REETA JAIN, MUMBAI V. INCOME TAX OFFICER 30(3)(2), MUMBAI

ITA 1062/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5043 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 23-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Bogus purchase; Gross profit estimation; Principle of natural justice
• Section: 69C; 143(3); 133(6)

Judgement Text

ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 1 IN THE INCOME-TAX APPELLATE TRIBUNAL SMC BENCH M UMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 1062/MUM/2018 (ASSESSMENT YEAR 2010-11 ) MRS REETA JAIN 701, AHIMSA TOWER, CHINCHOLI BUNDER, MALAD(WEST), MUMBAI- 400064. PAN: ACAPJ7693Q VS. ITO - 30(3)(2) PRATYAKSHAR BHAVAN, BKC, BANDRA (EAST), MUMBAI- 400051. APPELLANT RESPONDE NT ITA NO. 1063/MUM/2018 (ASSESSMENT YEAR 2011-12 ) M/S REETA JAIN 701, AHIMSA TOWER, CHINCHOLI BUNDER, MALAD(WEST), MUMBAI- 400064. PAN: ACAPJ7693Q VS. ITO - 30(3)(2) PRATYAKSHAR BHAVAN, BKC, BANDRA (EAST), MUMBAI- 400051. APPELLANT RESPONDE NT APPELLANT BY : SHRI RAJESH SANGHVI (AR) RESPONDENT BY : SHRI S.K BEPARI (DR) DATE OF HEARING : 01.10.2018 DATE OF PRONOUNCEMEN T : 10.10.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THESE TWO APPEAL BY ASSESSEE ARE DIRECTED AGAINST T HE ORDER OF LD. CIT(A)-41, MUMBAI DATED 22.12.2017 FOR ASSESSMENT Y EAR 2010-11 & 2011-12. IN BOTH THE APPEAL, THE ASSESSEE HAS RAISE D THE IDENTICAL GROUNDS ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 2 OF APPEAL EXCEPT VARIATION OF FIGURES. FACTS OF BOT H THE APPEALS ARE ALSO IDENTICAL; THEREFORE, BOTH THE APPEALS WERE CLUBBED , HEARD AND ARE BEING DECIDED BY COMMON ORDER. WITH THE CONSENT OF PARTIE S, APPEAL FOR ASSESSMENT YEAR 2010-11 WAS TREATED AS LEAD CASE. I N APPEAL FOR ASSESSMENT YEAR 2010-11, THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL: 1) IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED BY CONFIRMING THE ADDITION OF RS. 18,23,371/- (BEING 8% OF THE ALLEGED HAWALA PURCHASE OF RS. 2,28,19,876/-) AND BY FURTHE R ENHANCING THE ADDITION BY RS. 2,09,96,505/- U/S 69C 2) IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED BY IGNORING THE RULES OF NATURAL JUSTICE, NOT PROVIDING MATERIAL BEFORE THE AO AND HIMSELF AND BY NOT PROVIDING CROSS EXAMI NATION OF THE RELEVANT PARTIES. 3) IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED BY CONFIRMING THE ADDITION AND MAKING THE ENH ANCEMENT DUE TO ABSENCE OF THIRD PARTY INDEPENDENT EVIDENCES AND IG NORING THAT BOOKS OF ACCOUNTS WERE REJECTED AND IGNORING THE IMPORTANT O BSERVATIONS BY THE AO IN PARA 6.1, 6.3 AND 6.4 OF THE ASSESSMENT ORDER. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DEALER IN ALL KIND OF PAPERS, FILED HER RETURN OF INCOME FOR ASSESSMENT Y EAR 2010-11 ON 21.09.2010 DECLARING TOTAL INCOME OF RS. 3,76,540/- . THE RETURN WAS PROCESSED AND ACCEPTED UNDER SECTION 143(1) OF THE ACT. THE ASSESSMENT WAS RE-OPENED ON THE BASIS OF INFORMATION RECEIVED FROM SALE TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, ABOUT THE AS SESSEE, BEING ONE OF THE BENEFICIARIES WHO HAVE TAKEN ACCOMMODATION E NTRIES FROM HAWALA ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 3 DEALERS DECLARED BY MAHARASHTRA SALE TAX DEPARTMENT . THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S 147 OF THE ACT ON 22.02.2016. THE ASSESSING OFFICER DURING THE RE-ASSESSMENT PROC EEDING IDENTIFIED ELEVEN PARTIES, THE NAME OF WHICH WERE FIGURED IN T HE LIST OF HAWALA DEALERS. THE ASSESSEE HAS SHOWN THE PURCHASES OF RS . 