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TMI Blog2022 (2) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... fit earned by the assessee on the bogus purchases, hence, we direct the AO to charge the assessee at the gross profit @ 5% on the bogus purchases. - ITA No. 2016/Mum/2020 And CO No. 147/M/2021 (Arising out of ITA No. 2016/Mum/2020) - - - Dated:- 25-2-2022 - Shri M. Balaganesh, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : Shri Mayur J. Gosrani, A.R. For the Revenue : Shri Hoshang B. Irani, D.R. ORDER Per Kuldip Singh, Judicial Member : Aforesaid appeal filed by the Revenue and cross objections filed by the assessee bearing common question of law and facts challenging the common order dated 08.09.2020 passed by Commissioner of Income Tax (Appeals) [hereinafter referred to as the Ld. CIT(A)], are being disposed of by way of composite order for the sake of brevity. 2. Appellant ITO, Ward No.1(1), Kalyan (hereinafter referred to as the Revenue) and the assessee Shri Kantilal Kachara Gada by filing the present appeal and cross objections sought to set aside the impugned order dated 08.09.2020 passed by the Ld. CIT(A) on the grounds inter alia that: ITA No.2016/M/2020 (Revenue) 1. On the facts and in the circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing documentary evidence and cross examination of the so called hawala dealers to the appellant. 3) Ld. CIT (A) ignored the submissions of Appellant and also ignored Hon'ble Supreme Court and Jurisdictional High Courts Judicial Pronouncements (part of the appellant submissions) in relation to the Assessment Order u/s 143 (3) r.w.s 147 of Income Tax Act, 1961. Further Ld. CIT(A) neither provided any documentary evidence on the basis of which AO established a reason to believe for reopening of assessment nor provided Cross Examination of the concern third party even after specifically requested by the appellant during the course of CIT(A) proceedings and also specifically mentioned/requested in its submission. As the order passed against the principal of natural justice hence liable to quash. 4) The Ld. CIT(A) disallowed the claim of the appellant on the basis of N.K. Proteins Ltd vs DCIT Order of Gujarat High Court and SLP of Supreme Court of India, which was neither discussed during the course of hearing nor issued a show cause notice of his intention to apply N.K. Proteins Ltd to the case of appellant. The order was passed without providing opportunity of Hearing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary for adjudication of the controversy at hand are : the Assessing Officer (AO) on the basis of information received from the Sales Tax Department, Government of Maharashtra that assessee has obtained bogus purchase bills from the entry providers as under; S. No. Name of the entry provider Maharashtra VAT No. A.Y. Amount in the bills taken by the assessee 1 Samir Trading Corporation 27830386376v 2010-11 5960656 2 Skand Industries 2750053744lv 2010-11 9265092 3 Mahavir Enterprises 27560556517v 2010-11 5573880. 4 Rahul Traders 27590509892v 2010-11 13026780 Total Rs. 33826408 initiated the reassessment proceedings under section 147 and 148 of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue Authorities and in these circumstances addition of the gross profit on average basis in the range of 5% to 12.5% can be made and relied upon the decision rendered by the Hon ble Bombay High Court in the case cited as Pr. CIT vs. JK Surface Coatings Pvt. Ltd. in ITA No.1850 of 2017 order dated 28 October, 2021 and the decision rendered by the co-ordinate Bench of the Tribunal cited as M/s. Pavapuri Metals Tubes vs. Income Tax Officer in ITA No.1148/M/2019 order dated 29.09.2020 and in the case of Ravindranathan Nair vs. Income Tax Officer in ITA No.2662/M/2018 order dated 31.12.2018. 8. In the identical facts and circumstances of the case where though the purchases found to be bogus by the Revenue Authorities but sales by the assessee have been accepted as genuine as against these bogus purchases, we are of the considered view that when sales have been accepted being genuine the entire purchases cannot be treated as non genuine to make addition of the entire bogus purchases amount. Hon ble High Court of Bombay in the case of JK Surface Coatings Pvt. Ltd. (supra) upheld the view taken by the Tribunal that in such circumstances gross profit should be in the range of 5% to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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