2018 (12) TMI 818

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....H, JM: This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-53, Mumbai [in short CIT(A)], in appeal No. CIT(A)-53/IT-283/ITO-19(3)(5)/2017-18 vide dated 01.01.2018. The Assessment was framed by the Income Tax Officer, ward-19(3)(5) Mumbai (in short 'ITO/ AO') for the A.Y. 2011-12 vide dated 14.03.2016 under section 143(3) read with section 147 of the I....

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.... from hawala parties, as listed in hawala dealers by the Maharashtra Sales Tax Department who are providing bogus bills of purchase amounting to Rs. 55,75,279/- as admitted by these hawala dealers in their deposition before the authorities. The same reads as under: - Name of party Amount Apex Metal Corporation 22,82,884 Asian Metal Industries 2,49,288 Krishana Steel Industries....

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....me of the assessee Aggrieved, assessee preferred the appeal before CIT(A), who restricted the addition at 12.5% of bogus purchases by observing in paras 5.6 by following the decision of Hon'ble Gujarat High court in the case of CIT vs. Smith P. Seth (2013) 356 ITR 451 (Guj) by observing as under: - "56. Even if materials have been purchased, they are not purchased form these parties and m....

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.... proved, it is deemed fit to keep the disallowance @12.5%. Thus the Ground of appeal no. 2 on merits of disallowance is partly allowed." 5. I have considered the issue and gone through the facts and circumstances of the case. I find from the facts of the case and argument of both the sides that the CIT(A) has confirmed the profit rate at the rate of 12.5%, which according to me is on higher sid....