2.28 CRORE DURING THE RELEVANT FINANCIAL YEAR. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) TO ALL THE SAID PARTIES CALLING FOR QUANTITATIVE DETAILS OF SALES, COPY OF LEDGER ACCOUNT OF ASSESSEE IN THEIR BOOKS, COPY OF BANK STATEMENT. THE NOTICES WERE EITHER RETURNED BACK WI TH THE REMARK NOT KNOWN/REFUSED. THE ASSESSEE HAS GIVEN OPPORTUNITY TO PROVE THE GENUINENESS. IN RESPONSE TO THE SHOW-CAUSE NOTICE, THE ASSESSEE FILED ITS REPLY DATED 09.02.2016, ALONG WITH THE REPLY, THE A SSESSEE FILED LEDGER ACCOUNT OF ALL ELEVEN PARTIES, COPIES OF INVOICES A ND CHALLANS. THE ASSESSEE ALSO FURNISHED THE BANK STATEMENT HIGHLIGH TING THE DETAILS OF PAYMENT. THE ASSESSEE FURTHER CONTENDED THAT WITHOU T THE PURCHASES SALE IS NOT POSSIBLE. THE ASSESSEE SPECIFICALLY CONTENDE D THAT IT MAY BE POSSIBLE THAT THOSE PARTIES MIGHT HAVE BEEN ISSUED BOGUS BILLS TO SOME OTHER PARTIES IN THEIR NORMAL COURSE OF BUSINESS TR ANSACTION; HOWEVER, THE ASSESSEE HAS MADE GENUINE BUSINESS TRANSACTION WITH THOSE PARTIES. THE ASSESSEE ALSO CONTENDED THAT THE TRANSACTION IS MOR E THAN FIVE YEARS OLD ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 4 AND IT IS NOT POSSIBLE TO PRODUCE THE PARTIES. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER ON H IS VIEW THAT ONUS IS UPON THE ASSESSEE TO PROVE WITH WHAT HAS BEEN STATE D/ACCOUNTED IN BOOKS IS TRUE AS WELL AS GENUINE. THE ASSESSEE SHOULD HAV E PRODUCED THE PARTIES BEFORE THE ASSESSING OFFICER ALONG WITH INWARD REGI STER, LORRY RECEIPT AND PURCHASE OF GOODS FROM THE PARTIES. THE ASSESSING O FFICER FURTHER RECORDED THAT APART FROM THE LEDGER ACCOUNTS, COPIE S OF BILLS AND PAYMENT BY WAY OF CHEQUE, THE ASSESSEE HAS NOT PRODUCE THE DELIVERY CHALLAN AND TRANSPORT DETAILS NEITHER TO PROVE THE GENUINENESS OF PURCHASES NOR TO PRODUCE THE PARTIES. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAS DECLARED GROSS PR OFIT OF RS. 35,74,420/- BEING GROSS PROFIT @ 7.15% OF THE TURNOVER. AFTER CONSIDERING THE NATURE OF BUSINESS OF ASSESSEE AND THE RATIO OF NON-GENUIN E PURCHASES TO THE TOTAL TURNOVER, THE ASSESSING OFFICER ESTIMATED THE GROSS PROFIT TO 10.81%, THEREBY MADE THE ADDITION OF RS. 18,23,371/-. 3. ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS N OT ONLY CONFIRMED, BUT IT WAS FURTHER ENHANCED BY MAKING ADDITION OF R S. 2,09,96,505/- TO THE TOTAL INCOME OF ASSESSEE. THE LD. CIT(A) ENHANC E THE ADDITION ON HIS OBSERVATION THAT THE ASSESSEE FAILED TO PRODUCE THE PARITIES CONCERNED AS WELL AS VITAL EVIDENCE LIKE INWARD REGISTER, LORRY RECEIPT FOR PURCHASE OF ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 5 GOODS, REGULAR STOCK REGISTER AND PROOF OF PAYMENT RECEIVED AGAINST SALE. