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TMI Blog2019 (9) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-11 under consideration, the assessee filed its return of income on 30.09.2010 declaring a total income of Rs. 52,11,421/-. Assessment u/s 143(3) of the Act was completed on 30.03.2013 and income was assessed at total income of Rs. 9,89,23,388/-. In the course of search proceedings, there was collection of evidences which showed that the assessee and its various group concerns have taken accommodation entries from various concerns. Consequent to the search, a notice u/s 153A dated 04.03.2015 was issued and duly served on the assessee. After consideration of the facts, the AO held that the assessee was a beneficiary of accommodation entries from M/s Aadit International (Rs. 12,25,497/-), M/s Mishika Traders (I) P Ltd (Rs. 3,65,58,677/-), M/s N K B Metal Deals (I) P Ltd (Rs. 5,04,15,036/-), M/s Ragini Trading & Investments P Ltd (Rs. 15,77,02,992/-). M/s S B Metal Corporation (Rs. 8,55,46,613) and M/s Sai International Impex (Rs. 9,37,11,967/-) totally aggregating to Rs. 42,51,60,782/-. The AO thereafter proceeded to add the entire amount of purchases of Rs. 42,51,60,782/- on the ground that the assessee has not been able to substantiate its claim and prove the genuineness of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord the order of the Tribunal in assessee's own case for the A.Y.2010-11, wherein under similar facts and circumstances, addition on account of bogus purchases from one of parties M/s. Sai International Impex was upheld to the extent of 2% of such bogus purchases. 6. We have considered rival contentions and carefully gone through the orders of the authorities below and found from record that assessee is engaged in the business of trading in steel items (ferrous metal), under the propriety concern by name 'M/s. P.G. Traders.' There was search at assessee's business premises wherein it was found that assessee had entered into bogus transaction of purchases from the aforesaid parties. The Id. AO asked the assessee regarding such purchases and to prove the genuineness of the purchase transaction with the said party alongwith the supporting documents. Assessee had submitted quantitative details of material purchased and corresponding sales details. It was also submitted that payments were made by way of account paying cheques. The bank statements highlighting the payments were also submitted to the Id. AO. With regard to transportation documents, it was submitted that assessee does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * CIT v. Nikunj Eximp Enterprises (P.) Ltd. 35 Taxmann.com 384 (BOM HC) * Rajesh P. Soni v. ACIT (2006) 100 TTJ 892 (Ahd.)(Trib.) * DCIT v. Brahmaputra Steels (P) Ltd. 122 TAXMAN 32(GAUHATI)(MAG.) * Totaram Sharma vs. ITO Ward (AhmedabadTax Appeal No. 1344 of 2008 with Tax Appeal No. 1355 of 2008.) * Balaji Textile Industries (P) Ltd. v. ITO [1994] 49 ITD 177 (ITAT Mumbai) * Asst. CIT-19(3) vs. M/s. Steel Line (India) (ITA No.1321/Mum/2016) (Mumbai Tribunal) * Suman Gupta vs. ACIT-12(1) (ITA No.4774/Mum/2014)(Mumbai Tribunal) * M/s. Geolife Organics vs. ACIT-23(2) (ITA No.3699/Mum/2016) (Mumbai Tribunal) 11. The. Ld. AR has relied on the decision of the Hon'ble Bombay High Court in the case of Pr.CIT Vs M/s Mohommad Haji Adam & Co. Income Tax Appeal No. 1004 of 2016 dated 11/02/2019, wherein it was held that the addition in respect of bogus purchases should be restricted to difference between the gross profit shown by the assessee in respect of bogus purchases vis a vis normal purchases. Meaning thereby the addition should be confined to gross profit shown on the bogus purchases which is found to be lower than the gross profit on normal purchases. The precise observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are dismissed, accordingly. No order as to costs." 12. It was further argued by learned AR that assessee maintained quantitative records of goods purchased and sold evidencing the facts of movement of goods. In fact, the assessee has furnished quantitative reconciliation of goods purchased and sold. The correctness of the same is not doubted by the lower authority. The assessee is assessed to sales tax and has paid VAT. The purchases and sales are properly reflected in the books of accounts. Payments for purchases are made through account payee cheque and on payment of the amount to the supplier; the purchaser has no control on the affairs of the supplier. Sales receipts are also through account payee cheques and properly recorded. In fact, the ledger account of the supplier and the relevant bank statements highlighting the payments made to the supplier were also submitted to the Id. AO. Assessee is not stockiest, as such is running its business on meager profit by keeping a small margin difference between purchase price & sales prices by undertaking purchase transaction for every corresponding sales transaction. 13. We had also carefully gone through the order of the Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition was upheld to the extent of 2% of the bogus purchases. We had also deliberated on various judicial pronouncements referred by the lower authorities in their respective orders as well as cited by the ld AR of the assessee during the course of hearing before us in the context of factual matrix of the case. From the record we found that during these assessment years, the assessee had also paid sales tax amounting to Rs. 36,04,306/- and Rs. 53,05,061/- alongwith interest thereon. Thus, there is no saving on account of sales tax liability which was alleged to be evaded by having entered into such alleged bogus purchases. Keeping in view the fact that the assessee has maintained quantitative details of goods purchased and sold and had also furnished quantitative reconciliation of goods so purchased and sold, the correctness of which was not doubted by the lower authorities. Under these facts and circumstances and respectfully following the order of the Tribunal in assessee's own case, wherein the facts and circumstances are same, we direct the AO to restrict addition to the extent of 2% of bogus purchases. 15. From the record, we also found that in the A.Y.2008-09, assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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