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TMI Blog2017 (12) TMI 1480X X X X Extracts X X X X X X X X Extracts X X X X ..... /Mum/2017 - - - Dated:- 26-12-2017 - SHRI R. C. SHARMA, AM For The Assessee : Shri Sanjay Parikh For The Revenue : Shri Ram Tiwari ORDER PER R.C.SHARMA (A.M): These are the appeals filed by assessee against the order of CIT(A)-29, Mumbai dated 05/10/2016 for A.Y.2009-10 in the matter of order passed u/s.144 r.w.s. 147 of the IT Act. 2.The grounds taken by the assessee in ITA No.470/Mum/2017 are as under:- A) Reopening of assessment 1) The learned Commissioner of Income Tax (Appeals) - 29, Mumbai [CIT(A)] erred on facts and in law in holding that the Income Tax Officer -18(1)(2), Mumbai (AO) was justified in reopening the assessment u/s. 147. 2) The CIT(A) erred on facts and in law in holding that the reopening of assessment by the AO by issuing a Notice u/s. 148 in the name of Late Shri Bhupendra Joshi was valid and as per law. 3) The appellant prays that the reopening of assessment u/s. 147 may be held to be bad in law and the consequential order assessing the income of the appellant u/s. 144 r.w.s. 147 at ₹ 38,32,045/- may be annulled. B) Estimating profit on alleged bogus purchases 4) The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhavana Joshi, wife of Shri. Bhupendra Joshi. A reply was filed by her informing the AO about her husband's death. This was informed vide her letter dated 2.4.2014. It is surprising to note that in the letter written by her, she had mentioned the date of death as 1.7.2011. It is surprising that even on a certain thing like the date of death, there is confusion and the Ld. Counsel for the appellant, the legal heir and the death certificate all give three different dates. The AO vide his letter dated 21.5.2015 addressed to Smt. Bhavana Joshi requested her to file the return in response to notice u/s.148. A couple of letters subsequent to this letter were issued in the name of Bhupendra Joshi, the deceased which appears to be a typographical mistake by oversight. The AO was well aware that he was carrying on the proceedings against the legal heir as is evident from the assessment order and the notice of demand which carry the name of Smt. Bhavana Joshi, legal heir of Shri. Bhupendra Joshi. The Ld. Counsel for the appellant cannot take the plea that the notice is invalid because the AO had no information about the death of Shri. Bhupendra Joshi. Once he was given the information, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee but on the munim of the deceased assessee. Therefore the court held that the notice was invalid. In the present case, the notice has been served on the legal heir and further correspondence was made with the legal heir and the assessment was also completed in the name of the legal heir. It is noteworthy to mention that both in the grounds of appeal and the statement of facts, late Shri. Shuperidra Joshi is shown as the appellant and not Smt. Bhavana B. Joshi as legal heir of the deceased assessee. But an objection is taken when the AO does it. In view of the above, the proceedings u/s.147 initiated by the AO are held to be legal and valid. These grounds of appeal are dismissed. 7. I found that CIT(A) has deliberated on the issue threadbare and after discussing facts and circumstances of the case, and applying various judicial pronouncements came to the conclusion that objection taken by the assessee is not maintainable. Even the judicial pronouncements cited by learned AR during the course of hearing before me are not applicable to the facts of the case as discussed by the CIT(A) and produced hereinabove. 8. Nothing was placed on record by learned AR so as to pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the alleged suppliers who had issued bills to the assessee were not genuine as they were not traceable. The goods must have been received from other parties. The likelihood of the purchase price of these alleged purchases being inflated could not be ruled out and therefore the Hon'ble High Court has upheld the decision of CIT(A) and the ITAT disallowing 25% of the payments made to such parties. The Hon'ble High Court of Gujarat in the case of CIT vs. Simit P. Sheth 356 ITR 0451 held that once the sale is accepted by the AO, the very basis of purchases could not be questioned. Not the entire purchase price could be disallowed but only the profit element embedded in such purchases could be added to the income of the assessee. The estimation varies with the nature of business and no uniform yardstick could be adopted. 6.3.2. The profit margin in each trade is different and there cannot be a uniform profit margin for all the business. In this case, it is felt reasonable to estimate the G.P. @10% of the alleged bogus purchases. The AO is further directed to reduce the GP already declared by the appellant on these purchases. 7. The last ground of appeal is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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