2022 (11) TMI 377

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ectively, qua the assessment orders for Assessment Years 2009-10 and 2010-11, respectively on the grounds interalia that:- ITA No.1952/Mum/2022 (A.Y. 2009-10) "Being aggrieved by the order passed by the Learned Assessing Officer (A..O) u/s 143(3) r.w.s. 147 of the Income Tax Act ('the Act') and as partly allowed by the CIT (A), your appellant prefers an appeal on the following grounds, which it is prayed, may be considered without prejudice to one another, i. (a) On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the action of the A.O and restricting the addition calculated by the A.O to 25% on alleged bogus purchases without appreciating the facts that the opinion of the A.O....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....thout prejudice to one another. 1. (a) On facts and circumstances of the case and in law, Ld. CIT(A) erred in enhancing the addition to 100% of purchases when the books are not rejected by the A.O . It is an proven fact by various judicial authorities that sales without purchases is not possible. (b) The CIT (A) erred in enhancement to 100% addition without appreciating the understated vital facts that the purchases are duly supported with necessary documentary evidences including quantitative tally of purchases and sales and there appears no sign of it being bogus and the learned officer accepted the books of accounts. (c) On facts and circumstances of the case and in law, Ld. CIT(A) erred in enhancing the additi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ikh Steels Pvt Ltd Rs.13,66,983/- 4. Murphy Metals Pvt Ltd Rs.14,13,703/- 5. Mercury Metal Corporation Rs.6,32,650/- 6. Alliance Steel Industries Rs.2,31,429/- Total Rs.63,52,693/- A.Y. 2010 -11 1. Mumbai Metal Corporation Rs.13,44,157/- 2. Vidhi Metal Industries Rs. 24,851/- 3. Ambika Enterprises Rs.17,03,095/- 4. P M Steel (INDIA) Rs. 4,15,895/- 5. Hindustan Steel Impex Rs. 8,65,678/- Total Rs.43,53,676/- 3. In Assessment Year 2009-10, the assessee reported to have shown purchases of Rs.63,52,993/- from the aforesaid parties which were not doing genuine business of purchases and sales but merely providing accommodation bills. To verify the genuineness of the purchases ma....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 5. We have heard the learned representatives of the parties to the appeal, perused the orders passed by learned lower Revenue Authority, case law relied upon and documents available on the record in the light of the facts and circumstances of the case. 5A. Undisputedly, entire assessment in this case has been framed by the Assessing Officer on the basis of alleged information received from Sales-tax Department. It is also not in dispute that during the assessment proceedings, the assessee was called upon to prove the genuineness of purchases by producing parties as well as by way of issuance of notices under section 133(6) of the Act. It is also not in dispute that both Assessing Officer as well as the Ld.CIT(A) have proceeded to make / c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....chases found to be bogus by the Revenue Authorities but sales by the assessee have been accepted as genuine as against these bogus purchases, we are of the considered view that when sales have been accepted being genuine the entire purchases cannot be treated as non genuine to make addition of the entire bogus purchases amount. Hon'ble High Court of Bombay in the case of JK Surface Coatings Pvt. Ltd. (supra) upheld the view taken by the Tribunal that in such circumstances gross profit should be in the range of 5% to 12.5% as reasonable estimation of profit element embedded in the bogus purchases by returning following findings: "4. Having considered the memo of Appeal and the Orders passed by AO / CIT(A) and the Order of I TAT,....