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TMI Blog2020 (4) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... AM For the Appellant : Shri V. Vinod Kumar, DR For the Respondent : Shri Mehul Shah, AR ORDER PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER: The present appeal as well as cross objection have been filed by the revenue as well as assessee against the order of Ld. Commissioner of Income Tax (Appeals) in short referred as Ld. CIT(A) , Mumbai, dated 05.05.17 for Assessment Year (in short AY) 2009-10 respectively. 2. Since, the facts raised in the appeal filed by the revenue as well as C.O. filed by the assessee are identical, therefore for the sake of convenience; they are clubbed, heard and disposed of by this consolidated order. First, we are taking ITA No. 6873/Mum/2018 for AY 2009-10 filed by the revenue. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice will be met in the instant case if GP is estimated to tune, of 12.5% of the purchases from these alleged hawala operators which will cover any leakage of Revenue by way of VAT, commission etc. Thus, as compared to the GP ratio at 7.11% declared by the assesses, we are estimating GP ratio at the rate of 12.5% on the said bogus purchases wherein the assessee will be allowed credit of declared GP ratio of 7.11% and net addition to GP ratio shall be to the tune of 5.39% on bogus purchases, hence, we allow partial relief to the assessee. We order accordingly. 5. By relying upon the above decision, Ld. CIT(A) came to the conclusion that assessee has already declared 2.97% as GP for this assessment year and after considering the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of the above purchases and AO has already established that these transactions are accommodation entries and considering the fairness, he disallowed 12.5% of the above said bogus purchases. However, Ld. CIT(A) disallowed 3.75% of the said bogus purchases, which is not proper and he has not clearly brought on record, how he came to that conclusion. Ld. DR supported the order of AO. 8. On the other hand, Ld. AR submitted that assessee has submitted all the facts before Ld. CIT(A) by way of letters dated 12th March 2018 and 3rd Sept 2018. He relied on the facts which was submitted before Ld. CIT(A) and further relied on the decision of Coordinate Bench of ITAT in the case of Vaishali Prakash Muni Vrs. ITO (ITA No. 378-380/Mum/18). He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishali Prakash Muni Vrs. ITO (supra), in which the Bench has made observation that normally the GP rate works out to 4% and in that case, assessee was dealing in iron steel trading. Whereas in the given case, assessee is a dealer in various types of iron steel products, therefore we cannot standardize the profits among various types of steel industries. Thus, we are inclined to reject the contentions of Ld. AR. Accordingly, we direct the AO to disallow 9.53% (i.e. 12.5% - 2.97%). Therefore, grounds raised by the revenue are partly allowed. 11. In view of the above appeal, the CO filed by the assessee becomes infructuous and is dismissed. 12. In the net result, the appeal filed by the revenue stands partly allowed. Order pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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