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TMI Blog2021 (3) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... hases. Grounds raised by the revenue are dismissed. - Shri C.N. Prasad, Hon'ble Judicial Member And Shri S. Rifaur Rahman, Hon'ble Accountant Member For the Assessee : Shri Subodh Ratnaparkhi. For the Department : Shri Vijay Kumar Menon. ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals) 25, Mumbai [hereinafter in short Ld. CIT(A) ] dated 03.06.2019 for the Assessment Year 2009-10. The only grievance of the Revenue in its appeal is Ld. CIT(A) erred in restricting the disallowance of purchases to 12.5% as against the entire purchases disallowed as non-genuine/bogus by the Assessing Officer. 2. Briefly stated the facts are that, the assessee engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lans, transport bills, etc., and only copy of bills of the parties have been submitted. Assessing Officer observed that the notices issued u/s. 133(6) of the Act to the party was returned unserved and the assessee has not produced the party before the Assessing Officer. Therefore, Assessing Officer treated entire purchases of ₹.10,02,379/- as non-genuine and added to the income of the assessee. On appeal the Ld. CIT(A) considering the evidences and various submissions of the assessee restricted the disallowance to an extent of 12.5% of the non-genuine purchases. 4. Ld. Counsel for the assessee reiterated the submissions made before the Ld. CIT(A) and prayed to upheld the order of the Ld. CIT(A). 5. Ld. DR vehemently supported the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, the assessee is a trader and the AO has not disturbed the sales of the assessee and its declared book profits are consistent over the couple of years. Therefore, it has to be the impugned purchases were done by it from unknown parties in the grey market and only fictious invoice had been taken from the hawala trader. In such cases, the assessee actually earns higher margins while making purchases from the grey market and this extra profit requires to be computed. It has been held by decisions of ITAT Mumbai and High Courts, that a rate of 12.5% of the declared invoice is reasonable in such cases. It is also noted that the case law of Nikunj Eximp (supra) is not applicable since the supplier have not given any confirmations and the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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