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TMI Blog2018 (6) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case vis-à-vis observation of the AO we direct the AO to restrict the addition to the extent of 2% of such alleged bogus purchases. - ITA No.511/Mum/2016 And ITA No.719/Mum/2016 - - - Dated:- 19-6-2018 - SHRI R.C.SHARMA, AM AND SHRI RAM LAL NEGI, JM For The Revenue : Shri Rajat Mittal For The Assessee : Shri Rakesh Joshi ORDER PER R.C.SHARMA (A.M): These are cross appeals filed by Revenue and assessee against the order of CIT(A)-22, Mumbai dated 17/11/2015 for A.Y.2009-10 in the matter of order passed u/s.143(3) rws 147 of the IT Act. 2. Common grievance of assessee and Revenue relates to addition made on account of bogus purchases. Assessee is also aggrieved for reopeni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has upheld the reopening and estimated profit of 12.5% by relying on the decision of the Gujarat High Court in case of Simit P Sheth 256 ITR 451. Against the above order of CIT(A), both assessee and Revenue are in appeal before us. 6. It was argued by learned AR that assessee has filed all the documentary evidence before the lower authorities to prove the genuineness of purchases. He further contended that gross profit shown by the assessee during the year was 17.74%, therefore, making further addition by disallowing bogus purchases at 12.50% was not justified. He further contended that the GP shown by the assessee in respect of regular purchases vis- -vis alleged purchases were same and that it is not the case of the Department that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/2017, wherein under similar facts and circumstances disallowance to the extent of 2% of the alleged bogus purchases was upheld. 10. Reliance was also placed on the following decisions in support of the contention that simply based on the information from Sales Tax department, AO cannot make addition without making further investigation to substantiate his allegation of bogus purchase. In all the said case law, It has been held that if assessee has provided quantitative details and if sales are not doubted by AO, then addition cannot be sustained only because of non-appearance of supplier before the AO. M/s. Imperial Imp Exp vs. ITO (ITA No.5427/Mum/2015)[Mum.ITAT] ACIT vs. Mahesh K Shah (ITA No.5194/Mum/2014)[Mum ITAT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .74% of alleged purchase in assessee s income. 13. By the impugned order, CIT(A) confirmed the addition to the extent of 12.50% of alleged bogus purchases after relying on the decision of Gujarat High Court in the case of Simit P Sheth. We found that place of assessee s business and year under consideration were different and as such gross profit margin in this case cannot be used for comparison purposes. Therefore, the ratio of these decisions cannot be applied to the facts of instant case. After going through the judgment of Simit Sheth we found that it is pertaining to A.Y.2006-07 whereas assessee s case pertains to A.Y.2009-10. Simit Sheth was carrying on his business in the State of Gujarat whereas the present assessee is operating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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