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TMI Blog2018 (10) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... s could not be provided by the assessee. All these factors cast a serious doubt on assessee’s claim. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases. Therefore, we estimate the same @12.5% of alleged bogus purchases of ₹ 65.99 Lacs which comes to ₹ 8.25 Lacs. The balance additions stand deleted. The grounds and the appeal stand partly allowed. Commission Expenditure - assessee claimed the aforesaid expenditure as commission payment to an entity namely Corporate Alliances - Held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation /other evidences, in this regard, shall be adduced by the assessee before Ld. AO. - Ground allowed for statistical purposes. - I.T.A. No.1533/Mum/2017, I.T.A. No.1534/Mum/2017 - - - Dated:- 5-10-2018 - Shri Manoj Kumar Aggarwal, AM And Shri Ravish Sood, JM For the Assessee : Kishor Patel Manali Madhwani, Ld. ARs For the Revenue : Manoj Kumar Singh, Ld. Sr. DR ORDER PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. The aforesaid appeals by assessee for Assessment Years [AY] 2009-10 2011-12 contest separate order of first appellate authority. Since common issues are involved in both the appeals, we dispose-off the same by way of this common order for the sake of convenience and brevity. First we t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the corresponding income by way of Sales Services having been accepted, as a natural corollary, not the entire purchases but the profit element embedded therein would be subject to tax, which in Appellant s case only 19.43% (Gross Profit ) of the purchases of ₹ 65,99,994/- ought to have been subjected to tax. The assessment for impugned AY was framed by Ld. Deputy Commissioner of Income Tax, Range-13(1), Mumbai [AO] u/s 143(3) read with section 147 vide order dated 26/03/2014. 2.1 During impugned AY, the assessee being resident firm was stated to be engaged as Engineers, Ship repairers, Marine contractors. The income of the assessee has been determined at ₹ 117.49 Lacs after additions of alleged bogus purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order dated 09/12/2016 wherein the stand of Ld. AO got confirmed. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Authorized Representative [AR] for the assessee, Shri Kishore Patel, drawing our attention to the documents placed in the paper book , agitated the additions as confirmed by Ld. first appellate authority. The Ld. AR also drew our attention to the order of Ld. first appellate authority for AY 2010-11 to submit that additions, under similar circumstances, have been restricted to Gross Profit rate declared by the assessee. No serious arguments have been adduced to assail the reassessment proceedings and therefore, the grounds raised in that regard are taken to be not pressed. Per Contra, Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA NO.1534/Mum/2017 6. This appeal by assessee contests confirmation of following additions:- No. Nature of Addition Amount (Rs.) 1. Commission Expenditure 5,84,331/- 2. Disallowance u/s 28(iv) 23,29,801/- Total 29,14,132/- 7.1 Brief facts qua the addition of commission expenditure of ₹ 5.84 Lacs are that the assessee claimed the aforesaid expenditure as commission payment to an entity namely Corporate Alliances. It was stated that the services of said entity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing services. Our attention has been drawn to the profile of the said entity to submit that it was independent professional entity and was not merely acting as an agent of the assessee. The supporting documents in the shape of invoices, agreement, engagement letter etc. have been placed on record. It is also noted that similar additions made by Ld. AO in AY 2009-10 has been deleted by Ld. first appellate authority, finding substance in assessee s claim. Therefore finding strength in the arguments of Ld. AR, the issue stand remitted back to the file of Ld. AO for re-adjudication as per law in the light of submissions made by Ld. AR. The assessee, in turn, is directed to substantiate his claim, failing which Ld. AO shall be at liberty to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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