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TMI Blog2016 (2) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... it appropriate to restrict the disallowance @ 10% of the impugned purchases. We order accordingly. - Decided partly in favour of assessee - ITA No.4383/Mum/2015, ITA No.4526/Mum/2015 - - - Dated:- 8-2-2016 - SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri D. B. Sanghvi (AR) For The Revenue : Shri B.S. Bist (DR) Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. These two Cross Appeals u/s 253 of the Income-tax Act ( the Act ) are directed against the order of Ld. Commissioner of Income-tax (Appeals) [for short the CIT(A)] 33, Mumbai dated 29.05.2015 for Assessment Year (AY) 2009-10. Since, both the appeal are arising out of the same order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was re-opened u/s 147 after recording the reasons that income chargeable to tax has escaped assessment. Notice u/s 148 dated 13.03.2013 was issued to the assessee. In respect to the notice assessee submitted that the return already filed may be treated as return in response to the said notice. The Assessing Officer (AO) completed the re-assessment proceeding u/s 143(3) r.w.s. 147 of the Act on 26.03.2014 and made the disallowance of aggregate amount of purchases of ₹ 62,11,780/-. On appeal before the ld. CIT(A), the assessee challenged the validity of re-opening as well as the addition of aggregate amount. The ld. CIT(A) granted partial relief to the assessee and restricted the disallowance to 12.5% of the purchases made from such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-ordinate Bench. The Co-ordinate Bench of Tribunal in assessee s own case for AY 2010-11 in ITA No. 4384/Mum/2015 (on Revenue s Appeal) made the following observations: 9. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On hearing both the parties on this issue, we find the sales account is undisturbed in this case by the AO. Therefore, the jurisdictional High Court judgment in the case of CIT vs. Nikunj Eximp Enterprises Pvt Ltd reported in 2013-TIOL is applicable in this case. Further, we find, the CIT (A) relied on the judgment in the case of Simit P Sheth (supra). On perusal of the cited judgment of the Hon ble Gujarat High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y profit element embedded in such purchases can be added to the income of the assessee. So much is clear by decision of this Court. In particular, Court has also taken a similar view in case of Commissioner of Income Tax-IV vs. Vijay M Mistry Construction Ltd. vide order dated 10.01.2011 passed in Tax Appeal No. 1090 of 2009 and in case of Commissioner of Income Tax-I vs. Bholanath Poly Fab Pvt. Ltd. vide order dated 23.10.2012 passed in Tax Appeal No. 63 of 2012. The view taken by the Tribunal in case of Vijay Proteins Pvt. Ltd. Vs. CIT reported in 58 ITD 428 came to be approved. If the entire purchases were wholly bogus and there was finding of fact on record that no purchase were made at all, counsel for the revenue would be justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases was confirmed by the Hon ble High Court when the recorded profit of the assessee Simit P Sheth (supra) is only @ 3.56%. Considering the above, we find, the CIT (A) is justified in adopting 12.5% of the suspected purchases for addition. Therefore, in our opinion, the order of the CIT (A) on this issue is fair and reasonable and it does not call for any interference. Thus, Ground no.2 raised by the assessee is dismissed . 6. We find that in the year under consideration the NP ratio of assessee has increased to 3.54 as against 2.58 in AY 2007-08 (page 228 of P/B). The NP ratio was not disputed by ld DR for the revenue. The Hon ble Bombay High Court in CIT Vs Hariram Bhambhani in ITA No. 313 of 2013 decided on 04.2.2015 held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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