TaxTMI 
TaxTMI 
2019 (12) TMI 449
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....es disallowed as non-genuine/bogus by the Assessing Officer. 2. Briefly stated the facts are that, the assessee is engaged in the business of "Manufacturing of Dyes & Chemicals", filed return of income on 26.09.2010 for the A.Y.2010-11 declaring income of Rs..1,76,910/- and the return was processed u/s. 143(1) of the Act. Subsequently, Assessing Officer received information from Sales Tax Department, Mumbai about the accommodation entries provided by various dealers and assessee was also one of the beneficiary from those dealers. The assessment was reopened U/s. 147 of the Act based on the information received from Sales Tax Department, Mumbai, that the assessee has availed accommodation entries from M/s. Bhumi Enterprises and M/s. Payal....
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....see. Therefore, we proceed to dispose off this appeal on hearing the Ld. DR on merits. 4. Ld. DR vehemently supported the order of the Assessing Officer. 5. Heard Ld. DR on merits and perused the orders of the authorities below. On a perusal of the order of the Ld.CIT(A), we find that the Ld.CIT(A) considered this aspect of the matter elaborately with reference to the submissions of the assessee and the averments in the Assessment Order and considering various decisions of High Courts restricted the disallowance to 5% of the non-genuine purchases, while holding so, the Ld.CIT(A) observed as under: - "6.6 As regards the ratio of decisions in the cases of CIT v MK Brothers 163 ITR 249 (Guj), CIT I Vs.-Nikunji Exmp Enterprises P....
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.... hawala parties as genuine, sales made against such purchases, etc., I would like to place the reliance on finding of the Hon'ble Supreme Court, in the case of Lachminarayan Madan Lal v. CIT (1972) 86 ITR 439 (Supreme Court), wherein it is held that even if there is an agreement, between the assessee and its agents for payments of certain amounts as commission, assuming there was such payment, that does not bind the Income-tax Officer to hold that the payment was made exclusively and wholly for the purposes of the assessee's business. In this case, the Supreme Court inter alia, has observed as under:- "Although there might be such an agreement in existence and the payments might have been made, it is still open to the Incom....
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.... Ld. AR wasw required to furnish the comparative details of GP/NP and GP/NP rates for hawala years, preceding two years and subsequent two years. In compliance, the appellant has submitted the details, as under: Asst Yr. 2008-09 2009-10 2010-11 2011-12 2012-13 Turnover 55,67,993 66,30,229 74,33,850 92,91,251 1,09,27,065 GP 3,32,275 3,49,309 4,11,633 4,65,925 6,24,023 GP Rate 5.97% 5.27% 5.54% 5.01% 5.71% GP After Add of BP -- -- 9,18,328 -- GP Rate -- -- 12.35% -- NP 1,37,460 1,52,320 1,82,640 2,04,360 3,06,160 NP Rate 2.47% 2.30% 2.46% 2.20% 2.80% NP After add of BP -- ....