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TMI Blog2020 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... e aggregate value of the impugned purchases by the CIT(A). Accordingly, in terms of our aforesaid observations the appeal filed by the revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Briefly stated, the assessee company which is engaged in the business of trading in iron and steel, machinery etc. had filed its return of income for A.Y. 2009-10 on 27.09.2009, declaring its total income at ₹ 1,45,65,720/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. On the basis of information received by the A.O that the assessee as a beneficiary had obtained bogus purchase bills aggregating to ₹ 42,95,62,364/-, its case was reopened under Sec. 147 of the Act. 3. During the course of the assessment proceedings it was observed by the A.O that the assessee had claimed to have made purchases aggregating to ₹ 42,95,62,364/- from the following 4 parties: Sr. No. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y accounted sales of the assessee for the year under consideration, the CIT(A) was of the view that the entire value of purchases could not have been disallowed. Rather, it was observed by the CIT(A) that a clear correlation between the amount of purchases and the corresponding sales could safely be gathered from the stock register of the assessee company. Apart from that, it was observed by the CIT(A) that the disallowance of the entire value of purchases would result into an abnormal increase in GP/NP by 26%, which was unheard of in the trade line of the assessee. In the backdrop of his aforesaid deliberations, the CIT(A) was of the view that the assessee had purchased the goods under consideration not from the aforementioned hawala parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s application with the Tribunal viz. M.A. No. 88/Mum/2019, seeking recall of the order, with a request, that the same may be disposed off along with the appeal of the revenue which was pending before the Tribunal. It was the claim of the ld. D.R that the aforesaid miscellaneous application filed by the revenue was dismissed by the Tribunal vide its order passed in M.A. No. 88/Mum/2019, dated 05.07.2019. It was submitted by the ld. D.R that independent of the aforesaid facts the present appeal of the revenue may be disposed off. 8. We have heard the ld. D.R, perused the orders of the lower authorities and the order passed by the Tribunal while disposing off the assesses appeal in ITA No. 4576/Mum/2017, for the year under consideration viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the captioned year had observed as under: "8. We have considered the rival submission of the parties and have gone through the orders of authorities below. During the re-assessment proceedings the assessee was asked to substantiate the purchases and to furnish the documents related to the purchases and to produce the parties for verification. The assessee failed to produce the parties for verification and the relevant documents to prove the genuineness of the purchases. The AO on his observation that that the assessee failed to produce the genuineness of transaction disallowed the entire purchases from four parties. The AO has not issued any notice under section 133(6) or summons under section 131 of the Act. The AO disallowed the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P will increased by 26% for which there is no comparable. The ld. CIT(A) sustained the addition at 12.5% of the bogus purchases on the basis of decision of different High Courts which includes Bholanath Poly Feb Pvt. Ltd. 355 ITR 290 (Guj), Sanket Steel Traders vs. ITO and the Vijay Proteins Ltd. vs. ACIT 58 ITR 428 (Ahd.) and CIT vs. Simit P. Sheth [39 taxman.com 385 (Guj)] etc. We are also of the view that under Income-tax Act, the only real income can be taxed by the Revenue, even if the transaction is not verifiable due to any reason, the only taxable is the taxable income component and not aggregate of the transaction. After considering the fact and nature of business of assessee, we are of the opinion that in order to fulfil the gap o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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