TaxTMI 
TaxTMI 
2020 (9) TMI 413
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....0-11 in ITA No. 3916/Mum/2016 order dated 15.5.2019 & Miscellaneous application order for the same year in M.A.No. 504/Mum/2019 order dated 7.2.2020. 3. Per contra, learned Departmental Representative Shri Sanjay Singh, CIT-DR and Shri Vinodkumar, Senior AR-CIT could not dispute this proposition that in assessee's own case the ITAT has taken a decision which has not been reversed by Hon'ble Jurisdictional High Court. 4. Since the facts are identical we are referring to facts and figures for A.Y. 2008-09. 5. Brief facts are that the assessee is in the business of supply of iron & steel. As per information which was received from the DDIT(lnv.), Mumbai to the effect that Shri Deveri Ashiwn Sanghavi, Prop, of M/s. Devdhar Steel had obtained accommodation purchase bills from various entities listed in Sales Tax Website which were declared as Hawala dealers by the Sales Tax Department, Mumbai. A survey u/s 133A of the Act was conducted in the assessee case on 21.11.2012 at Ginraj Building Sant Tukaram Road, Carnac Bunder, Mumbai, by the DDIT(Inv.), Unit-III, Mumbai. The list of suspicious dealers who indulge in issuing only bills without delivering any goods or materials is....
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....uestion along with the bank statement showing payment to the above mentioned parties, and (vii) Bank statement showing payment made to the parties mentioned in the reasons of reopening. In response to above notices, the appellant has submitted letter dated 20.02.2015 with regard to thirteen parties listed in the aforesaid notice considered by Assessing Officer as to be 'bogus' based on MVAT' list and providing a show cause for not considering transactions with them as sham and to add back the amount involved of the transactions to appellant income, he submitted as follows: "(i) AO has referred to the list placed by the MVAT Department on their site listing the names of parties who are considered by the said Department as "Hawala or Suspicious Dealers". These parties have been listed by the said department based on their suspicious deals or behaviors or providing declarations to the said department about their having indulged in Havala Transactions. That it is well known that the said department has provided the list for caution to the public in dealing with them since they have had defaults in their compliances about filing of the returns or payment of the dues under M....
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....) found that 100% addition was not justified and he followed his decision for A.Y. 2010-11 in assessee's own case and restricted the disallowance to 15%. Learned CIT(A) observed as under :- "6. The Grounds of Appeal from 4 to 8, the appellant has challenged the addition of Rs. 3,92,15,251/- on account of bogus purchases that are treated as unexplained expenses on purchases u/s 69C of the Act. Similar issue has been decided on similar facts and grounds in the Appeal No. CIT(A)-31/IT-18/ITO-20(2)(1)/13-14 vide order dated 15.03.2016 FOR A.Y. 2010-11 in appellant's own case at para 5. Keeping in mind the totality of circumstances as discussed above and the fact that the appellant has not brought on record any evidence to corroborate his arguments during appellate proceedings, and by following my own order in appellant's case for AY 2010-11, it is adequate to meet the ends of justice, when the disallowance has been restricted, to 15 percent of the bogus purchases of Rs. 3,92,15,251/- which amounts to Rs. 58,82,288/-. The AO is, therefore, directed to restrict the disallowance as above. The appellant, therefore gets a relief of Rs. 3,33,32,963/-. Th....
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.... were restricted to 25 to 12.5%. In the case of Nikunj Eximp Enterprises (supra), the Hon'ble High Court has held that merely because the supplier had not appeared before the Assessing Officer or the CIT (A), one could not conclude that the purchases were not made by the assessee. In the case of CIT vs. Simit P. Sheth 38 taxman.com 385 (Guj), the Hon'ble Gujarat High Court upheld the addition of 12.5% sustained by the Tribunal (applicable VAT @ 10% plus profit of 2.5%) on the ground that in the case of bogus purchases only profit element embedded in sale of such purchases should be added. We further notice that the AO has made addition of the entire amount of bogus purchases determined during the assessment proceedings, which is contrary to the findings of the Hon'ble Gujarat High Court. The AO has not rejected the sales made by the assessee. Once the sales are admitted the purchases cannot be rejected as there cannot be any sale without purchases. In the present case, the evidence on record is not sufficient to prove the genuineness of the purchases from the 13 hawala entities, therefore, Ld. CIT (A) has rightly sustained the addition estimating the profit element embedde....