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TMI Blog2019 (12) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... Muni vs. ITO [ 2018 (4) TMI 1202 - ITAT MUMBAI] had considerd an identical issue and considering facts has directed the AO to estimate 2% profit on alleged bogus purchases. The assessee further claims that fact of its case is identical to facts of case considered by the Tribunal in case of Vaishali Prakash Muni vs. ITO(Supra) and hence requested to estimate 2% profit on alleged bogus purchases. We, therefore, considering facts and circumstances of this case and consistent with view taken by the Coordinate Bench in number of cases, including in the case of Vaishali Prakash Muni vs. ITO (Supra) direct the Ld.AO to estimate 2% profit on alleged bogus purchases. Accordingly, we direct the AO to reduce additions to 2% profit on alleged bogus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing and trading in plywood, decorative laminates and other wood products, has filed its return of income for AY 2009-10 and 2010-11 on 9-9- 2009 and 9-9-2010, declaring total income of ₹ 14,88,250/- and ₹ 58,18,450/- respectively. Thereafter, the cases have been reopened u/s 147, on the basis of information received from DGIT, investigation, Mumbai, as per which Sales Tax Authorities of Government of Maharashtra had taken actions against number of Hawala dealers, who had issued bogus purchase bills to various parties in Mumbai. As per list of beneficiaries, the assessee is one of the beneficiary, who had taken accommodation bills of bogus purchases from five parties as listed by the AO in para 2 of his assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT vs. Simith P. Sheth (356 ITR 451) scaled down profit estimated by the AO from 12.50% to 8.80% on alleged bogus purchases for both assessment years. 5. We have heard rival contentions of both parties, perused the material available on record and gone through orders of the authorities below along with case laws cited by both sides. We find that the Ld. AO has made addition towards 12.50% profit on alleged bogus purchases, on the ground that the assessee is one of the beneficiary of accommodation entries of bogus purchase bills issued by Hawala dealers. According to the Ld. AO, although assesee has filed certain basic evidences, but failed to file further evidence in the backdrop of clear finding by the Sales Tax Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, various High Courts and Tribunals had considered an identical issue in light of investigation carried out by the Sales Tax Department and held that in case purchases claims to have made from alleged hawala dealers , only profit element embedded in those purchases needs to be taxed, but not total purchase from those parties. The Hon ble Gujarat High Court, in the case of CIT vs Simith P.Sheth 356 ITR 451 had considered a similar issue and held that at the time of estimation of profit from alleged bogus purchases no uniform yardsticks could be adopted, but it depends upon facts of each case. The ITAT, Mumbai, in number of cases had considered an identical issue and depending upon facts of each case, had directed the Ld.AO to estimat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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