addition to be confirmed 2.56% Ld.AR p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the lower authorities the details such as invoices, payment through banking channel, confirmation of accounts and other details for purchase of goods. Undeniably, the parties who notices under section 133 (6) of the act were returned, assessee also did not produce the parties. However as held by the honourable Bombay High Court in case of Mohmd. Hail Adam company (supra) where sales are not disputed; no discrepancy between purchases shown by the assessee and the sales declared; only the addition should be restricted to the extent of bringing the gross profit on purchases at the same rate of other genuine purchases, On this mandate, it was found that assessee has given the quantitative sales corresponding to the quantitative purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases. The decision of the Gujarat High Court in the case of v JW.K. Industries Ltd. (supra) cannot be applied without reference to the facts. In fact in paragraph 8 of the same Judgment the Court held and observed as under- So far as the question regarding addition of Rs. 3,70,78,1257- as gross profit on sales of Rs. 37.08 Crores made by the Assessing Officer despite the fact that the said sales had admittedly been recorded in the regular books during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le bills, transaction through banking channels and the sale was totally declared in MVAT returns which were filed before the ld. Assessing Officer and the ld. CIT(A). The GP of the genuine purchase is @5.66% and GP of bogus purchase is @3.10%. So, the balance@ 2.56% of bogus purchases is only to be added and is restricted for addition. In our considered view, we set aside the appeal order and the addition is restricted to gross profit @2.56% on the bogus purchase. 9. Accordingly, the appeal of the assessee is allowed on the terms indicated above. ITA 4214/Mum/2023 10. Related to this appeal the ld. AR submitted the calculation, reproduced as below. The ld. AR prayed for restricting GPR @2.86% on bogus purchase. Alleged party for Addition Ko ..... X X X X Extracts X X X X X X X X Extracts X X X X
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