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TMI Blog2023 (7) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... e has assailed the impugned order on the following grounds of appeal: "1 That the order is bad in law as well as on facts and the Ld. CIT(A) erred in confirming the action of Ld. AO in making addition of Rs. 26,88,000/- under section 69C of the income tax act, 1961. 2. The learned CIT(A) erred in sustaining the disallowance of Rs. 26,88,000/- made on account of bogus purchases without appreciating that the disallowance was made mechanically without considering the evidences furnished by the assessee and also without rejecting the books of account. 3 Without prejudice to Ground No.1 & 2 above, the Ld. CIT(A) erred in not appreciating the fact that based on the judicial dictum at best only a percentage of the alleged bogus purchases cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 147 r.w.s. 144 r.w.s. 144B dated 28.03.2022 made an addition of the entire amount of bogus purchases of Rs. 26.88 lacs u/s. 69C of the Act. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me. 6. I have heard the Ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 7. After arguing at length, Shri Prafulla Pendse, the Ld. Authorized Representative (for short " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at a discounted rate from the open/grey market and had routed the said transaction through its books of account on the basis of bogus purchase bills procured from the aforementioned bogus concern. 10. Apropos the addition that was called for in the hands of the assessee firm, I am of the considered view that the same is liable to be restricted only to the extent of profit which the assessee would have made by procuring the goods at a discounted value from the open/grey market as against the inflated value at which the same were booked on the basis of the bogus bills in its books of account. In so far the issue of quantification of profit which the assessee would have made by procuring the goods in question from the open/grey market is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases. The decision of the Gujarat High Court in the case of N.K. Industries Ltd. (supra) cannot be applied without reference to the facts. In fact in paragraph 8 of the same Judgment the Court held and observed as under- "So far as the question regarding addition of Rs. 3,70,78,125/- as gross profit on sales of Rs. 37.08 Crores made by the Assessing Officer despite the fact that the said sales had admittedly been recorded in the regular books during Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6 % gross profit is taken into acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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