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TMI Blog2021 (3) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales made by the assessee have not been doubted. This pre-supposes that in absence of the purchases, the assessee could not have effected corresponding sales. Even, the AO was also convinced with this fact. Hence, instead of disallowing the entire purchases, he disallowed only the profit element by estimating at 12.5%. Keeping in view the nature of business carried on by the assessee and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has raised ground 2 challenging the ex parte disposal of appeal; however, at the time of hearing, learned Authorised Representative did not press this ground and requested the Bench to decide the appeal on merits. 3. Briefly the facts are, the assessee is a partnership firm and engaged in the business of trading in ferrous and non ferrous metals. For the assessment year under dispute, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not to the satisfaction of the Assessing Officer. Therefore, he treated the purchases as non genuine. After rejecting the books of account of the assessee, the Assessing Officer proceeded to disallow 12.5% of the alleged non genuine purchases on the reasoning that there is every possibility that the assessee must have inflated the price of goods. Thus, he disallowed an amount of ₹ 12,68,66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce at 12.5% is high and excessive. Finally, he submitted, in case of one of the partners of the firm in similar line of business, the Tribunal in ITA No. 2211/Mum/2018 dated 14-12-2018, has restricted the disallowance to 5% of the non genuine purchases. Thus, he submitted, the disallowance made by the departmental authorities should be scaled down to a reasonable rate. 5. The learned Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disallowed only the profit element by estimating at 12.5%. Therefore, the issue before me is, whether the disallowance made at 12.5% is reasonable? Keeping in view the nature of business carried on by the assessee and the profit rate normally attached to such line of business, I am of the considered opinion that disallowance at 5% of the alleged non genuine purchases would be fair and reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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