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TMI Blog2022 (8) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any default and file all details/ documents in support of its claim. Thus, ground no.1 raised in assessee‟s appeal is allowed for statistical purpose. - ITA No.524/Mum./2022 - - - Dated:- 22-8-2022 - Shri Om Prakash Kant, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Ms. Pooja Chhawachharia For the Revenue : Shri Ajeya Kumar Ojha ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 20/06/2019, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by learned Commissioner of Income Tax (Appeals) 7, Mumbai, for the assessment year 2010 11. 2. The present appeal before us is delayed by 947 days. Along with the present appeal, assessee has filed application seeking condonation of delay in filing the appeal, which is also supported by an affidavit sworn by the Partner of the assessee. In the affidavit, the deponent has submitted as under: W.r.t. above I, Mr Prakash Chandan in capacity of partner of M/S Prakash Industrial Corporation would like to state that the order for the above year have been received by our office a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove and having perused the application, which is also supported by an affidavit, we are of the considered view that there exist sufficient cause for not filing the present appeal within the limitation period and therefore we condone the delay in filing the appeal by the assessee and we proceed to decide the appeal on merits. 4. In this appeal, the assessee has raised following grounds: Being aggrieved by the order passed by the Learned Assessing Officer (AO) u/s 143(3) rws. 147 of the Income Tax Act (the Act) and as confirmed by the CIT(A), your appellant prefers an appeal on the following grounds, which it is prayed, may be considered without prejudice to one another. 1. (a) On facts and circumstances of the case and in law, L. CITA) erred in confirming the action of the AO and approving the addition calculated by the AO on alleged bogus purchases without appreciating the facts that the opinion of the A.O is based on merely presumptions and sub conjectures and not on any material evidences corroborating the purchases when it is an accepted fact that material evidences super cedes all presumptions (b) The CIT(A) erred in confirming the addition without appreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. The assessee only filed one written submission before the learned CIT(A). After taking into consideration the written submission filed by the assessee, the learned CIT(A) dismissed the appeal filed by the assessee and upheld the addition of 12.5% of the gross profit as made by the Assessing Officer, by observing as under: 4.3 Having considered the assessment order of the AO and the submissions of the assessee, it is seen that the main plank of assessee's arguments regarding the genuineness of the purchases was that the payment has been made by cheque/banking channels and which has not found favour with court's/Tribunal's pronouncements like in the case of M/s. Kanchwala Gems vs. JCIT [ITA No. 134/JP/2002 dated 10.12.2003 by the Hon'ble ITAT, Jaipur wherein it is held that payment by account pree cheque is establish the genuineness of purchases. The said decision of the TEXT, pr has been affirmed by the Hon'ble Supreme Court in the case of M Kachwala Gems vs. JCIT (2006) 206 CTR (SC) 585: 288 ITR 10 SC Thus, the main contention of the appellant does not hold much water. The AD has med his views about the bogus nature of the purchases made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account payee cheque, copies of invoices, stock reconciliation statements before the AO; and merely because the suppliers did not appear before the AO, one cannot conclude that the purchases were not made by the assessee. The AO cannot disallow the purchases on the basis of suspicion because the suppliers were not produced before them. 4.3.2 In view of the discussion as above, it is clear that materials purchased and sold by the appellant cannot be doubted though it is not possible for the assessee to establish one to one nexus/link between purchases and sales. However, the fact of the matter remains that these transactions are not verifiable from the parties in question as it could not be established that purchases had been effected from the parties in question. Thus, the purchase prices shown on the invoices produced could not be subjected to verification and as such it was difficult to establish the correctness of the purchase prices paid for the material purchased. In the absence of any such verification as to the correctness of the price paid for the materials purchased by the appellant, the purchase price paid as mentioned on the invoices/bills cannot be accepted as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchases. In essence therefore, the Commissioner (Appeals) believed assessee theory that the purchases were not bogus but were made from the parties other than those mentioned in the books of accounts. That being the position, not the entire purchase price but only profit element embedded in such purchases can be added to the income of the assessee. So much is clear by decision of this Court. In particular, Court has also taken a similar view in case of Commissioner of Income Tax-IV vs. Vijay M Mistry Construction Ltd. vide order dated 10.01.2011 passed in Tax Appeal No. 1090 of 2009 and in case of Commissioner of Income Tax-I vs. Bholanath Poly Fab Pvt. Ltd. vide order dated 23.10.2012 passed in Tax Appeal No. 63 of 2012. The view taken by the Tribunal in case of Vijay Proteins Pvt Ltd. Vs. CIT reported in 58 ITD 428 came to be approved. 4.3.4. Similarly, while dealing with an identical issue, in the case of CIT, Vs. Bholanath Poly Fab (P) Ltd., I.T.A. No. 63 of 2012, in the order dated 23/10/2012 23/10/2012, the Hon'ble High Court of Gujarat has held as under: We are of the opinion that the Tribunal committed no error. Whether the purchases themselves were b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income-tax, ITA No.2840 3482/M/2015 dated 15.03.2017; ix) Deputy Commissioner of Income-tax Anr. Vs. Remi Process Plant Machinery Ltd. Anr, ITA No. 1723/M./2015, 1817/M./2015 dated 21.03.2017. x) Smt. Usha B. Agarwal vs ITO, ITA No. 7034/Mum./2016, dated 01.09.2017. In view of the above discussed factual matrix and precedents, I am of the view that the AO is justified in estimating the profit element calculated @ 12.5% embedded in impugned purchases of Rs. 38,64,638/- shown from the alleged hawala parties and adding the same to the total income returned. The assessment order of the AO is a well-reasoned and a speaking order giving in detail the reasons for his fair estimation and therefore, I do not see any reason to take a view in the matter different from the one taken by the AO. The action of the AO in estimation of 12.5% GP is sustained. The addition of Rs. 4,83,079/ made by the AO is confirmed. Hence, the grounds No. 1, 3 4 of appeal are Dismissed. Being aggrieved, assessee is in appeal before us. 7. During the course of hearing, learned Authorised Representative ( learned AR‟) submitted that in the present case assessee e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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