TaxTMI 
TaxTMI 
2016 (2) TMI 1027
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....l are arising out of the same order thus both the appeal were heard together and are decided by common order to avoid the conflicting decision. 2. Brief facts of the case are that the assessee filed return of income for relevant AY on 22.09.2003. The assessment was completed u/s 143(3) on 15.12.2011 assessing the total income of assessee at Rs. 44,57,300/-. Subsequently, the return of income was re-opened u/s 147 of the Act, on the basis that survey action u/s 133A conducted on 04.12.2010 by DG (Investigation), thereafter, information was received from DG (Invest) that the purchases shown to have been made by the assessee from the following parties; Sr No Name of parties Amount in Rs. 1 S. S. Enterprises 16,04,315/- 2 National Trad....
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....artmental Representative (DR) for the Revenue and perused the material available on record. The Ld. AR of the assessee at outset, made the statement that he is not pressing the ground no.1 raised by him with regard to re-opening of assessment u/s 147 of the Act. Considering the statement of ld. AR, Ground No.1 raised by assessee is dismissed as not pressed. 4. Ground No.2 raised by assessee and the ground of appeal raised by Revenue (Ground No.1 to 6) which are interconnected. The ld. DR for the Revenue argued that in assessee's own case for AY 2010-11the coordinate bench of Tribunal sustained the similar disallowance @12.5% of the similar bogus purchases. The copy of the Tribunal's order in ITA No.4384&4527/M/2015 was filed on record. The....
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....rs from whom the assessee claimed to have purchased the steel did not own up to such sales. However, vital question while considering whether the entire amount of purchases should be added back to the income of the assessee or only the profit element embedded therein was to ascertain whether the purchases themselves were completely bogus and non existent or that the purchases were actually made but not from the parties from whom it was claimed to have been made and instead may have been purchased from grey market without proper billing or documentation. In the present case, CIT believed that when as a trader in steel the assessee sold certain quantity of steel, he would have purchased the same quantity from some source. When the total sale ....
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....ommissioner adopted ratio of 30% of such total sales. The Tribunal, however, scaled down to 12.5%. We may notice that in the immediately preceding year to the assessment year under consideration the assessee had declared gross profit @ 3.56% of the total turnover. If the yardstick of 30%, as adopted by the Commissioner, is accepted GP 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 nature of business and no uniform yardstick can be adopted." 10. From the above, we find, the essential facts are comparable to that of the present case....