TaxTMI 
TaxTMI 
2020 (4) TMI 581
X X X X Extracts X X X X
X X X X Extracts X X X X
...., these appeals are clubbed, heard and disposed of by this consolidated order. 3. The brief facts of the case are, assessee is an individual and engaged in the business of scrap material and iron & steel. Assessee filed its return of income on 19.09.11 declaring total income of Rs. 16,17,750/-. Subsequently, AO received information from Sales Tax Department about large number of entities who have provided bogus purchase bills to a large number of tax payers. Based on the information, assessment was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act. AO has received information from Sales Tax Department that assessee has received bogus purchase bills from Sidhivinayak and Surat Tube Corporation. When assessee was asked to subs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 2008-09 7,55,36,012 3.19 24,05,876 1.07 8,11,220 2009-10 9,03,66,362 3.37 30,49,168 0.95 8,54,628 2010-11 8,05,85,931 5.24 42,21,737 1.29 10,38,165 2011-12 20,68,31,682 3.07 63,55,840 0.84 17,32,126 2012-13 11,88,19,441 3.65 43,34,151 1.22 14,44,247 2013-14 11,36,78,654 4.56 51,80,077 1.31 14,89,133 10.11 From the above chart, it is noticed that the gross profit rate has gone down from 4.66% in AYr 2007-08(non-hawala purchase year) to 3.07%, in AYr 2011-12 (hawala purchases year), the year in which the alleged hawala purchases, were booked, for which the appellant could not offer any valid explanation. These facts clearly established that the appellant had suppress....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Particulars Total sales affected Gr. Profit GP Ratio (%) Sales against purchases from hawala parties 1,24,89,960 1,27,999 1.025 Sales against purchases from regular parties 19,43,41,722 62,27,841 3.20 Total sales 20,68,31,682 63,55,840 3.07 10.13 From the above chart it is seen that the appellant had declared the GP @ (-) 1.39% & 1.02%, in respect of goods traded from alleged hawala parties, as against GP rate of 5.73% and 3.20%, in respect of goods traded from regular parties, in AYr 10-11 and 11-12, respectively. In compliance, the Ld AR could not offer any valid explanation, for selling goods at losses are at low margin, in respect of goods traded through hawala dealers. These facts clearly establish the fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vide letter dated 24.06.2016 has requested to restrict the disallowance at the most to the extent the GP fall. The contention of the Ld. AR appears to be logical and liable to be accepted. Accordingly the year wise appeals of the appellant are decided here, as under :- A Yr 2010-11 By booking alleged bogus purchases, as compared to the A.Y. 10-11, the appellant has suppressed its profit by Rs. 4,16,7157- (8,05,85,931 x 5.73% less GP declared Rs. 42,21,737). In compliance, the Ld. AR could not offer any valid reasons for fall in the GP rate. The appellant being whole sale trader and in the light of the decision of Gujrat HC in the case of Smit P Seth, the disallowance @ 12.5% of bogus purchases is worked out at Rs. 11,36,2937- (90,90,34....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a Gems Vs. JCIT 288 ITR 10(SC) and Hon'ble High Court's decision in the case of Vijay Protein, Sanjay Oil Cake Industries, etc.. 2. On the facts and in the circumstances of the case, and in law, the Hon'ble CIT(A) erred in not following the order of ITAT, Pune in UA No. 1411-1415 dated 20.02.2015 in the case of M/s. Kolte Patil Developers Ltd. wherein 100% addition of bogus purchases was confirmed. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in giving relief to the assessee to the extent of suppressed G.P. out of total bogus purchases even though- (i) The assessee could not produce primary evidences like Octroi Receipts, Delivery Challan etc. evidence to prove the genuineness of the purch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AO. 9. Considered the rival submission and material placed on record, we notice from the records that assessee is engaged in the business of scrap dealer in iron and steel market and assessee purchased the scrap materials from the various manufacturers or dealers. From the record, we notice that the AO has not disallowed the sales, but disputed only the purchases. Therefore, we cannot disallow 100% of the purchases and we have seen that various courts held that when the AO accepts the turnover without any dispute and in those situation, only the benefit enjoyed by the assessee are being considered for disallowance instead of 100% of purchases and considering the benefit enjoyed by the assessee for these type of transactions, the rate of di....