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TMI Blog2020 (4) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... R. C. Sharma, AM And Shri Amarjit Singh, JM For the Assessee : Shri N. M. Porwal For the Revenue : Shri Kumar Padmapani Bora (DR) ORDER PER AMARJIT SINGH, JM: The assessee as well as revenue have filed the above mentioned appeals against the different order passed by the Commissioner of Income Tax (Appeals)-30, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Ys.2008-09, 2010-11 2011-12. Since common grounds are involved in all the years under consideration, all the appeals are being taken up together for adjudication by this consolidated order. ITA. NO. 1114/M/2018 2. The assessee has filed the present appeal against the order dated 10.01.2018 passed by the Commissioner of Income Tax (Appeals)-30, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y.2008- 09. 3. The brief facts of the case are that the assessee filed its return of income on 29.09.2008 declaring total income to the tune of ₹ 14,37,550/-. The return was processed u/s 143(1) of the Act. The case of the assessee was reopened u/s 147 of the Act. Notice u/s 148 of the Act dated 27.03.2015 was issued and served upon the assessee. Subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder.:- 1 On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) erred in (a) confirming addition to the extent of ₹ 4044753/- which is made on account of estimation of profit @ 6.5% on alleged bogus purchases of ₹ 62226968/- and added to the total income of the Appellant (b) estimating rate of profit at 65% on alleged bogus purchases over and above gross profit declared at the rate of 4.91% by the appellant on such purchases. 2. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) erred in (a) confirming action of the Assessing Officer of rejection of books of accounts of the appellant by invoking provisions of section 145(3) of the Act. (b) assuming that the learned authorised representative of the appellant stated that he is not pressing these grounds of appeal, hence dismissed and not being pressed which is contrary to the facts of the case. 3. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) erred in (a) arriving at the conclusion that the appellant failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There was no evidence to show that the amount was recycled back to the appellant, particularly, when it was found that the appellant also shown sales out of purchases made from various alleged bogus suppliers which were also accepted by Revenue. The appellant relies on the Hon'ble Supreme Court judgment in the case of Pr. CIT, Surat vs Teja Rohit Kapadia. 2. The Revenue erred in not appreciating that in the case of the Hon'ble Mumbai Tribunal judgment in the case of Shree Sundha Steels P. Ltd, where on almost identical facts, the Hon'ble Tribunal reduced the G.P. percentage to 2% when M/s. Shree Sundha Steels Pvt. Ltd have shown G.P. of 2.39% in respect of total sales as against G.P. percentage of 4.91% declared by the appellant in respect of total sales. Therefore, Hon'ble Tribunal ought to delete the entire addition because the Appellant has already declared G.P. percentage of 4.91% which is more than percentage of G.P. 4.39% in the case of M/s. Shree Sundha Steels Pvt. Ltd. The Appellant craves leave to add, to amend, alter or vary the Grounds of Appeal either before or at the time of hearing of the Appeal. 7. The precise grounds raised by ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mumbai transferred the assessment records to ITO-19(2)(4), Mumbai. By necessary implications, he admitted that the jurisdiction did not vest in him. (b) If any A.O. issued a notice to the assessee u/s.148 of the Act for initiating proceedings u/s.147 of the Act, without having jurisdiction over the assessee, such a notice is void, ab-initio. (c) Finally, Assessment Order dated 10th March, 2016 has been passed by ITO-19(2)(4) without there being any valid transfer order u/s.127 transferring jurisdiction of the assessee partnership from ITO-15(1)(1), Mumbai to ITO19(2)(4), Mumbai. 6. The Ld. CIT(A) erred in not appreciating that the purchases made by the appellant were duly supported by bills and payments were made by account-payee cheques. There is no evidence to show that the amount was recycled back to the appellant, particularly, when it was found that the appellant has shown sales out of purchases made from various alleged bogus suppliers which were also accepted by Revenue. The appellant relies on the Hon'ble Supreme Court judgment in the case of Pr. CIT, Surat vs Teja Rohit Kapadia. 7. The Revenue erred in not appreciating that in the case of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... margin should be adopted @ 2.5%. In view of the above, in my considered opinion, applying the logic of the above said case the profit percentage embedded on such purchases is restricted to 6.5% (i.e. 4% of VAT levied + 2.5% towards profit margin), that will meet the ends of the justice. Taking all the facts into consideration and applying the logic of Simit P. Sheth case, the A.O. is defected to restrict the estimation 6.5% on the non-genuine purchases of ₹ 6,22,26,968/-. Appeal on Ground No. 1 is treated as 'Partly Allowed'. 9. It was argued by Ld. AR that all the documents in support of the purchases were furnished to the AO during the course of assessment proceedings and the AO after considering the same and also the material on record, expressed his view that the explanation is not I tenable for the reason that the Sales Tax Department has certified these parties to be nongenuine operators. When the bills bearing VAT No. allotted by Sales Tax Department the further enquiry should have been made from Sales Tax Department. Just because their names appear in the list it cannot be concluded that the said purchases from the suppliers are bogus. The A.O. should h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copies of purchase invoices of the specified parties. (ii) Copies of bank statement evidencing made through proper banking channels by issuing account payee cheques in respect of all the parties highlighting the relevant entries. (iii) Chart showing the details of purchases of the alleged parties. (iv) Details in respect of purchases from the above named parties and the corresponding sales. (v) Item wise and bill wise extract of stock register of entire year containing inward and outward movement of trading good dealtwith. (vi) Copy of invoice and delivery challans issued by alleged hawala dealers for alleged purchases made. (vii) Confirmation letter of alleged hawala dealers alongwith copy of their sale tax return and paid VAT challan. 11. As per the Ld. AR under these facts and circumstances decision of the Hon ble Jurisdictional High Court in the case of Pr. CIT Vs M/s Mohommad Haji Adam Co. in ITA No. 1004 of 2016 is applicable for quantifying the addition in respect of bogus purchases. The Hon ble Jurisdictional High Court in the case of Pr.CIT Vs M/s Mohommad Haji Adam Co. in ITA No. 1004 of 2016 vide its order dated 11/02/2019 have held as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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