AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 1068
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.... & 2013-14 arise out of the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) in appeal No.CIT(A)-6, Mumbai/10180/2019-20 & NFAC/2012-13/10061980 dated 12/09/2022 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 31/12/2019 & 29/09/2021 by the ld. Dy. Commissioner of Income Tax 2(3)(1), Mumbai (hereinafter referred to as ld. AO). Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. ITA No. 2851/Mum/2022 - Asst Year 2012-13 - Assessee Appeal ITA No. 3282/Mum/2022 - Asst Year 2012-13 - Revenue App....
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....ssessee has received accommodation entries from Shubham Agro and Shree Hari Trading. The details of invoices, bank statements evidencing the payments made to the suppliers by account payee cheques, stock registers, confirmations etc in respect of the transactions with these 2 parties were duly filed by the assessee before the learned AO. The learned AO called for the transport bills etc which could not be produced , as the goods purchased were on FOB basis. However, details of vehicle numbers as available on the invoices were provided to the learned AO. The assessee submitted that the entire receipts of rice from these 2 parties are duly recorded in the stock register (Delhi) with quantity and value thereon and the stock register was produc....
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...., the learned AO proceeded to apply the profit of 34% on all the sales made by the assessee and made an addition of Rs 111,43,42,122/-. 3.2. The assessee further submitted that purchases from Shubham Agro and Shri Hari Trading have been made on CIF basis. This means that cost, insurance and freight were borne by the suppliers. When the goods are received in the assessee's godown, an entry is made for the receipt of goods in stock register daily. The name of the party is mentioned in the register. As regards the entries of the vehicle numbers, they are not in the nature of any financial information and have no impact on the profit and loss account. The assessee submitted that the learned AO had given more weightage to the vehicle numbers ....
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....lected in pages 33 to 35 of order of learned CIT(A). 3.3. We find that the learned CIT(A) after understanding the business model of the assessee company and the pricing mechanism involved thereon, observed that the learned AO had not demonstrated as to how the books of accounts maintained by the assessee are incorrect, incomplete and inconsistent or not in accordance with the Income Computation and Disclosure Standards (ICDS) for rejecting the books of accounts. Accordingly, the learned CIT(A) dismissed the action of the learned AO in rejecting the books of accounts of assessee and deleted the addition made in the sum of Rs 111,43,42,122/- on account of estimated gross profit on entire sales. We find no infirmity in the said action of th....
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.... in the instant case. Hence it would be just and fair to bring to tax only the profit element embedded in the value of such disputed purchases. Considering the peculiar business model operated by the assessee and considering the fact that the stock registers furnished by the assessee were not disputed by the revenue, we hold that adoption of gross profit percentage of 15% less gross profit declared by the assessee at 10.75% would meet the ends of justice in the peculiar facts and circumstances of the instant case. Accordingly, the ground numbers 2 & 3 raised by the assessee and ground raised by the revenue are partly allowed. 4. In the result, both the appeals of the assessee as well as the revenue are partly allowed for Assessment Year ....