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TMI Blog2020 (6) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... uld support said rate of gross profit with necessary evidences or any comparable cases. Therefore we are of the considered opinion that the ld. CIT(A) has taken a fair view and estimated 12.50% gross profit on alleged bogus purchases to settle dispute between the parties and hence, we are inclined to uphold order of the ld. CIT(A) and dismiss appeal filed by the assessee. - ITA No.967 And 968/Mum/2019 - - - Dated:- 14-2-2020 - Shri Saktijit Dey, Judicial Member And Shri G. Manjunatha, Accountant Member For the Assessee : None For the Revenue : Shri Sourabh Deshpande, Addl. CIT DR ORDER PER G.MANJUNATHA (A.M): These two appeals filed by the assessee are directed against, order of the Ld. Commissioner of Income Tax (Appeals) 10, Mumbai, both dated 28/12/2018, for the AY 2009-10 2011-12. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are disposedoff by this consolidated order. 2. The assessee has more or less raised common grounds of appeal for both AY s. Therefore, for the sake of brevity, grounds of appeal filed for AY 2009-10 are reproduced as under:- 1. On the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business of trading in all types of ferrous and non ferrous metals, filed its return of income for AY 2009-10 on 30/09/2009, declaring total income at ₹ 1,37,330/- and the same was processed u/s 143(1) of the I.T.Act, 1961. Subsequently, the case has been reopened u/s 147 of the Act, 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 and other places. As per list of beneficiaries, the assessee is one of the beneficiary, who had taken accommodation bills of bogus purchases from various parties as listed by the AO in para 5 of his assessment order amounting to ₹ 35,95,479/-. The case was selected for scrutiny and the assessment has been completed u/s. 143(3).r.w.s. 147 of the I.T.Act, 1961 on 27/02/2015 and determined total income of ₹ 8,90,290/-, after making 25% profit additions towards alleged bogus purchase from those parties. However, the ld. AO has allowed further deductions towards gross profit declared by the assessee and made additions of ₹ 7,47,860/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and duties which may be leviable m respect of manufacture of sale of goods in question. The suppliers or the manufacturers make a substantial saving in the incometax in respect of income from sale of unaccounted goods priced and sold by them. This may also be one of the factors due to which the seller may be willing to charge lower rates for unaccounted goods as compared to accounted for goods 8.15 Apparently, the motive behind obtaining bogus bills is inflation of purchase price so as to suppress the profits and the profit from such transactions varies with nature of business and no uniform yardstick can be adopted for estimation of such profit Therefore, in light of the above decisions, lading in to account The totality of the facts, it will be reasonable to estimate the profit embedded in the accommodation entries of bogus purchases as undisclosed profit of the appellant 8.16 The estimations of profit embedded in accommodation entries of bogus purchases transactions 12.5% out of purchase price accounted through bogus invoices have been upheld as the fair profit rate out of the bogus purchases by the Hon ble Courts and Tribunals. 8.17 In the case of CIT v Si/nil P Sheth |3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In sofar as legal ground challenging reopening of assessment, we find that the AO has reopened assessment on the basis of fresh materials in form of information from DGIT(Inv) which was further supported by report of MVAT, Department, Govt. of Maharastrha which constitutes fresh material to form reasonable belief of escapment of income. We, therefore are of the view that there is no merit in legal ground taken by the assessee challenging reopening assessment and hnce, the same is rejected. 6. As regards additions towards alleged bogus purchasee, we find that the Ld. AO has made addition of 25% profit less gross profit declared 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 Department, Maharashtra that those parties are involved in providing accommodation entries without actual delivery of goods. The Ld. AO had also taken support from the investigation conducted during the course of assessment proceedings, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the Ld.AO to estimate gross profit of 10% to 15% on total alleged bogus purchases. In this case, considering the nature of business of the assessee the Ld. AO has made addition of 25% gross profit less GP declared by the assessee, whereas the ld. CIT(A) has scaled down additions to 12.50% profit on alleged bogus purchases. Although, both authorities have taken different rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. Therefore, considering facts and circumstances of this case and consistent with view taken by the Co-ordinate Bench in number of cases, we are of the considered opinion that the ld. CIT(A) has taken a fair view and estimated 12.50% gross profit on alleged bogus purchases to settle dispute between the parties and hence, we are inclined to uphold order of the ld. CIT(A) and dismiss appeal filed by the assessee. 8. In the result, appeal filed by the assesee is dismissed. ITA No.968/Mum/2019:- 9. The facts and issues involved in this appeal are identical to the facts and issues, which we had considered in ITA No. 967/Mum/2019 for AY ..... X X X X Extracts X X X X X X X X Extracts X X X X
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