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TMI Blog2020 (12) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... t in such type of cases having trade of ferrous and non ferrous steel items ,the profit GP can not exceed 3 to 4%. Though the Ld. CIT(A) has correctly followed the decision in the case of CIT vs. Simit P. Sheth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] however, the rate applied is on the higher side. We are, therefore, of the view that it would be reasonable if the GP rate @ 5% is applied on the said bogus purchases to bring the additional income on bogus purchases to tax which the assessee may have made by purchasing the goods from grey market. Accordingly, we direct the AO to apply a GP of 4% and the order of Ld. CIT(A) is modified to that extent. The appeal of the assessee is partly allowed. - SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some bogus accommodation purchase entries from 21 parties as mentioned in page No. 2 of the assessment order. The AO in order to verify the genuineness of the purchases also issued notice under section 133(6) which were not served with the remark that parties not known . Thereafter the AO vide letter dated 03.02.2014 called upon the assessee to provide the correct addresses so that the genuineness of the purchases could be verified. However, the assessee could not furnish the information called for despite various opportunities granted nor could produce these parties physically. Though the assessee has produced bills, vouchers of the purchases, stock tally and corresponding sales and modes of payment through banking channel before the AO, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT vs. Simit P. Sheth (supra), however, the rate applied is on the higher side. We are, therefore, of the view that it would be reasonable if the GP rate @ 5% is applied on the said bogus purchases to bring the additional income on bogus purchases to tax which the assessee may have made by purchasing the goods from grey market. Accordingly, we direct the AO to apply a GP of 4% and the order of Ld. CIT(A) is modified to that extent. The appeal of the assessee is partly allowed. 8. Since we have partly allowed the appeal of the assessee, the cross appeal by the Revenue becomes infructurous and is accordingly dismissed. 9. In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed. Order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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