2018 (1) TMI 581

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..... n into account the margin earned by the assessee, vat rate of 4%, etc. Thus no infirmity in the order of the CIT(A) in so far as he has considered all aspects and accordingly further reduced the addition to 6%.- Decided against assessee.
Shri R.C. Sharma, Accountant Member For The Appellant : None For The Respondent : Smt. N. Hemalatha ORDER Per R.C. Sharma, A.M. These are appeals filed by the assessee against the order of the CIT(A)-29, Mumbai for assessment years 2010-11 & 2011-12 in the matter of order passed under Section 143(3) r.w.s. 147 of the Income Tax Act. 2. In these appeals the assessee is aggrieved for reopening of assessment as well as for upholding the addition of 6% of the bogus purchases. 3. Nobody appeared on b .....

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..... n of goods purchased, quantity, rate and amount, mode of transportation etc. Similarly, details of corresponding sales were also called for to link the purchases with sales. The assessee was also asked to produce the books of accounts. The AO held that though few details were furnished, it could not link the purchases with corresponding sale and books of accounts were also not produced for verification and hence no verification could be made and further proceeded to make an addition of 12.5% on the alleged bogus purchases of ₹ 1,62,20,028/-. 5. By the impugned order the CIT(A) reduced the addition from 12.5% to 6% after observing as under: - "4.3. The submissions have been carefully considered. The Ld. Counsel has contended that he .....

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..... ad 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 natu .....

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