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TMI Blog2020 (8) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases. Hence, a reasonable profit can be estimated because the estimation of profit is on higher side -Both the authorities lower had admitted assessee have made sales which is not denied out of these purchases. It means that the assessee might have purchases from grey market and also saved VAT. Hence, a reasonable profit on these bogus bills can be estimated. Hence, estimate the profit on these bogus bills at the rate of 5% and direct the AO to recompute the income accordingly. Appeals of assessee are partly allowed. - ITA No. 1408/Mum/2019, ITA No. 1403/Mum/2019 - - - Dated:- 1-6-2020 - Sri Mahavir Singh, Vice President For the Appellant : Shri Naren Kumar Mishra, AR For the Respondent : Shri Bhora Ram, Sr. DR O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing GP @ 12.5% of the alleged bogus purchase as unexplained income and he reasons assigned for doing so are wrong and contrary of the provision of Income Tax and rules made there under. 3. Briefly stated facts are that the assessee engaged in the business of trading. The AO received information from DGIT (Investigation), who in turn received information from Sales Tax Department, Mumbai that the assessee has made purchases from hawala parties, as listed in hawala dealers by the Maharashtra Sales Tax Department who are providing bogus bills of purchase amounting to ₹ 47,08,701/- for AY 2010-11 and ₹ 1,26,15,175/- for AY 2011-12 as admitted by these hawala dealers in their deposition before the authorities. The same reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,23,316 5. Veer Industries 20,60,318 6. Chambal Steel Alloys 18,97,705 Total 1,26,15,175 4. The AO issued noticed under section 133(6) to the parties which returned back with the remark as left and assessee failed to produce these parties. During the course of assessment proceedings and during appellate proceedings, the assessee failed to submit documents in respect of evidences such as movement of goods i.e. the transportation bills, delivery challan and weighment slips, etc. But, the assessee filed the details of purchase bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank statements etc. However, some of the specific details required to establish the genuineness of purchase such delivery challans, transport receipts, etc could not be submitted before the A.O. Nor the Principle Officer of these concerns were produced before the A.O. for examination. However, it is also a fact that the A.O. has not questioned the total sale component and if there is a sale there should be purchase. The appellant being a trading concern, had indulged in using such accommodation entry. As evident from catena of judgment of bogus purchases, only the benefit derived by using such accommodation entries has to be brought to tax. The advantages from using such bogus bills are in the form of saving VAT, saving of transportati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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