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TMI Blog2021 (3) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 - SHRI VIKAS AWASTHY ( JUDICIAL MEMBER ) AND SHRI N. K. PRADHAN ( ACCOUNTANT MEMBER ) Assessee by : Mr. Raj Kumar Singh , AR Revenue by : Mr. Sanjay J. Sethi , DR ORDER PER N.K. PRADHAN, A. M. The captioned appeals filed by the assessee are directed against the order of the order of the Commissioner of Income Tax (Appeals)-5, Mumbai [in short CIT(A) ] and arise out of the assessment completed u/s 143(3) r.w.s. 147 of the Income Tax Act 1961, (the Act ). For the sake of convenience, as common issues are involved, we are proceeding to dispose off these appeals by a consolidated order. Facts being identical, we begin with the AY 2009-10. 2. The ground of appeal filed by the assessee reads as under: That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the genuineness of the purchases. However, those notices were returned un-served by the postal authorities with the remark left , not traceable , not known etc. Thereafter, the AO asked the assessee to produce those parties for examination. However, the assessee failed to do so. Having examined the details filed by the assessee, the AO noted that the assessee could not file important documents such as delivery challans, transport receipts, goods-inward register maintained in the godown. Considering the above facts, the AO estimated the profit @ 12.5% of the disputed purchases of ₹ 1,24,10,733/- and accordingly brought to tax ₹ 15,51,341/-. 4. In appeal, the Ld. CIT(A) vide order dated 27.05.2019 confirmed the above additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant materials on record. The Ld. CIT(A) has distinguished the present case of the assessee from Mohommad Haji Adam Co Ors (supra) (hereafter that case ) on the ground that (i) in that case, the assessee was a trader in cotton and man-made fabrics on retails as well as semi wholesale basis and mainly dealt in suiting and shirting materials, whereas in the present case, the appellant is engaged in trading of ferrous and non-ferrous metals, (ii) in that case, it is observed that though during the course of survey operations u/s 133A of the Act, bogus/hawala/suspicious parties concerned therein in their statement had admitted that they are engaged in issuing bogus/hawala bills, but subsequently, all the three parties concerned there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied to the assessee, and therefore, the purchases were bogus. He, therefore, added the entire sum in the hands of the assessee as its additional income. The assessee carried the matter in appeal before the CIT(A), who accepted the factum of purchases being bogus. However, he compared the purchases and sales statements of the assessee and observed that the Department had accepted the sale, and therefore, there was no reason to reject the purchases, because without purchases there cannot be sales. He, therefore, held that under these circumstances the AO was not correct in adding the entire amount of purchases as the assessee s income. He, therefore, deleted the addition refreshing it to 10% of the purchase amount. He also directed the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases. The decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the GP rate on purchases at the same rate of other genuine purchases. The Hon ble Bombay High Court held that no purchases can be rejected without disturbing the sales in case of a trader thus, additions limited to the extent of brining the GP rate on purchases at the same rate of other genuine purchases . We find that the facts in the instant case are similar to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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