9911796707
Advanced Search 
TMI Blog2024 (6) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... fter referred to as "the Act"] for the A.Y. 2011-12, wherein the disallowance of Rs. 1,34,21,728/- was deleted and addition was restricted to 12.5% on bogus purchase whereas the Learned Assessing Officer, DCIT, 9(1), Mumbai (hereinafter referred to as the "AO") has made addition @100%. Aggrieved by the order of the Ld. CIT(A), the department is in appeal before us and raised the following grounds of appeal: a. "Whether on the facts and in circumstances of the case and in law, the Ld CIT(A)/NFAC has erred in deleting the disallowance of Rs. 1,34,21,728/-. Out of the total disallowance of Rs. 1,52,39,117/ made by AO due to bogus/unsubstantiated purchases?" b. Whether on the facts and in circumstances of the case and in law, the Ld CIT(A)/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attended by Mr. Bharat P. Shah, C.A. of the assessee. 4. The department has received information from the Maharashtra Sales department that certain persons have given bogus bills for purchases to the beneficiaries. The modus operandi of the bogus bill providers is simple. If somebody / beneficiary wanted to obtain the bills of purchase (i.e., sale for bogus bill providers), he will give a cheque to them. The bogus bill provider will issue a bill of desired amount and will deposit the cheque in his bank account. After clearing of the cheque, the bogus bill provider will deduct his commission and will give the remaining amount in cash to the beneficiary. The beneficiary will use the cash either to make cash purchases from unregistered deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has found the alleged sales from those parties as bogus sales. It is further submitted that the Ld. CIT(A) has not followed the settled law and the finding is therefore perverse and needs to be set aside. 8. The Ld. AR on the other hand submitted that the Ld. CIT(A) in the case of the assessee for the A.Y. 2009-10 and 2010-11 has restricted the addition to 12.5% as has been done in the present case and the department has accepted those decisions of the Ld. CIT(A) and has not challenged the same, therefore, nothing has been stated as to why the department is not accepting the restriction of addition to 12.5% by the Ld. CIT(A) for the A.Y. 2011-12. 9. It is further argued that the Ld. CIT(A) in the appeal for A.Y. 2010-11, order dated 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Vardhaman Trading Co., M/s. Rummet Enterprises and M/s. Atlantic Enterprises were returned unserved by the Postal Authorities with the remark "unknown". Also, the invoices and delivery challans produced by the appellant did not carry the seal/ stamp of any check post. The appellant did not produce the purchase orders. In view of the above, the AO was justified in holding that the purchases were not made from the parties mentioned in para 5.2.1 above. 5.4.2 With regard to the appellant's submission made in the course of the appellate proceedings that the disallowance made by the AO is too high and unreasonable, I find that the AO has not disallowed the entire purchases of Rs. 68,81,694/-. Instead, he has disallowed only 25% of such purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the bogus purchases which should be added back to the income of the assessee. The Commissioner adopted the ratio of 30 per cent of such total sales. The Tribunal, however, scaled down to 12.5 per cent. We may notice that in the immediately preceding year to the assessment year under consideration the assessee had declared the gross profit at 3.56 per cent of the total turnover. If the yardstick of 30 per cent, as adopted by the Commissioner (Appeals), is accepted the gross profit rate will be much higher. In essence, the Tribunal only estimated the possible profit out of purchases made through non-genuine parties. No question of law in such estimation would arise. The estimation of rate of profit return must necessarily vary with the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from unregistered dealers". Thus, there is no conclusive evidence that assessee has not purchased the material of Rs. 1,53,39,117/-. So, on surmises or doubts the disallowance of purchases cannot be done in assessee's case." 12. We have carefully considered the findings returned by the Ld. CIT(A) as reproduced above, the Ld. CIT(A) has considered the detailed submissions of the parties in very meticulous manner and has returned a well-reasoned and legally sustainable finding. The reason given by the Ld. CIT(A) are cogent and also appeals to the conscience of this Tribunal. Moreover, the Ld. DR on behalf of revenue has failed to produce any contrary material which may lead us to consider the material on record differently from the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
