TaxTMI 
TaxTMI 
2025 (6) TMI 68
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....nd in law, the Ld. CIT(A) erred in restricting the addition from 12.5% to 4% of the total purchases of Rs 3,33,69,047/-which comes to Rs 13,34,761/- Without considering the facts that the assessee had failed to produce the parties from which the assessee had acquired bogus purchase bills so that they could be cross examined." 3. "On facts and circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition from 12.5% to 4% of the total purchases of Rs 3,33,69,047/- which comes to Rs 13,34,761/- Without considering the facts that the assessee had failed to controvert finding recorded by Income Tax Authorities and statement of Mr. Pravin Kumar Jain." 4. "On facts and circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition from 12.5% to 4% of the total purchases of Rs 3,33,69,047/- which comes to Rs 13,34,761/- Without considering the fact that the AO is a quasi-judicial authority and affidavit is not an evidence before him either in his capacity as a judicial authority or an investigating authority." 5 "On facts and circumstances of the case and in law, the Ld. CIT(A) erred in restricting the addition from 12.5% to 4% of the ....
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....ng with documentary evidences in respect of these alleged bogus purchase transactions from the aforesaid tabulated parties. Assessee made the submissions on various dates which included the following as noted by Ld.AO in his order: 1) Copy of return of income for A. Yr. 2006-07 and 2007-08 2) Copy of capital account/balance sheet for last two year 3) Copy of purchase bills ledger accounts of above-mentioned party of Mr. Pravin Kumar Jain and bank statements showing payments made to the above parties 4) Copy of affidavit by Sh. Praveen Kumar Jain stating the statement recorded by him were false and erroneous that were recorded under coercion & environment of pressure and threat by Income tax authorities at Mumbai. In the said affidavit, Sh. Pravin Kumar Jain has retracted his statement 5) Financials of three alleged concerns of Pravin Kumar Jain 6) Copies of bills/invoices in respect of purchase parties, ledger account along with Bank statement 7) Stock register of the assessee for the period. 01.04.2006 to 31.03.2007 8) MCA documents showing change of name in respect of three alleged concerns of Pravin Kumar Jain. 9) Copy of sales bills for F. Yr. 2006-07 10) De....
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....s profit is 8.51% which is higher than the average gross profit of 8.47% of last three years. Thus, there is no question of offering less gross profit on the alleged purchases. On these factual position, without prejudice, assessee submitted that addition be restricted to the extent of 2% of the alleged purchases. While concluding, Ld. CIT(A) observed that addition of gross profit @ 12.5% has increased the effective gross profit to 21% which according to the assessee is unjustifiable and not in line with the industry standard. By taking into consideration the submissions made without prejudice of restricting the addition to the extent of 2% of the alleged purchases, Ld.CIT(A) held that addition made by the Ld.AO @ 12.5% is on a higher side and thus, restricted it to 4% of the total alleged bogus purchases. For this he noted that percent of 12.5% was worked out based on sale tax rate of state of Gujarat. However, average sales tax rate in the state of Maharashtra for the period under considerations ranges from 3% to 6% as available on the web site of Maharashtra Goods and Service Tax. Thus, the appeal of was partly allowed. 9. Revenue is in appeal before the Tribunal for the relief....
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.... of cross-examining. 12. We also take note of the additional ground raised by the revenue for which Ld.SR DR referred to the decision of Hon'ble Jurisdictional High Court of Bombay in the case of Kanak Impex (India) Ltd. (supra). We have perused the said judgment. For the reliance placed by Ld. SR DR on the decision of Hon'ble Jurisdictional High Court of Bombay in the case of PCIT vs Kanak Impex (India) Ltd (supra) calling for addition of 100% of the alleged bogus purchases as against 25% made by the Ld.AO and confirmed by Ld. CIT(A), we have perused this aforesaid judgment. We observe that in para 4, Hon'ble Court noted the factual position that assessee did not appear before the Ld.AO during the course of assessment proceedings and failed to prove the genuineness of the purchase. The said assessment was completed ex-parte u/s. 144 r.w.s 147 of the Act. Hon'ble Court also observed in para 17 about the non-appearance of assessee before the Ld.AO for which there is no justification. Again, it noted in para 29 that the assessee chose not to attend the reassessment proceedings even though the notices were sent by post, email and affixture. Accordingly, in para 13, Hon'ble Court conc....