9911796707
TMI Blog2017 (3) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... . We confirm the order of CIT(A) and appeal of assessee is dismissed. - ITA No.1196/Mum/2015 - - - Dated:- 28-2-2017 - SRI MAHAVIR SINGH, JM AND SRI ASHWANI TANEJA, AM For The Assessee : Shri R. S. Sharma, AR For The Revenue : Shri Suman Kumar, DR ORDER PER MAHAVIR SINGH, JM: This appeal by the assessee is arising out of the order of CIT(A)-28, Mumbai, in appeal No. CIT(A)-23/ACIT-12(1)/IT-119/2013-14 dated 30-12-2014. The Assessment was framed by ACIT Circle 12(1), Mumbai for the A.Y. 2010-11 vide order dated 20-03-2013 u/s 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The only issue in this appeal of assessee is against the order of CIT(A) against restricting the disallowance of 12.50% of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee to the extent of ₹ 3,48,41,491/- According to information of Sales Tax Department these bogus parties who are engaged in profiting accommodation entries without doing any business and without delivery of goods as follows: - 4. Before the AO as well as CIT(A) assessee produced the details of purchases, sales and also submitted details of octroi payments and payments of transportation charges for all these materials. The assessee also produced purchase bills, sale bills, challans and stated that in this line of trade i.e. iron and steel the profit margin is only 1 to 2%. The AO made enquiries with the relevant parties but there was no party available from whom the assessee made purchase or even the transporters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 5,58,190/ Rs.26,76,559 The AO disallowed the purchase as bogus purchases and also made the addition for payment made to these parties as unexplained paymeriL. Accordingly, the total addition made by him was ₹ 42,58,952/- (Rs.15,82,393 plus ₹ 26,76,559/-). On appeal, the CIT(A) following the decision of the STAT in the case of Vijay Proteins and Others, 'disaLlowed 30% of the total addition i.e. ₹ 42,58,952/-. Both the assessee as well as the ITO aggrieved with the order of the Ld.CIT(A) filed an appeal before the Hon'ble ITAT. While the addition of ₹ 26,76,559/- was deleted by the Hon'ble ITAT, with regard to the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with regard to the receipt of the gooas Dy J, i.e. stock register, receipt of weigh- bridge for weighment of goods purchased by the assessee, octroi receipt for the payment of octroi duty etc. After considering the entire material, we are of the opinion that the assessee did not purchase the goods from the parties mentioned in the sales bill. At the some time, it did purchase the goods from some other suppliers, may be without bill. Therefore, purchase rate as mentioned in the alleged sales bill cannot be accepted. Any person indulging in the practice of purchasing goods from the grey market and obtaining bogus bills of some other parties, would do so for getting some benefit. But what would be the magnitude of the benefit would depend up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials purchased and sold. Considering peculiar facts of that case, the Tribunal arrived at the conclusion that it would be fair and reasonable to estimate the addition at ₹ 50,0001- as against the addition of ₹ 27,39,4071- made by the Assessing Officer. However, the learned Commissioner of Income Tax (Appeals) considering the facts of the assessee's case, has sustained the addition at 12.5%. While doing so, he has also relied upon the decision of the Tribunal in the case of M/s.Vijay Proteins Ltd., 55 7TJ (Ahd) 76. In the case of MIs. Vijay Proteins Ltd., the Tribunal has sustained the addition of 25% of the bogus purchases. However, considering the facts of the assessee's case the C!T(A) restricted the disallowance to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground of appeal filed by the assessee is partly allowed. . Aggrieved, now assessee is in second appeal before Tribunal. 6. We have heard all rival contentions and gone through the facts and circumstances of the case. We find that admittedly the assessee has made sales but could not produce the parties before the AO or before CIT(A) from whom the purchases were made. Even during an inquiry the Revenue could not trace these parties i.e. either the transporters or the sellers. Admittedly these parties from whom the assessee has made bogus purchases are hawala dealers declared by sale tax department of Maharashtra. In such circumstances we are of the view that the CIT(A) has reasonably estimated profit rate on bogus purchases and r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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