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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 ..... venue 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 Garden Maintenance Contract segment as against the entire purchases treated as non-genuine by the Assessing Officer. The assessee is in appeal against the order of the Ld.CIT(A) in estimating the profit element out of such purchases and the Revenue is in appeal in not sustaining the entire purchases disallowed by the Assessing Officer. 3. The Learned Counsel for the assessee submitted that identical issue came up before the Tribunal for the Assessment Year 2011-12 in ITA.No. 3835/Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 that that quantitative tally of these are confirmed by the vigilance Department of MCGM. It is also submitted that sales are not doubted and therefore no addition can be made toward bogus purchases as all the purchases were genuine. However, Assessing Officer rejected the submissions of the assessee. Assessing Officer brought entire purchases made from the parties as mentioned in the Assessment Order as bogus and non-genuine. 6. On appeal the Ld.CIT(A) on examination of the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 material are also common, the Tribunal for the Assessment Year 2011-12 sustained the order of the Ld.CIT(A) in adopting the profit element at 8% on Garden Item Trading segment and 12.5% on Garden Maintenance Contract segment to determine the total addition to be sustained on alleged bogus purchases from the parties and confirmed the addition made by the Ld.CIT(A) observing as under: "11. Having heard both the sides and considered material on record we find merits in the arguments of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 genuine in total. In these circumstances, one has to see what needs to be considered, whether it is the entire purchases from the above parties to be added because they are bogus in nature or only the profit element embedded in such purchases could be added. The issue is no longer res integra. The Hon'ble Gujarat High Court in the case of CIT Vs. Simit P. Sheth (supra) has considered similar case wherein the Hon'ble court held that when the total sales is accepted by the AO, then the entire pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer of Rs..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). Hence, we are inclined to uphold the findings of the CIT(A) and dismiss the appeal filed by the Revenue." 8. Facts being identical, following the order of the Tribunal for the Assessment Year 2011-12, we sustain the order of the Ld.CIT(A) for the Assessment Years 2009-10 and 2012-13 in adopting the profit element at 8% on Garden Item Trading segment and 12.5% on Garden Maintenance Contract segment in estimating the profit element on the purchases made by the assessee. Thus the addition as estimated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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