9911796707
TMI Blog2024 (8) TMI 1500X X X X Extracts X X X X X X X X Extracts X X X X ..... Accountant Member For the Appellant : Shri Nagnath Pasale. For the Respondent : None. ORDER PER RENU JAUHRI [A.M.] :- This appeal is filed by the revenue against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai-9 /National Faceless Appeal Centre, Delhi [hereinafter referred to as CIT(A) ] dated 24.11.2023 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as Act ] for Assessment Year [A.Y.] 2011-12. 2. The assessee has raised following grounds of appeal: 1. Whether on facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in directing the AO to make GP addition without appreciating the fact that in the investigation carried out by the Directorate of Investigation of Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of other genuine purchases has to be brought to tax. The position was reiterated in case of Principal Commissioner of Income-tax v. Nitin Ramdeoji Lohia 145 taxmann.com 546 (2022) wherein the Hon'ble HC remanded the matter back to the Tribunal to consider the issue of determining the gross profit ratio on the purchases found to be non-genuine. The court stated thus: We are in agreement with the view expressed by the CIT (Appeals) that, if the purchases are bogus, it would be impossible for the assessee to complete the business transaction and that if the purchase is bogus, the corresponding sale also must be bogus or else the transaction would be impossible to complete and as a necessary corollary, unless the corresponding sale is he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee procured the materials and goods, if not from the declared sources but from some other sources, it would not be possible on the part of the assessee to execute work awarded by MCGM. The Tribunal, therefore, held that the entire purchase made by the assessee could not be added back as income, but only profit element embedded therein, be treated as income of the assessee. 5.3.8. Further, in a later judgement than of N.K. Industries, the High Court of Gujarat in case of PCIT v. Surya Impex [2023] 148 taxmann.com 154 (Gujarat) also held that 11. Having found that the Assessing Officer has chosen not to reject the books of accounts of the assessee and had made the estimated additions of the pieces of the purchases. Both, the CIT (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the gross profit @ 12.5% against the gross profit of 1.03% shown by the assessee. The Court allowed the gross profit rate of 5% holding that 12.5% is drastically higher. In N.K. Industries (P.) Ltd. (supra), where the Court had considered the addition of entire amount on the ground that the fictitious purchases is a factually different than what was already held at Mayank Diamonds (P.) Ltd. (supra). In the other cases of Shri Bhanwarlal Jain also, addition rates are 3% to 5% where no further challenge possibly is there or it has not been processed further. This Court finds that no question of law, much less any substantial question of law arises for consideration of this Court. 5.3.9. Thus, adding back purchases without questioning the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
