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TMI Blog2019 (1) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is arising out of the order of Commissioner of Income Tax (Appeals)-30, Mumbai [in short CIT(A)], in appeal No. CIT(A)-30/19(2)(3)/1138/2015-16 dated 02.01.2018. The Assessment was framed by the Income Tax Officer, Circle 19(2)(3), Mumbai (in short ITO/ AO) for the A.Y. 2009-10 vide order dated 27.02.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The only issue in this appeal of assessee is against the order of CIT(A) restricting the profit rate at the rate of 6.5% of the bogus purchases. For this assessee has raised the following three grounds: - 1. The learned ITO 19 (2) (3) Mumbai (hereinafter referred to as learned ITO only) erred in adding a sum of ₹ 520431/- (Rs. Five lac tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia) 2,85,238 2. Samco Steel Alloys 5,95,766 3. Alliance Steel Industries 32,82,443 Total 41,63,447 4. The AO issued noticed under section 133(6) to the parties which returned unserved and assessee failed to produce these parties. During the course of assessment proceedings and during appellate proceedings, the assessee submitted documentary evidences such as payment received against such sales, receipt of material purchases, account payee cheque. According to the AO, the assessee failed to establish the genuineness of the purchase and accordingly, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the logic of the above said case the profit percentage embedded on such purchases is restricted to 6.5% (i.e. 4% VAT levied + 2.5% towards profit margin) that will meet the ends of the justice. Taking all the facts into consideration and applying the logic of Simit P. Sheth case, the AO is directed to restrict the estimation @6.5% on the non-genuine purchases of ₹ 41,63,447/-. Appeal on Ground No. 2,3,4 and 5 is treated as partly allowed. 5. We have considered the issue and gone through the facts and circumstances of the case. We find that the CIT(A) has rightly applied the profit rate at the rate of 6.5% of the bogus purchases and we confirm the same. This issue of assessee s appeal is dismissed. 6. In the result, the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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