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TMI Blog2024 (5) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus suppliers. The resultant gross profit from alleged bogus purchase and sales is 5.096%. The gross profit ratio without alleged bogus purchase and corresponding sales is 5.407%, which will result into addition of 0.3% of alleged bogus purchases of 1,15,86,557/-which would be minuscule. Looking at the minuscule amount of addition to be retained, we find it a reasonable and just to delete the addition and allow appeal of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... return filed as return in response to notice under Section 148 of the Act. He further asked for the reasons recorded which were provided and thereafter, notice under Section 142(1) of the Act was issued. 05. In assessment proceedings and reasons recorded for reopening, It was found that assessee has purchased material of ₹1,15,86,557/- from two parties M/s Chanchal Tube Corporation and Siddhi vinayak Steel, which are stated to be hawala party by Maharashtra sales tax department and DGIT, Investigation, Mumbai that these parties are bogus. The learned Assessing Officer issued notice under Section 133(6) of the Act to the hawala parties, which could not be served by the Postal Authorities and returned with remark 'not known'. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al purchased, he further shown the details of purchases from Siddhi Vinayak Steel and Chanchal Steel Corporation and corresponding sales made to other parties. ii. produced stock tally of kilograms and submitted that on the goods purchases of ₹1,15,86,557/-, same were sold for ₹1,22,08,684/-, resulting into gross profit of ₹6,22,127/-, showing gross profit of 5.09%. iii. Relied on the decision of the Hon'ble Bombay High Court in case of PCIT vs. Mohd. Haji Adam and Co. date 11 February 2019. iv. Submitted, gross profit chart to show that in the regular business of the assessee, the assessee has earned gross profit ratio of 5.41% and therefore, gross profit is shown by the assessee similar even if alleged bogus pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever as held by the honourable Bombay High Court in case of Mohmd. Haji Adam & company (supra) where sales are not disputed, no discrepancy between purchases shown by the assessee and the sales declared; only the addition should be restricted to the extent of bringing the gross profit on purchases at the same rate of other genuine purchases. On this mandate, it was found that assessee has given the quantitative sales corresponding to the quantitative purchase, which is from alleged bogus suppliers. The resultant gross profit from alleged bogus purchase and sales is 5.096%. The gross profit ratio without alleged bogus purchase and corresponding sales is 5.407%, which will result into addition of 0.3% of alleged bogus purchases of ₹1, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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