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TMI Blog2020 (4) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... iable the lower authorities are entitled to tax the income component of transaction only. We have noted that lower authorities have made the disallowance keeping in view the nature and business activities of the assessee and disallowed 12.5% of the tainted purchases. In our view, the Assessing Officer has made a reasonable disallowance, which does not require any interference at our end - Appeal of the assessee is dismissed. - ITA No. 7252/Mum/2018, ITA No. 7253/Mum/2018 - - - Dated:- 2-3-2020 - Shri, R.C. Sharma, Accountant Member And Shri Pawan Singh, Judicial Member For the Appellant : None For the Respondent : Shri Satishchandra Rajore (DR) ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f bogus purchase made by the appellant and earning a gross profit of 12.5% thereon without any basis whatsoever. 5. The Learned Commissioner of Income Tax (Appeals) grossly erred in making the impugned addition of ₹ 11,03,632/- by taking the Gross profit at the rate of 12.5% on the purchases made by merely following the decision of the Gujarat high Court in the case of CIT v/s Simit P. Sheth 356 ITR 451, facts of which are not at all applicable to the case in hand and are clearly distinguishable from that of the appellant. The appellant therefore prays to your honours to kindly delete the uncalled for and justifiable impugned addition made. 2. Brief facts of the case are that the assessee is proprietor of M/s Jas Inc. engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ji Trading 5,86,818/- 2 G.R. Trade Link 3,48,712/- 3 Shradhha Trading Co. 11,89,718/- 4 Somnath International 15,46,857/- 5 M.R. Corporation 15,90,933/- 6 Sun Enterprises 18,41,259/- 7 Neelofar Trade Private Ltd. 4,27,944/- 8 Bhumi Sale Corporation 12,96,816/- Total 88,29,057/- 3. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to levy of income tax on gross receipt or sales. Thus, the assessee definitely inflated the expenditure by showing higher amount of purchase through fictitious invoices from the bogus parties. The Assessing Officer considered 12.5% of purchases in the books of account through fictitious invoices in the name of hawala parties. Accordingly, the Assessing Officer disallowed 12.5% of ₹ 88,29,057/-. The disallowance was worked out to ₹ 11,03,632/-. 4. On appeal before the ld. CIT(A), the re-opening as well as addition on account of bogus purchases were upheld. Further, aggrieved, the assessee has filed the present appeal before us. 5. None appeared on behalf of assessee despite service of notice through registered post a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply and furnished the copy of ledger account, purchase bills/invoices and bank statement showing the payment of consideration. The Assessing Officer noted that no evidence relating to the transportation of goods was furnished. The Assessing Officer after perusal of detailed furnished by assessee, the Assessing Officer took his view that assessee failed to produce the evidence of transportation of goods, Lorry receipt, mere payment through cheque does not establish that the purchases made from genuine and existing parties. The notices issued under section 133(6) were returned back by postal authority with remark Not Known . The Assessing Officer after considering the material before him concluded that assessee failed to produce the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keeping in view the nature and business activities of the assessee and disallowed 12.5% of the tainted purchases. In our view, the Assessing Officer has made a reasonable disallowance, which does not require any interference at our end. 8. In the result, appeal of the assessee is dismissed. ITA No. 7253/Mum/2018 for AY 2011-12 9. The assessee has raised the identical grounds of appeal as raised in appeal for AY 2010-11, which we have dismissed. Considering the fact that we have dismissed the appeal for A.Y. 2010-11 on similar set of fact. Therefore, the appeal for this year is also dismissed with similar observation. 10. In the result, appeal of the assessee is also dismissed. Order pronounced in the open court on 02/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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