2016 (10) TMI 700

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....and disposed of in this consolidated order. Appeal wise adjudication is given in the following paras of this order. 2. This appeal filed by the assessee on 17.7.2015 is against the order of the CIT (A)-33, Mumbai dated 29.5.2015 for the assessment year 2010-2011. In this appeal, assessee raised the following grounds which read as under:- "1. Under the facts and circumstances, initiation of proceedings u/s 147 / 148 are illegal, without application of mind, mechanical, without jurisdiction and unsustainable in law as well as on merits. Without prejudice to above and in addition to the above ground: 2.1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in confirming arbitrarily t....

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....f the accommodation / bills entries and never delivered the goods to the assessee. The DGIT (Inv) office forwarded the statement of Shri Hiralal supporting the above. Accordingly, AO initiated the proceedings u/s 147 / 148 of the Act. AO issued notices u/s 133(6) of the Act to the said parties which were duly returned unserved. Accordingly, AO came to the conclusion that the parties are bogus and their names appeared in the list of entities on the official website of the Sales Tax Department ie www.mahavat.gov.in. Eventually, AO made assessment on the said amounts of purchases from both the parties ( ie S. S. Enterprises and National Trading Co) and the assessed income was determined at Rs. 44,00,052/-. Matter travelled to the first appella....

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.... fair in the assessee's case where the GP rate of the assessee is already 12.3% (para 45 of the CIT (A)'s order is relevant). Therefore, the same should be deleted. 8. On the other hand, Ld DR for the Revenue relied heavily on the contents of para 45 of the CIT (A)'s order and supported the decision of the CIT (A) in adopting the GP @ 12.5%. 9. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On hearing both the parties on this issue, we find the sales account is undisturbed in this case by the AO. Therefore, the jurisdictional High Court judgment in the case of CIT vs. Nikunj Eximp Enterprises Pvt Ltd reported in 2013-TIOL is applicable in this case. F....

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....the purchases were not bogus but were made from the parties other than those mentioned in the books of accounts. That being the position, not the entire purchase price but only profit element embedded in such purchases can be added to the income of the assessee. So much is clear by decision of this Court. In particular, Court has also taken a similar view in case of Commissioner of Income Tax-IV vs. Vijay M Mistry Construction Ltd. vide order dated 10.01.2011 passed in Tax Appeal No. 1090 of 2009 and in case of Commissioner of Income Tax-I vs. Bholanath Poly Fab Pvt. Ltd. vide order dated 23.10.2012 passed in Tax Appeal No. 63 of 2012. The view taken by the Tribunal in case of Vijay Proteins Pvt. Ltd. Vs. CIT reported in 58 ITD 428....

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....bill providers etc. Undoubtedly, the assessee is engaged in the construction activity and GP rate 12.5% is not uncommon. In the cited judgment, the addition @ 12.5% of the suspected purchases was confirmed by the Hon'ble High Court when the recorded profit of the assessee - Simit P Sheth (supra) is only @ 3.56%. Considering the above, we find, the CIT (A) is justified in adopting 12.5% of the suspected purchases for addition. Therefore, in our opinion, the order of the CIT (A) on this issue is fair and reasonable and it does not call for any interference. Thus, Ground no.2 raised by the assessee is dismissed. 11. In the result, appeal of the assessee is dismissed. ITA No.4527/M/2015 (AY 2010-2011) (By Revenue) 12. This appeal fi....