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TMI Blog2023 (2) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... opening of assessment under section 147 of the Act in the facts of the present case. Accordingly, ground no.1, raised in assessee s appeal is dismissed. Estimation of income bogus purchases - As relying on Mohammad Haji Adam case [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT ] we set aside the impugned order passed by the CIT(A) and restore the matter to the file of the Assessing Officer with the direction to restrict the addition as regard the bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchase. We further direct that if the gross profit rate on bogus purchases is higher than the other genuine purchases and the same has already been offered to tax by the assessee then n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the assessee in ITA No. 3749/Mum./2019, for the assessment 2009-10, are as under::- "1. The learned ITO 19(1)(3) Mumbai (hereinafter referred to as learned I.T.O. only) erred in issuing notice u/s 148 of the Income Tax Act, 1961 without any basis & justification & hence order passed in bad in law & the learned CIT(A)-3, Mumbai (hereinafter referred No to as learned CIT only) erred in confirming the same. 2. The learned Income Tax Officer erred in adding a sum of Rs. 4,30,861/-(Rs. Four lac thirty thousand eight hundred sixty one only) to the income being disallowance on account of alleged to be bogus purchase Rs. 34,46,888/- at 12.5% which is very very on higher side & also without any basis & justification & the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of Rs.7,59,369. The return of income filed by the assessee was selected for scrutiny and vide order dated 17/12/2011, the assessment was completed under section 143(3) of the Act assessing the total income of the assessee at Rs.8,08,380. Pursuant to the information received from DGIT (Inv.), Mumbai, and the Sales Tax Department, Government of Maharashtra, that the assessee is a beneficiary of bogus purchases, the re-assessment proceedings under section 147 were initiated in the case of the assessee and notice under section 148 of the Act was issued on 06/03/2014. In response to the notice, the assessee requested that the return of income originally filed be treated as a return of income filed in response to the notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned A.R. also submitted that the details such as ledger account, purchase invoice, bank statement showing that purchases were made by account payee cheque, details of items purchased, and its corresponding sales to various parties with quantity were submitted before the lower authorities. However, these parties could not be produced as the assessee has no control over them. 8. On the contrary, the learned Departmental Representative by vehemently relying upon the order of the lower authorities submitted that the Assessing Officer had conducted an independent enquiry and made the impugned addition. 9. We have considered the rival submissions and perused the material available on record. In the present case, after the completion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onding sales and also could not produce the books of account for verification, however, proceeded to make the addition only to the extent of 12.5% of the alleged non-genuine purchases by considering the same to be the profit element involved in this transaction. We further find that despite the aforesaid findings, the Assessing Officer has not disputed the sales made by the assessee during the year. As per the assessee for the assessment year 2009-10, out of the total alleged bogus purchases of Rs.34,46,888, the assessee made sales of Rs.35,12,385, resulting in a gross profit of Rs.65,497. As per the assessee, the gross profit rate on these purchases, which are alleged to be bogus, is 1.86% which is higher than overall gross profit which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dded in making of such bogus/unsubstantiated purchases by the assessee, we find that as held by honourable High Court of Bombay in its recent judgement in the case of principle Commissioner of income tax versus M. Haji Adam & Co. (ITA number 1004 of 2016 dated 11/2/2019 in paragraph 8 there off) the addition in respect of bogus purchases is to be limited to the extent of bringing the gross profit rate on such purchases at the same rate as of other genuine purchases. 5. We respectfully following the aforesaid judgement of the Honourable High Court set aside the matter to the file of the assessing officer with the direction to restrict the addition as regards the bogus purchases by bringing the gross profit rate on such bogus purchases at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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