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TMI Blog2024 (7) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee partly. - Shri Pawan Singh, Judicial Member And Shri Bijayananda Pruseth, Accountant Member For the Assessee : Shri Ketan Shah, AR For the Revenue : Shri Vinod Kumar, Sr-DR ORDER PER BIJAYANANDA PRUSETH, AM: This appeal by the Revenue emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, the Act ) by the Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre, Delhi [in short, CIT(A) ], vide order dated 07.02.2024 for assessment year (AY) 2014-15. Grounds of appeal raised by the Revenue are as under: i) On the facts and in circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition made by the Assessing Office from 100% of the unverifiable purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the purchase transactions made from these paper companies to hide the true income of the assessee for the year under consideration. 2. The facts of the case in brief are that assessee is the proprietor of M/s Yash Exports, which is engaged in the business of import, export, trading in all kinds of diamonds. The assessee filed his return of income for the AY 2014-15 declaring total income of Rs. 3,51,080/-. Subsequently, case was selected for scrutiny in CASS by notice was issued u/s 143(2) of the Act on 29.08.2015. During the course of assessment proceedings, it was noticed that assessee has made transactions with the entities of Bhanwarlal Jain Group in which case a search and seizure action was carried out by the Investigation Wing, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for remand report from AO on 16.07.2019. After considering the remand report of the AO, submission / rejoinder of the assessee, decisions of Co-ordinate Bench of this Tribunal in case of Pankaj K. Chaudhary in ITA No.1152/AHD/2017 for AY 2007-08 dated 17.09.2021 and decision of Hon ble jurisdictional High Court in the case of Surya Impex [2023] 148 taxmann.com 154 (Guj), the Ld.CIT(A) held that disallowance of 100% is not sustainable on the facts and circumstances of the case and same was restricted to 6% of the bogus purchases. Aggrieved by the order of Ld.CIT(A) Revenue has filed present appeal before the Tribunal. 4. Before us, Ld.Sr-DR for the Revenue supported the order of AO. The Ld.Sr-DR stated that decision of Ld.CIT(A) does not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue are interconnected, which relates to restricting the disallowance of bogus purchases to the extent of 12.5%. The AO made of 100% of purchases shown from the hawala dealers/ entry provider namely Bhanwarlal Jain. We find that the AO while making additions of 100%, of disputed purchases solely relied on the report of the investigation wing Mumbai. No independent investigation was carried by the AO. The AO has not disputed the sale of the assessee. The AO made no comment on the evidences furnished by the assessee. We further find that ld CIT(A), while considering the submissions of the assessee accepted the lapses on the part of the AO and noted that no sale is possible in absence of purchases. The Books of the assessee was not rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the assessee has merely shown Gross Profit Rate only at 0.78% of turnover, accordingly, the ld. CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice. 21. We have seen that during the financial year under consideration the assessee has shown total turnover of Rs. 66,09,62,458/-. The assessee has shown Gross Profit @ .78% and net Profit @ .02% (page 11 of paper Book). The assessee while filing the return of income has declared taxable income of Rs. 1,81,840/- only. We are conscious of the facts that dispute before us is only with regard of the disputed purchases of Rs. 4.34 Crore, which was shown to have purchased from the entity managed by Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above that facts are similar in both cases. We also find that Hon ble jurisdictional High Court in case of Surya Impex (supra) dismissed appeal of Revenue against restriction of disallowance to 6% by holding that no substantial question of law arose for its consideration. Since there is no change in facts and law and since Revenue is unable to produce any material to controvert the aforesaid findings of the Co-ordinate Bench (supra), subsequently affirmed by Hon ble High Court, we find no reason to deviate from the decision of Co-ordinate Bench. Therefore, following the above decisions, we restrict the disallowance to 6% of the disputed bogus purchase of Rs. 1,23,84,050/-. The ground is dismissed. 7. In the result, appeal filed by the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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