TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 1844
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....by ITO ward 25(2)(1), ITO ward 32(2)(4) & ITO Ward 32(1)(5), Mumbai for the A.Ys. 2009-10 & 2010-11 vide order dated 07- 03-2013,27-02-2015 & 03-03-2015 u/s 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only common issue in these three appeals, two by assessee (it is admitted by both the sides that in ITA No. 4877 and 4878/Mum/2016 there is no Revenue's appeal) and one by Revenue is as regards to the bogus purchases whereby application of gross profit rate is challenged. In ITA No. 4877 and 4878/Mum/2016, the assessee have raised the issues that the CIT (A) erred in confirming the addition made by AO on gross profit rate of 12.5% of the bogus purchases. For this assessee in ITA No.&nbs....
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....s Corporation 3,04,061 27030540755V Nageshwar Enterprises 1,35,002 27050534148V Aradhana Corporation 2,16,503 27960207776V Mihir Enterprises 4,38,566 27690556203V K K Enterprises 2,58,518 27490615192V Shubhlaxmi Sales Corp. 1,93,363 27540616280V Navdeep Trading Corporation 1,93,620 27280553858V DK Enterprises 2,20,875 27810355056V Grifton India Riddhi Enterprises 2,60,420 27490582406V Vidhi Metal Industries 78,14,152 27130593177V Navkar Traders 4,90,516 27450694269V Shakti Steel Corporation 68,377 27320620281V Rajratan Metal India 65,619 27290546432V Arbuda Steel 5,37,962 27600614113V Millenium Forge (India) 8,82,....
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....art reproduced above from the assessment order. According to AO Sales Tax Department carried out detail enquiries in respect of the above parties and recorded statements, deposition, affidavits etc. of main person of the above concerns establishes that these concerns is providing bogus bills and actually are hawala dealers. It also establishes that no actual goods are delivered by these parties and issued only bogus bills for commission. Before AO assessee contended that these purchase transactions are genuine and VAT has already been paid by assessee on the above purchases. The learned Counsel for the assessee before AO contended that the assessee is dealing in trading of Iron and Steel and considering the nature of the business of the ass....
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.....O. also fairly considered in para 9.6 of his order that there cannot be any sales without purchases. Therefore, the A.O. has mentioned that the assessee did make purchases but at a lower price so as to increase his overall profits. Since the A.O. has himself given substantial relief to the assessee by a speaking order I don't see any reason to interfere in the order of the A.O. The grounds of appeal No. 1 is dismissed and accordingly addition of Rs. 20,06, 845/- is confirmed." 5. Aggrieved, against the confirmation of disallowance of bogus purchase by applying gross profit rate at 12.5% assessee is in second appeal before Tribunal in both the cases. We have heard the rival contentions and gone through the facts and circums....
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....ingly. The appeals of assessee are partly allowed for statistical purposes. 6. Coming to the Revenue's appeal in ITA No. 3656/Mum/2013, we find that the facts are exactly identical as in the above case and CIT (A) has applied the profit rate at the rate of 8% by observing as under: - "I have gone through the facts of the case, contention of the AC and submissions of the appellant. It is an undisputed fact that Sales Tax Department did make enquiries regarding genuineness of the parties actually making the sale and it is also a fact that the Sales Tax Department got the statements of those persons stating that they were actually engaged only in providing accommodation entries for a certain commission fee. On his part, the AO....
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....has also not been discharged in terms of establishing the genuineness of the transaction. Merely filing copies of his own ledger accounts and bank accounts does in no way establish that the parties actually existed, but then considering that the books of accounts have not been disputed, sales have not been disputed and neither cheques have been shown to be received back as cash by the appellant, I am of the considered view that in the context of the situation where the AO has himself said that what is being doubted is not the quantity of purchases per Se, which has entered into the books of the appellant, but that the purchases were billed through bogus parties, then the cause of justice would be served by looking at the gross profit margin....