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TMI Blog2017 (6) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is upheld and the ground of appeal No.1 raised by the assessee is dismissed. Addition by applying GP rate on the alleged bogus purchases - Held that:- Undoubtedly, the assessee has established the trail of goods but since the goods are purchased through hawala dealer, then margins of profit for such goods needs to be added in the hands of assessee. Following the decision in bunch of appeal in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT (2017 (6) TMI 514 - ITAT PUNE ), the Assessing Officer is directed to apply GP rate of 10% on the goods purchased from hawala dealers, over and above the GP rate declared by the assessee. - ITA Nos.972 to 974/PUN/2016 - - - Dated:- 2-6-2017 - MS. SUSHMA CHOWLA, JM Appellant by : Shri Pram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst issue raised in the present appeal is against reopening of assessment under section 147 of the Act. 5. Briefly, in the facts of the case, the assessee had filed the return of income on 15.09.2009 declaring total income of ₹ 8,13,997/-. The said return of income was processed under section 143(1) of the Act. The Assessing Officer received certain information from the DG, Investigation Wing, Pune, in respect of hawala transactions made by the assessee. The Assessing Officer recorded reasons for reopening the assessment under section 147 of the Act and thereafter, issued notice under section 148 of the Act. The assessee in reply, stated that the original return of income filed by it should be treated as filed in response to notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the amount of gross profit which had arisen out of such purchases, for which the bills had been procured from M/s. Parth Steel, the hawala dealer, is assessable in the hands of assessee. He upheld the order of Assessing Officer in applying the GP rate of 20% on the amount of purchases. 7. The assessee is in appeal against the order of CIT(A). 8. The first issue raised by the assessee is against the reopening of assessment under section 147 of the Act. We find no merit in the ground of appeal No.1 raised by the assessee, where the original return of income filed by the assessee was processed under section 143(1) of the Act. Thereafter, on the basis of information received, the Assessing Officer had reason to believe that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further pointed out that in view of M/s.Parth Steels is not depositing VAT, the assessee had paid VAT. He stressed that in view of the said trail of goods, no addition is merited in the hands of assessee. Reliance in this regard was placed on the decision in group cases with lead order in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT in ITA No.795/PUN/2014, relating to assessment year 2010-11, order dated 28.04.2017. 11. The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below. 12. On perusal of record and after hearing both the learned Authorized Representatives, the issue which arises in the present appeal is against addition made on account of bogus purchases. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Tribunal that where it has established the trail of goods and has also deposited the VAT, then there is no merit in making any addition in the hands of assessee. In this regard, he placed reliance on the decision in group cases decided by the Tribunal with lead order in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT (supra). Undoubtedly, the assessee has established the trail of goods but since the goods are purchased through hawala dealer, then margins of profit for such goods needs to be added in the hands of assessee. Following the decision in bunch of appeal in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT (supra), the Assessing Officer is directed to apply GP rate of 10% on the goods purchased from hawala dealers, over and above the G ..... X X X X Extracts X X X X X X X X Extracts X X X X
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