TaxTMI 
TaxTMI 
2019 (5) TMI 2030
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....T(A) has raised before us the following grounds of appeal : "1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in making disallowance of non genuine purchase claims of Rs.15,47,800/- on the basis of G.P Ratio @ 12.5% on purchase (Rs.1,23,82,428/-) under the Income Tax Act 1961, without considering the facts of the case. 2. The appellant craves, leaves to add, alters, amends or deletes any grounds of appeal at the time of hearing." 2. Briefly stated, the assessee which is engaged in the business of trading in ferrous and non-ferrous metals under the name and style of Vijesh Metal (India) had filed his return of income for A.Y. 2009-10 on 26.09.2009, declaring total income at Rs.2,79,090/-....
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....ledger accounts, details of transportation of goods i.e lorry receipts, documentary evidence reflecting the relevant entries of having received such goods from the aforementioned parties, along with the details of payments made to them. On the basis of the addresses of the aforementioned parties made available by the assessee the A.O issued notices under Sec.133(6) by registered post to them, which however were returned bank unserved by postal authorities with the remarks 'not known', 'no such address' or 'left' etc. The A.O brought the aforesaid facts to the notice of the assessee and directed him to substantiate the authenticity of the aforementioned purchase transactions on the basis of supporting documentary evidence and also to produce....
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....mentioned parties. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) not finding favour with the contentions advanced by the assessee, dismissed the appeal. 5. The assessee being aggrieved with the order passed by the CIT(A) has carried the matter in appeal before us. We find that despite the fact that the assessee was put to notice as regards the date of hearing of the appeal, however has failed to put up an appearance before us. In the backdrop of the aforesaid facts, we are constrained to proceed with as per Rule 24 of the Appellate Tribunal Rules, 1962 and therein dispose off the appeal after hearing the respondent revenue and perusing the orders of the lower authorities. 6. Admitted....
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....iven for working out the profit element embedded in the purchases under consideration @ 12.5% of their aggregate value. In fact, we find that recently the Hon'ble High Court of Bombay in its recent judgement in the case of Pr. Commissioner of Income Tax-17 Vs. M/s Mohhomad Haji Adam & Company (ITA No. 1004 of 2016, dated 11.02.2019), while upholding the order of the Tribunal, had observed that the addition in the hands of the assessee as regards the bogus/unproved purchases was to be made to the extent of bringing the G.P rate of such purchases at the same rate as that of the other genuine purchases. The Hon'ble High Court while concluding as herein above, had observed as under: "8. In the present case, as noted above, the assessee....
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....inancial Year 1997- 98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6 % gross profit is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the selling price accordingly as a result of which profit comes to 5.66% Therefore, considering 5.66 % of Rs.3,70,78,125/- which comes to Rs.20,98,62 1.88 we think it fit to direct the revenue to add Rs.20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue." 9. In these circumstances, no q....