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TMI Blog2019 (6) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Although, the additional grounds have been filed, however, the same has not been pressed during hearing before us and therefore, not considered while adjudicating the appeal. 2.1 Facts in brief are that the assessee being resident firm stated to be engaged in trading of iron & steel was assessed u/s 143(3) r.w.s.147 for impugned AY on 23/03/2015 wherein the assessee was saddled with addition of Rs. 10.41 Lacs on account of alleged bogus purchases The original return of income filed by the assessee was processed u/s 143(1). 2.2 The reassessment proceedings got triggered pursuant to receipt of certain information from Sales Tax Department, Maharashtra wherein it transpired that the assessee stood beneficiary of accommodation purchase b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial on record came to a conclusion that the circumstances called for full additions as against 12.5% estimated by Ld. AO. Accordingly, enhancement notice was issued to the assessee on 01/06/2018 wherein the assessee was show-caused as to why the whole amount of bogus purchases may not be added to the income of the assessee. The assessee refuted the same by submitting that purchase bills were produced, corresponding sales were made and the payments to the suppliers was through banking channels. The attention was drawn to the fact that VAT was paid twice. However, not convinced, the additions were enhanced to 100% in the background of several judicial pronouncements, which have already been enumerated in the impugned order and not repeated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, in our opinion, had clinched the issue in the right perspective and was fair enough to estimate the additions @12.5%. Therefore, concurring with the stand of Ld. AO, we restore the order of Ld. AO. Accordingly, the enhancement of Rs. 72.93 Lacs as made by Ld. first appellate authority stands deleted. 6. Our aforesaid view is in line with the recent decision of Hon'ble Bombay High Court rendered in bunch of appeals titled as Pr.CIT Vs. M/s Mohommad Haji Adam & Co. [ITA No.1004 & others of 2016, dated 11/02/2019] wherein Hon'ble Court distinguishing the cited case law of Hon'ble Gujarat High Court rendered in N.K. Industries Ltd. Vs Dy. C.I.T. in Tax Appeal No. 240 of 2003 and connected appeals decided on 20th June, 2016 observed as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly been recorded in the regular books during Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6 % gross profit is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the selling price accordingly as a result of which profit comes to 5.66%. Therefore, considering 5.66% of Rs. 3,70,78,125/- which comes to Rs. 20,98,621.88 we think it fit to direct the revenue to add Rs. 20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favor of the assessee and partially in favor of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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