TaxTMI 
TaxTMI 
2022 (2) TMI 1226
X X X X Extracts X X X X
X X X X Extracts X X X X
....Tax (Appeals) [hereinafter referred to as the Ld. CIT(A)], are being disposed of by way of composite order for the sake of brevity. 2. Appellant ITO, Ward No.1(1), Kalyan (hereinafter referred to as the Revenue) and the assessee Shri Kantilal Kachara Gada by filing the present appeal and cross objections sought to set aside the impugned order dated 08.09.2020 passed by the Ld. CIT(A) on the grounds inter alia that: ITA No.2016/M/2020 (Revenue) "1. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) has erred in not appreciating the fact that the assessee could not establish the genuineness of the purchases from the non-existent vendors as per information received from Law enforcement agency of State ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... said circular. Therefore, the order of the CIT(A) may kindly be vacated and that of the AO may be restored. 6. The appellant craves leave to add, amend, a1 any ground of appeal." CO No.147/M/2021 " 1) Ld. CIT (A) ignored the fact as well as of Law that proceeding under section 147 of Income Tax Act, 1961 initiated by the Assessing Officer is itself bad in Law void ab initio and illegal and liable to quash for the Assessment Year 2010 -11 2) Ld. CIT(A) erred of law as well as of fact that the reopening of the assessment cannot be done solely on the basis of the information received from the sales tax department without providing documentary evidence and cross examination of the so called hawala dealers to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e appellant. 6) The Ld. CIT(A) erred of fact as well as of law that the Ld. AO had accepted the entire sales of the appellant and there cannot be sales without purchases. 7) The Ld. CIT(A) erred of fact as well as of law by restricting the estimated addition on so called bogus purchases to the extent of 25% without appreciating the fact that the gross profit of the appellant is around 2.5% only. Comparison of Gross Profit Ratio: - Particulars/Assessment Year 08-09 09-10 10-11 11-12 12-13 Sales 1,27,84,543 3,15,35,248 8,79,09,414 9,02,79,280 5,77,56,205 Purchases 1,12,40,783 2,79,44,763 7,71,85,261 8,11,42,014 3,97,79,873 Gross Profit 709,316 13,07,086 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....me Tax Act (the Act). During the assessment proceedings the AO noticed that the assessee has debited purchases of Rs.7,72,11,266/- which includes purchases of Rs.3,38,26,408/- claimed to be made from the aforesaid party. On failure of the assessee to prove genuineness of the purchases by producing the party for verification, the AO proceeded to conclude that since the assessee has failed to prove that the purchases in question are genuine, the purchases amounting to Rs.3,38,26,408/- being not genuine are added to the total income of the assessee and thereby framed the assessment at the total income of Rs.3,45,05,530/- under section 143(3) read with section 147 of the Act. 4. The assessee carried the matter before the Ld. CIT(A) by way of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ases entire addition or the addition @ 25% as has been done by the Ld. CIT(A) is not sustainable because sales in this case have not been disputed by the Revenue Authorities and in these circumstances addition of the gross profit on average basis in the range of 5% to 12.5% can be made and relied upon the decision rendered by the Hon'ble Bombay High Court in the case cited as Pr. CIT vs. JK Surface Coatings Pvt. Ltd. in ITA No.1850 of 2017 order dated 28 October, 2021 and the decision rendered by the co-ordinate Bench of the Tribunal cited as M/s. Pavapuri Metals & Tubes vs. Income Tax Officer in ITA No.1148/M/2019 order dated 29.09.2020 and in the case of Ravindranathan Nair vs. Income Tax Officer in ITA No.2662/M/2018 order dated 31.12.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded in the bogus purchase when material consumption factor do not show abnormal deviation. 5. Whether the purchases were bogus or whether the parties from whom such purchases were allegedly made were bogus was essentially a question of fact. When the Tribunal has concluded that the assessee did make the purchase, as a natural corollary not the entire amount covered by such purchase but the profit element embedded therein would be subject to tax." 9. The Ld. A.R. for the assessee further contended that in this case the assessee has never earned the gross profit @ 25% as estimated by the Ld. CIT(A) and brought on record its gross profit earned and accepted by the Revenue in the earlier years as under: Particulars/Assessment Yea....