TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 653
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..... 2. On the facts and circumstances of the case, the Ld. CIT(A) erred in estimating the profit from Hawala purchases by disallowing only Rs. 34,320/- being 12.5% of the bogus purchases as even the basic onus of producing delivery challan, transport bills etc., were not fulfilled by the assessee. 3. The appellant prays that the order of the CIT(A) on the above grounds be reversed that of the Assessing Officer be restored. 4. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary." 2. Facts of the case are as emanated from appellate order:- "2.1. During the year under consideration, appellant has made purchases of Rs. 8,89,60,514/-. Out of the same, goods worth Rs. 2,74,560/- has been purchased from M/s Monarch Enterprise of Rs. 2,74,560/-. 2.2. It is submitted that copy of invoices and Ledger copy were already submitted to substantiate the purchases. Further, materials are purchased at the prevailing market price and are consumed/utilized for making of furniture by the Firm during the year. 2.3. Appellant had paid to the above party through proper banking channel with an account payee cheques. 2.4. It is pertinent to note t....
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....s. We have gone through the impugned order and herd both the parties Ld. CIT(A) has mentioned several orders of the High Court and Co-ordinate Benches wherein similar facts and circumstances Tribunal as estimated the gross profit addition in the hands of the purchaser on account of such bogus purchases @ 12.5%. In the case of Shri Ashwin Purshotam Bajaj vs. ITO in ITA No. 4736/Mum/2014 Co-ordinate Bench has held as follows:- "9. We have considered the rival contentions and also perused the material available on record. We have observed that the assessee is an individual running a proprietorship firm namely M/s The Shoe Box INC Retail Store of footwear, bags, belts, wallets and leather goods, boutique etc. having shops at different places, and office at Mumbai. Information was received by the AO from the Sales Tax Authorities, Government of Maharashtra that the assessee has made bogus purchases to the tune of Rs. 1.13 crores from following four parties who are in the list of hawala dealers giving accommodation entries without supplying any goods :- S No. Name of parties TIN Financial Year Amount 1. Rohit Enterprises 27020680974V 2009-10 Rs. 8,84,584 2. Deep En....
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....n this accommodation entries are to be added to the income cannot be faulted. The Id. CIT(A) restricted the addition by estimating GP ratio of 12.5% of Rs. 1,13,44,778/- being purchases from these alleged four accommodation entry providers. We do not find any infirmity in the well reasoned order of the Id. CIT(A) whereby net profit was estimated which was a reasonable estimation made by learned CIT(A) and we sustain/ affirm the order of learned CIT(A). In the result, we dismiss both the appeal of the assessee as well of Revenue. We order accordingly. 10. In the result, the appeal filed by the assessee in ITA No. 4736/Mum/2014 and the appeal filed by the Revenue in ITA No. 5207/Mum/ 14 for the assessment year 2010-1 1 are dismissed." In the case of Smt. Kiran Navin Doshi vs. ITO in ITA No. 2601/Mum/2016 Co-ordinate Bench has held as follows:- "6.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record. We find that the learned CIT(A) has addressed this issue in detail and after considering the submissions of the assessee, the AO's findings and various judicial pronouncements on this issue, has held that since the direct one ....
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....tiate the delivery of goods. Moreover the assessee has not produced the parties concerned for verification. Accordingly, the Ld. AO treated the amount of Rs. 41,23,015/- as bogus purchases and added back to the, total income of the appellant. Even during appellate stage, no fresh evidences have been submitted. 74 The appellant was asked to submit the details of purported purchases made and to show cause why the same should not be disallowed as bogus purchases. The Ld. AO observed that the appellant failed to furnish the supporting documentary evidence to support that the purchases were actually made by them from these parties such as transportation documents, inward register etc. The Investigation Wing of Mumbai had provided a list of hawala bill racketeers who were involved in issuing bills and also the list of beneficiaries. The Sales Tax Department of Mumbai had investigated all these cases thoroughly and prepared a list of such hawala operators and their beneficiaries which have been uploaded in their Website. The Ld. AO observed that these hawala operators were providing only accommodation entries and the appellant was also in the list of beneficiaries. Accordingly, ....
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....pen to evade tax. The Hon'ble Court further held that the Taxing Authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look in to the surrounding circumstances to find out the reality of the recitals made in those documents. 6.3.2 On an appreciation of the facts on record and the findings rendered by the learned CIT(A) in the impugned order (supra), we find that apart from raising these grounds (supra), the assessee has failed to place on record any material evidence to controvert the findings of the learned CIT(A). In this view of the matter, we uphold the order of the learned CIT(A) on this issue of bringing to tax in the assessee's hands the profits embedded in the bogus purchase @ 12% of the purchase cost i.e. Rs. 5,15,377/-, since the direct one to one relationship/nexus between the said purchases and sales have not been established by the assessee. Consequently ground No. II (iii to vii) is dismissed. 7. In the result, the assessee's appeal for A.Y. 2009-10 is dismissed." In the case of ITO vs. Manish Kanji Patel in ITA No. 7299/Mum/2014, 7154/Mum/2012 & 7300/Mum/2014 Coordinate Bench has h....