TaxTMI 
TaxTMI 
2025 (12) TMI 1639
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....ferred to as 'the Act'). Heard both the parties. Case file perused. 2. Coming to the Revenue's sole substantive grievance raised in the instant appeal seeking to revive the Assessing Officer's action disallowing the assessee's alleged bogus purchases @ 15% which stand restricted to 5% in the CIT(A)/NFAC's order, we note that the lower appellate discussion under challenged to this effect reads as under: "7.2 As stated in the impugned order, during the re-assessment proceedings purchase transaction could not be verified from M/s Sungold Trade Pvt. Ltd. even after issuing notice u/s 133(6) of the Act. Further, assessee company had not furnished the required details i.e. proof of transportation of the goods purchased from the all....
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....had sold brass sheet on which it earned gross profit @ 0.66% whereas in A.Y. 2015-16 and 2016-17 the same was @ 0.51% & 0.86% respectively. The appellant has also relied on various judgments related to similar issues as mentioned in above para(s). 7.5 The similar issue is also discussed by the Hon'ble ITAT, Delhi in I.T.A. No.2109/DEL/2022 in the case of Bhartiya International Ltd. Dy. Commissioner of Income Tax, Circle-4(2), New Delhi in which same party i.e. M/S Sungold Trade Pvt. Ltd. is involved from purchase were made by the concerned party. The relevant para of the judgment are reproduced as under: "13.5 Before the Tribunal, the ld. counsel broadly reiterated the submissions made before the lower authorities and subm....
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....he basis of assessment order passed in the hands of such supplier, the AO has accepted the corresponding sale transactions. The exclusion of purchases from the trading results is not permissible without corresponding exclusion of the sales in such trading activity for arriving at a fair and balanced view. The action of the AO patently offends the rudimentary principle of accounting. We accordingly direct the AO to reverse the additions made and restore the position taken by the assessee." 7.6 The facts of the instant appeal are similar as discussed by Hon'ble ITAT, Delhi in I.T.A. No.2109/DEL/2022 in the case of Bhartiya International Ltd. Dy. Commissioner of Income Tax, Circle-4(2), New Delhi (supra) in which the same party i.e. M....
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....fication. After considering the reply of appellant in the end the Assessing Officer considered GP rate of 15% on the total purchases to meet the end of justice. 7.8 Considering, the facts discussed above, I hereby held that the AO has applied a G.P rate @15% in comparison to the preceding years which are less than 1%, therefore on a higher side. However, it is also a matter of fact that preceding years were not subjected to the scrutiny assessment. In such scenario the adhoc disallowance of alleged purchases are held valid in various judgements of higher courts. In the land mark case of M/s Vijay Proteins ltd. which was time and again referred to in various judgments of Hon'ble High Court and Tribunals the issue is whether....