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TMI Blog2017 (8) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize profit earned by assessee against purchase of material in the grey market and undue benefit of VAT against bogus purchases which CIT(A) has rightly done. Therefore, we confirmed the order of CIT(A). - ITA NO. 4106/Mum/2016& CO. NO. 147 - - - Dated:- 18-8-2017 - SHRI D.T. GARASIA, JM AND G. MANJUNATHA, AM Assessee by : MR. RAJESH KUMAR YADAV (DR) Respondent by : MR. BHUPENDRA SHAH (AR) O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: The above appeal relate to Assessment Year 2010-11. The appeal arise out of the order dated 04.10.2013 of the Commissioner of Income Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the same on 14.02.2013. It was also observed by the AO that there is a huge time gap between the purchase made and the payments done by the assessee on perusal of Form No. 3CD filed by the appellant. It was noticed that the appellant is not maintaining any stock register and thus no contemporaneous records establishing receipt of so called purchased goods was available. The AO also noted that the Maharashtra Sales Tax Dept. had undertaken enquiries into the affairs of several such these parties and had found that they were merely issuing bogus sale bills without delivery of material on the basis of their affidavits and their statements recorded. The AO then relied on the following decisions to hold that that onus of proof to prove his pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance made by the AO is to be restricted to the difference between 12.5% and the recorded GP of 7.58% which is 4.92%. I therefore, direct the AO to estimate of the disallowance by adopting 4.92% of ₹ 6,24,39,723/-. The disallowance made by the AO is restricted to a sum of ₹ 30,72,034/-. The appellant gets a relief of ₹ 5,93,67,689/-. 4. During the course of hearing, the Ld. DR relied upon the following decisions: (i) VISP(P) vs. CIT Indore (2004) 186 CTR 218(MP); (ii) CIT vs. Prashant (P) 1994 121 CTR(Cal) 20; (iii) CIT vs. La Medica, 117 Taxman 628 (2001). 5. The Ld. AR relied upon the order of CIT(A) and the decision of Gujarat High Court in case of Commissioner of Income Tax vs. Simit P. Sheth 35 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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