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TMI Blog2022 (6) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in the circumstances of the case and in law, the Ld. CIT(A)-3,Thane erred in deleting the addition of Rs.5,45,249/- out of the total addition of Rs.7,26,999/- made on account of bogus purchases, despite holding that the purchases were not genuine and the assessee failed to prove genuineness of the transactions. 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A)-3, Thane erred in deleting the above addition despite the fact that the assessee failed to discharge his onus of proving the purchases. 3. The appellant prays that the order of the Ld. CIT(A)- 3, Thane, may be set-aside and that of the Assessing Officer be restored. 4. The appellant craves leave to add, amend or alter or alter any ground/grounds, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of filing appeal who has partly allowed the same. Feeling aggrieved the Revenue has come up before the Tribunal by way of filing present appeal. 5. Despite issuance of the notice to the assessee none appeared on behalf of him, so the Bench decided to decide this appeal on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue. 6. We have heard the Ld. Departmental Representative for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon. 7. During the first appellate proceedings the Ld. CIT(A) called for the remand report from the concerned AO but no such reman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant's submission it is observed that during the year under consideration the appellant had declared gross profit @ 3,58% and net profit @ 2.19%, which is very low. There cannot be any dispute about the well settled legal proposition that tax can be levied only on real income. It is elementary rule of accountancy as well as of taxation laws that the profit from business cannot be ascertained without deducting the cost of purchase from sales, otherwise it would amount to levy of income tax on gross receipts or sales. of the Hon'ble Gujarat HC in the case of Vijay Protein and other decisions of the Guiarat HC in the case of Sanjay Oilcake Industries Vs. CIT (2009) 316 ITR 274 and N.K industries Ltd. Vs. DCIT. 6.2 Disallowance @ 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no basis to restrict the addition to the tune of 25% of the bogus purchases by the Ld. CIT(A). However, this argument of the Ld. D.R. for the Revenue is misconceived because even the AO has not applied any legal yardstick by conducting any enquiry rather proceeded to rely upon the information sent by Sales Tax Department of Maharashtra and made adhoc additions. Identical issue has also been decided by the Hon'ble Bombay High Court in case of JK Surface Coatings Pvt. Ltd. in ITA No.1850 of 2017 order dated 28 October, 2021 by returning following findings: "4. Having considered the memo of Appeal and the Orders passed by AO / CIT(A) and the Order of ITAT, the only issue that comes up for consideration is with respect to the extent of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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