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TMI Blog2018 (4) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... UDICIAL MEMBER AND SHRI N.K. PRADHAN, HON'BLE ACCOUNTANT MEMBER For The Assessee : Shri Dr. K. Shivram Shri Neelam C. Jadhav For The Department : Shri Vidyadhar ORDER PER C.N. PRASAD 1. These appeals are filed by the Revenue and cross objections by assessee against the orders of the Ld. Commissioner of Income Tax (Appeals)- 21, Mumbai dated 16.06.2016 for the Assessment Years 2009-10 and 2012-13. 2. The only issue in both the appeals of Revenue as well as the cross objections of the assessee is in respect of certain purchases treated as non-genuine by the Assessing Officer and the Ld.CIT(A) estimated the profit element out of such purchases at 8% made in Garden Item Trading segment and 12.5% in Garde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra Sales Tax Department. The Assessing Officer required the assessee to prove the purchase transactions with the parties as genuine as has extracted in the Assessment Order in both the Assessment Years. Assessee filed copy of ledger account, confirmations of all the parties along with the sample copies of invoices issued and delivery challans, copy of work orders issued by the Municipal Corporation of Greater Mumbai [in short MCGM ] along with the payment certificates and certificates issued by vigilance Department. Assessee also filed proof of payment by account payee cheques, quantitative details of items used in Garden development along with other details of purchases from the alleged bogus parties were furnished. It was also submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee earning Gross Profit slightly less than 8% from this segment and no addition was made in respect of Garden maintenance contract for the reason that the Gross Profit declared by the assessee was more than the estimated Gross Profit from such segment at 12.5% for the Assessment Year 2012-13. Similarly, the Ld.CIT(A) for the Assessment Year 2009-10 estimated the profit element from trading sales segment at 8% and no addition was made from Garden Maintenance contract segment for the reason that the Gross Profit declared by the assessee is more than the estimated Gross Profit at 12.5% for the Assessment Year 2009-10. 7. We find that on identical facts and circumstances where some of the parties from whom the assessee purchased mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts of the assessee. Therefore, we are of the considered view that merely on the basis of third party statement and also on the basis of notices issue u/s. 133(6), an adverse inference cannot be drawn about the purchases and the assessee has filed complete details of purchases. When however, the fact remains that the parties are appearing in the list prepared by the Sales Tax Department as suspicious/hawala operators indulging in providing accommodation entries has not been controverted by the assessee with necessary evidence. Though the assessee has filed purchase bills and payment proof for such purchases, in the backdrop of clear cut finding of the Sales Tax Department the purchases from the above parties cannot be considered as genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us purchases only profit element embedded in such purchases is to be taxed but not total bogus purchases. In this case the CIT(A) after considering relevant facts has adopted net profit of 8% on total sales achieved by the assessee in garden items segment and 12.5% on garden maintenance contracts to determine the total addition to be sustained on alleged bogus purchases from the above parties and confirmed the addition to the extent of ₹.28,78,748/- as against addition made by the Assessing Officer of ₹.8,64,00,351/-. Therefore, we are of the considered view that the CIT(A) was right in restricting the addition to the extent of Gross Profit embedded in such bogus purchases. We do not find any error in the order of the CIT(A). He ..... X X X X Extracts X X X X X X X X Extracts X X X X
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