TaxTMI 
TaxTMI 
2019 (8) TMI 1436
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....e the Bench. 1.2 This is an appeal by assessee for Assessment Year [AY] 2009-10 which contest the order of Ld. Commissioner of Income-Tax (Appeals)-30, Mumbai, [in short referred to as 'CIT(A)'], Appeal No.CIT(A)- 30/19(3)/890/15-16 dated 17/02/2017 on following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) erred in (a) confirming addition of Rs. 8349395/- which is made on account of estimation of profit @ 12.50% on alleged bogus purchases of Rs. 66795161/- to the total income of the Appellant. (b) estimating rate of profit at 12.50% on alleged bogus purchases over and above gross profit declared of 4.10% by the appellant on s....
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....r proper perspective, without providing copies of material used against the appellant and without providing cross examination of parties whose statement are relied upon is liable to be annulled. 5. The learned assessing officer erred in charging interest under section 234A, 234B, 234C and 234D of the Act. 1.3 Facts in brief are that the assessee being resident individual stated to be engaged in the business of trading in ferrous / non-ferrous metals under proprietorship concern namely M/s Superior Steel Industries, was assessed for impugned AY u/s. 143(3) r.w.s. 147 on 27/03/2015 wherein income of the assessee was determined at Rs. 114.70 Lacs after sole addition of alleged bogus purchases for Rs. 83.49 Lacs as against returned ....
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....cer [AO], invoking the provisions of Section 145(3) rejected the books of account and estimated the addition on account of alleged bogus purchases @ 12.5% which resulted in to impugned addition of Rs. 83.49 Lacs in the hands of the assessee. 2. Aggrieved the assessee agitated the stand of Ld. AO before first appellate authority, however, relying upon the decisions of Hon'ble Supreme Court in CIT vs. Durgaprasad More (82 ITR 540) and Sumati Dayal vs. CIT (214 ITR 801), Ld. first appellate authority reached a conclusion that the assessee miserably failed to lead evidences to substantiate the purchase transactions and therefore, the addition made by Ld. AO was to be confirmed. Aggrieved, the assessee is in further appeal before us. 3....
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....ransactions and therefore, the estimations made by Ld. AO were fair. 4. We have carefully heard the rival submissions and perused relevant material on record and deliberated on judicial announcements as cited before us. We find that during assessment proceedings, on the basis of material on record as supplied by DGIT (Investigation), the allegations were made by revenue against the assessee that the assessee procured bogus purchase bills from as many as 11 suppliers. Notices issued u/s 133(6) were issued to these suppliers to confirm the transactions, however, the same remained unserved in 10 cases. The field inquiries made by ward inspector established that none of the supplier was existing at the given addresses. The assessee was confr....
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.... already reflected Gross Profit Rate of more than 4%, the estimation of 12.5% was on the higher side. We estimate the same @2% of alleged bogus purchases. The same works out to be Rs. 13,35,903/-. The balance additions stand deleted. The decision of lower authorities stands modified to that extent. 6. Our aforesaid view is in line with the recent decision of Hon'ble Bombay High Court rendered in bunch of appeals titled as Pr.CIT Vs. M/s Mohommad Haji Adam & Co. [ITA No.1004 & others of 2016, dated 11/02/2019] wherein Hon'ble Court distinguishing the cited case law of Hon'ble Gujarat High Court rendered in N.K. Industries Ltd. Vs Dy. C.I.T. in Tax Appeal No. 240 of 2003 and connected appeals decided on 20th June, 2016 observed as under: -....
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....es had admittedly been recorded in the regular books during Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6 % gross profit is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the selling price accordingly as a result of which profit comes to 5.66%. Therefore, considering 5.66% of Rs. 3,70,78,125/- which comes to Rs. 20,98,621.88 we think it fit to direct the revenue to add Rs. 20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favor of the assessee and partially in fav....