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TMI Blog2017 (11) TMI 2051X X X X Extracts X X X X X X X X Extracts X X X X ..... e was constituted valid reason for reopening the assessment u/s 148 of the Act. We are in agreement with the conclusion drawn by the CIT(A) on the issue of reopening of the assessment and accordingly the cross objection raised against re-opening is dismissed. Addition at the rate of 17.5% of bogus purchases - We find that the assessee failed to prove the genuineness of purchases by producing the relevant documentary and circumstances evidences before the lower authorities as desired by them whereas the consumption of the materials is not disputed. Therefore, reasonable addition should be made to cover the various types of savings which the assessee might have made by purchasing the goods from the gray market. Accordingly, we feel reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the 100% made by the AO. 4. Facts in brief are that the assessee was engaged in diversified businesses such as octroi and toll collection, steel Industries, development construction of commercial , housing projects and government civil contracts. A search and survey actions were carried out on 18.2.2010 on Konarka Group and is associate concerns. Consequently the case of the assessee was assigned to Thane CIT-II. The assessee filed e-return of income u/s 139(1) on 30.9.2009 declaring total income at NIL. The AO received information from the State Sales Tax department that the assessee has availed entries of bogus purchase from hawala dealers to the tune of Rs.1,95,62,046/-. In order to verify the genuineness of the purchases, the AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), who partly allowed the appeal of the assessee by upholding the reopening of assessment u/s 147 of the Act and partly sustaining the addition to the extent of 17.5% of the total purchases after hearing various contentions and submissions of the assessee and considering various decisions of Hon ble High Courts and Tribunals. 5. We have carefully considering the rival parties and perused the material placed before us including the impugned orders and case laws relied upon by the assessee. In the cross-objection, the assessee has challenged the reopening of the assessment u/s 147 of the Act. After examining the records, we find that the reopening has been done on the basis of information from the Sales Tax Department, GOM that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that a reasonable addition should be made to cover the various types of savings which the assessee might have made by purchasing the goods from the gray market. Accordingly, we feel reasonable if the addition is sustained to the tune of 5% of the amount of bogus purchases. Accordingly, the CO of the assessee is partly allowed and appeal of the revenue is dismissed. As the addition made by the ld. CIT(A) at the rate of 17.5% of the bogus purchase is on higher side, it should be made on reasonable account which brings the tax and savings which the assessee might have made. Resultantly, the appeal of the revenue stands dismissed. ITA No.2589/Mum/2017 (by revenue) and CO 213/Mum/2017(by assessee) 6. Since we have decided the issue in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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