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TMI Blog2018 (2) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... n accepted by the Revenue . We are inclined to accept the stand taken by the Ld. CIT(A) that only profit percentage should be brought to tax in the subject mentioned transaction. Thus the estimation of net profit at 1.25% of the disputed purchases by the Ld. CIT(A) does not call for any inference. Accordingly, grounds raised by the revenue are dismissed. - I.T.A No. 1541/Kol/2016 - - - Dated:- 14-2-2018 - Shri M.Balaganesh, AM And Shri S.S.Viswanethra Ravi, JM For The Appellant : Shri G. Hangshing, CIT For The Respondent : Shri Miraj D Shah, AR ORDER Per M . Balaganesh, AM 1. This appeal by the Revenue arises out of the order of the Learned Commissioner of Income Tax(Appeals)-14, Kolkata [in short the ld CIT(A)] in Appeal No.66/CIT(A)- 14/Cir-27/Wd-47(2)/2014-15 dated 31.03.2016 against the order passed by the ITO, Ward-46(4), Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 31.03.2014 for the Assessment Year 2011-12. 2. At the outset, we find that there is a delay of 29 days in filing of appeal by the Revenue before us. In view of the concession given by the Ld. AR and the reasons st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d . CIT ( A )- 14, Kolkata has erred while estimating profit @ 8 % gross Receipt instead of total Gross Receipt on service rendered by the assessee . 5.We have heard the rival submissions. It is not in dispute that the assessee had not reported the contractual receipt of ₹ 9,16,500/- in his profit and loss account. It is not in dispute that the said contractual receipt was duly subjected to deduction of tax at source to the tune of ₹ 9165/-. The Ld. CIT(A) had stated that the addition made by the Ld. AO estimating the profit at 40% of undisclosed contractual receipt on an ad hoc basis was unwarranted. The assessee has stated that the contract activity was carried out for the first time during the year under appeal and hence, no past history of the same was available with the Income Tax Department. In these circumstances, the only recourse available to the revenue is to take shelter from the provision of Section 44AD of the Act which enables the revenue to bring to tax at 8% of gross receipts on presumptive basis as the net profit of the assessee. This is provided in section 44AD of the Act which has been rightly relied upon by the Ld. CIT(A) even though n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, the Ld. AO made disallowance of ₹ 9,08,82,128/- towards bogus purchases in the assessment. 8. Before the Ld. CIT(A), the assessee has produced the entire documents that were produced before the ld. AO and reiterated the submissions made thereon. It was pleaded that the ld. AO had mentioned in his order that the sales as well as purchases made by the assessee would not be treated as genuine in respect of the subject mentioned transaction. Accordingly, it was pleaded that the ld. AO ought to have reduced the sales figure also from the total sales reported in view of the fact that there was no closing stock left with the assessee. Moreover, the ld AO himself had stated that all the purchases made by the assessee were sold during the year. The Ld. AO cannot accept the sales made out of alleged bogus purchase and treated the genuine purchase as bogus purchase. In any event it was pleaded that only the profit derived thereon could be brought to the tax. In support of this proposition, the assessee placed reliance on the decision of Hon ble Gujarat High Court in the case of CIT vs. Bholanath Poly Fabric Pvt. Ltd. reported in 355 ITR 290 wherein it was held that even if i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted . 10. Aggrieved the revenue is in appeal before us on the following grounds: 2 . That the Ld . CIT ( A )- 14, Kolkata has erred by estimating 1 . 25 % of the sundry creditors credit amount instead of total credit amount . 3 . That the Ld . CIT ( A )- 14, Kolkata has erred in estimating 1 . 25 % of the sundry creditors credit though no part of the said amount was never paid by the assessee to the creditor . 4 . That the Ld . CIT ( A )- 14, Kolkata has erred in estimating 1 . 25 % of the sundry creditors treating it as profit element of the purchase whereas it was found that the assessee introduced capital of Rs . 9,08,82,128 /- in disguise of purchase . 5 . That the Ld . CIT ( A )- 14, Kolkata has erred in concluding the bogus purchase as genuine where the seller on oath declared that he had never sold any commodity to the assessee and receive no amount . 11. We have heard the rival submissions. We find that the assessee had made purchase from M/s Rameswar Enterprises to the tune of ₹ 9,08,82,128/- which has been treated as bogus by the ld. AO by placing reliance on the state ..... X X X X Extracts X X X X X X X X Extracts X X X X
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