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TMI Blog2024 (2) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... direct the revenue to add Rs. 20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue. It is impossible in this appellate jurisdiction to investigate what the product was and what should have been the profit margin. Moreover, the CIT(A) and the ITAT have on facts come to a conclusion that 8% is the reasonable figure. Therefore, in our view, the judgment of N.K. Industries [ 2016 (6) TMI 1139 - GUJARAT HIGH COURT ] does not assist Appellant case. - K.R. SHRIRAM DR. NEELA GOKHALE, JJ. For the Appellant : Ms. Swapna Gokhale (through V.C.) a/w Mr. Vaibhav Date. for Respondent : Mr. Atul K. Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases could not have been disallowed but only the profit element and proceeded to restrict the unexplained expenditure to only 8% of the total purchases made. Against the said order both assessee as well as the Revenue filed an appeal before the ITAT. The ITAT dismissed both the appeals by the order impugned dated 24th May 2017. After perusing records which we also go through with the assistance of the counsel, the ITAT found that the A.O. has added the entire amount of purchases in assessee s income under Section 69C of the Act on the basis that assessee has purchased goods from bogus suppliers who only issued bills but do not effect any real transaction. On the other hand, the CIT(A) restricted the addition to the extent of 8% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case. In the said judgment, the Court observed as under : The Tribunal in the case of V ijay Proteins Ltd. Vs. CIT had observed that it would be just and proper to direct the Assessing Officer to restrict the addition in respect of the undisclosed income relating to the purchases to 25 % of the total purchases. The said decision was confirmed by this Court as well. On consideration of the matter, we find that the facts of the present case are identical to those of M/s Indian Woolen Carpet Factory (supra) or M/s Vijay Proteins Ltd. In the present case the Tribunal has categorically observed that the assessee had shown bogus purchases amounting to Rs. 2,92,93,288/- and taxing only 25 % of these bogus claim goes against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made sales (which are not doubted), without making corresponding purchases. 7. In fact paragraph 8 of N.K. Industries (supra) reads 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 account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the selling price accordingly as a result of which profi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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