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TMI Blog2021 (10) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of commission - HELD THAT:- We are of the opinion that the A.O. has only estimated the commission payment without any evidence and the addition was solely made on the basis of statement recorded - the addition is without evidence and the revenue has not discharged the burden with any incriminating material and we direct the AO to delete the addition and allow this ground of appeal - appeal of validity of re-assessment proceedings, we find the reopening was made with proper information from DCIT(Central circle) and we are not convinced with submissions of the AR and we dismiss this ground of appeal of the assessee. Gross profit/ profit embedded in the non genuine purchases and has restricted the addition to the extent of 12.5% of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income for the A.Y 2012-13 on 27.09.2012 declaring a total income of ₹ 3,65,62,010/- and the return of income was processed u/s 143(1) of the Act and the assessment was completed u/s 143(3) of the Act on 16.03.2015 determining a total income of ₹ 3,65,68,910/- Subsequently, the Assessing Officer (A.O.) has received information from DCIT, Central Circle Mumbai that the assessee has received accommodation entries from M/s.Paraneta Industries Ltd. Therefore the A.O. has reason to believe that the income has escaped assessment and after recording the reasons for reopening, the A.O. has issued notice u/s 148 of the Act. The assessee has filed a letter to treat the return of income filed on 27-09- 2012 as compliance. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the assessee on the disputed issue. Finally the CIT(A) considered the judicial decisions of the Honble High Court and Hon ble Tribunal and restricted the addition to the extent of 12.5% of bogus purchases and confirmed that action of the A.O. in respect of commission expenditure disallowance and partly allowed the appeal. Aggrieved by the CIT(A) order, the assessee has filed an appeal before the Honble Tribunal. 4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in estimation of income @12.5% on the genuine transactions of purchases which are wrongly treated as accommodation entries by the A.O. Further the income/profit estimated on the purchases is on the higher side. The assessee has disclosed the profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st we shall take-up issue were the Assessing Officer (A.O.) has made 100% addition of Bogus purchases and the CIT(A) has estimated income/profit @12.5%. The Ld.AR contentions are that the Assessee is engaged in civil construction works and the profit margin is very less due to operational delays and capitalization cost and the assessees Gross Profit rate is around @3.25%.We consider it appropriate to refer to the observations of the CIT(A) at page 9 Para 4.1.26 of the order, which is read as under: 4.1.26. As narrated earlier, the Ld. AO in this case has held that the parties from which the purchases were made by the appellant were found to be bogus and that is the reason for which it was not produced during the assessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commission payment without any evidence and the addition was solely made on the basis of statement recorded. Accordingly, the addition is without evidence and the revenue has not discharged the burden with any incriminating material and we direct the assessing officer to delete the addition and allow this ground of appeal. Lastly, on the ground of appeal of validity of re-asseement proceedings, we find the reopening was made with proper information from DCIT(Central circle) and we are not convinced with submissions of the Ld.AR and we dismiss this ground of appeal of the assessee. 9. In the result, the appeal filed by the assessee is partly allowed. ITA No. 1180/Mum/2020, A.Y 2012-13. 10. The revenue has raised the following g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial or new information and relied on the order of the A.O. 12. We heard the rival submissions and perused the material on record. We find that the CIT(A) has considered the facts of Gross profit/ profit embedded in the non genuine purchases and has restricted the addition to the extent of 12.5% of bogus purchases. The A.O. has not doubted the sales and we rely on the ratio of the Honorable Jurisdictional High Court in the case of M/s Nikunj Eximp Enterprises Vs Cit (W.P.No 2860 dated 18-06-2014). Accordingly, we are not inclined to interfere with the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue. 13. In the result, the assessee appeal is partly allowed and the revenue appeal is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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