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TMI Blog2019 (8) TMI 1846X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases would be reasonable. Accordingly, we direct the Assessing Officer to restrict the addition in both the assessment years under appeal to 6% of the non-genuine purchases. Grounds raised by the Revenue are dismissed and grounds raised by the assessee are partly allowed. - ITA no.3507 & 3508/Mum./2018, ITA no.3581 & 3582/Mum./2018 - - - Dated:- 30-8-2019 - SHRI SAKTIJIT DEY, JUDICIAL MEMBERAND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER Revenue by : Shri Chaudhary Arunkumar Singh Assessee by : Shri Prateek Jain ORDER 1. These are two sets of cross appeals arising out of two separate orders, both dated 21st April 2015, passed by the learned Commissioner of Income Tax (Appeals)-37, Mumbai, pertaining to the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued under section 133(6) of the Act, returned back unserved by the postal authority, the Assessing Officer held that the purchases claimed to have been made are mere accommodation entries and accordingly disallowed them. Having done so, the Assessing Officer added back the entire non-genuine purchases to the income of the assessee in both the assessment years. The addition made in different assessment years are as under:- A.Y. 2008 09 Rs. 75,82,917 A.Y. 2009 10 Rs. 85,97,910 4. Being aggrieved with the aforesaid additions, assessee preferred appeals before the first appellate authority. 5. After considering the submissions of the assessee in the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gin shown by the assessee. 7. The learned Departmental Representative strongly relying upon the observations of the Assessing Officer submitted, since the assessee has failed to prove the genuineness of purchases and it is proved that the assessee has availed accommodation entries from hawala operators, the Assessing Officer was justified in adding the entire non-genuine purchases. He submitted, learned Commissioner (Appeals) has committed error in restricting the addition to 12.5%. 8. We have considered rival submissions and perused the material on record. At the outset, we propose to address the grounds raised by the assessee challenging the validity of re-opening of assessment under section 147 of the Act. On a perusal of the mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is a fact on record that sales effected by the assessee have not been disputed by the Assessing Officer. That being the case, it has to be concluded that in absence of purchases, the assessee could not have effected corresponding sales. Thus, dispute remains only with regard to the source from which the assessee purchased the goods. In the aforesaid factual position, the addition of the entire purchase is not justified. Therefore, to that extent, learned Commissioner (Appeals) was correct in estimating the profit on the non-genuine purchases for the purpose of addition. 10. Now reverting back to the reasonableness of estimating profit @ 12.5%, after over all consideration of facts and material on record, the nature of business carried ..... X X X X Extracts X X X X X X X X Extracts X X X X
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