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE AND THE LD. DEPARTMENTAL REPRE SENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. WE HAVE ALSO DELIBERATED ON THE VARIOUS CASE LAWS RELIED BY LOWE R AUTHORITIES. THE LD. AR OF THE ASSESSEE SUBMITS THAT FILING OF APPEAL BE FORE THE FIRST APPELLATE AUTHORITY (FAA) HAS BECOME CURSE FOR THE ASSESSEE, THE LD. CIT(A) INSTEAD OF CONSIDERING THE FACTS OF THE CASE SYMPAT HETICALLY ENHANCE THE ADDITION BY MAKING DISALLOWANCE OF PURCHASES OF AGG REGATE OF ALL OF THE ALLEGED BOGUS PURCHASES FROM ALL ELEVEN PARTIES. TH E LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSEE IS DEALERS OF PA PER AND DECLARED GROSS PROFIT (GP) @ 7.15%. THE LD. AR OF THE ASSESSEE FUR THER SUBMITTED THE CHART OF FINANCIAL WORKING FROM ASSESSMENT YEAR 200 9-10 TO 2014-15, SHOWING THE DETAILS OF PURCHASES, SALES, GROSS PRO FIT, GROSS PROFIT RATION, NET PROFIT, NET PROFIT RATION OF ALLEGED BOGUS PURC HASES IDENTIFIED/DISPUTED BY REVENUE. THE ASSESSING OFFIC ER REJECTED THE BOOKS OF ACCOUNT OF ASSESSEE AND MADE ADDITION AND ESTIMA TED THE GP OF ASSESSEE AT 10.81% BY CONSIDERING ALL THE FACTS. TH OUGH THE GP ADDITION ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 6 MADE BY ASSESSING OFFICER WAS ON HIGHER SIDE, THE A SSESSEE APPROACHED THE LD. CIT(A) FOR FURTHER RELIEF, HOWEVER THE LD. CIT(A) MADE THE ADDITION OF ENTIRE PURCHASES FROM 11 PARTIES. THE L D. AR OF THE ASSESSEE SUBMITS FOR SUBSEQUENT YEAR I.E. ASSESSMENT YEAR 20 12-13 THE ASSESSING OFFICER MADE SIMILAR ADDITION AND ESTIMATED THE GP AT 7.04% AGAINST 5.52% SHOWN BY ASSESSEE. ON APPEAL BEFORE THE LD. C IT(A), THE ADDITION WAS SUSTAINED AND ON FURTHER APPEAL BEFORE THE ITAT , THE DISALLOWANCE WAS CONFIRMED. THE LD. AR OF THE ASSESSEE SUBMITS T HAT FACTS FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL COMPARED TO THE A SSESSMENT YEAR 2012- 13 AND THEREFORE, THE DISALLOWANCE ON ACCOUNT OF AL LEGED BOGUS PURCHASES IN ANY CASE SHOULD NOT EXCEED MORE THAN THE DISALLO WANCE MADE BY ASSESSING OFFICER. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF AUTHORITIES BELOW. THE LD. DR FURTHER SUBMITS THAT THE HONBLE GUJARAT HIGH COURT IN CASE OF N.K. PROTEINS LTD. VS. DCIT I N TAX APPEAL NO. 240-242/2003 DATED 20.06.2016 HELD THAT ONCE A FIND ING OF FACT HAS BEEN GIVEN THAT ENTIRE PURCHASES IS SHOWN FICTITIOUS INV OICES AND DEBITED IN PROFIT & LOSS ACCOUNT ARE ESTABLISHED AS BOGUS. THE ENTIRE PURCHASES ARE LIABLE TO BE DISALLOWED. THE FACTS OF N.K. PROTEINS LTD. (SUPRA) ARE FULLY ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 7 APPLICABLE ON THE PRESENT CASE AND THAT THE ASSESSE E IS NOT ENTITLED FOR ANY RELIEF. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS ING OFFICER MADE THE ADDITION BY REJECTING THE BOOKS OF ACCOUNT. THE ASS ESSING OFFICER WHILE ESTIMATING THE GP ADDITION OBSERVED THAT THERE CANN OT BE A UNIFORM YARDSTICK IN MAKING THE ESTIMATION, THE ESTIMATION BY RULE OF THUMB AS ABSOLUTELY INFIRM. THE ESTIMATION MUST NECESSARILY VARY WITH THE NATURE OF BUSINESS; JUDGMENT CAN ONLY BE BASED ON THE MATE RIAL AVAILABLE ON RECORD, PAST RECORD AND CONSIDERING THE TOTALITY OF THE FACT. THE ASSESSING OFFICER CONCLUDED THAT REAL INCOME IS NEITHER NOTIO NAL NOR ASTRONOMICAL, INCOME BE ESTIMATED WHILE MAKING GP ESTIMATION. WE HAVE NOTED THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE SALE OF THE ASSESSEE. THE ASSESSING OFFICER REJECTED THE BOOKS ON HIS OBSERVA TION THAT THE PURCHASES SHOWN BY ASSESSEE ARE UNVERIFIABLE. 7. THE LD. CIT(A) DURING THE FIRST APPELLATE STAGE ISS UED NOTICE OF ENHANCEMENT UNDER SECTION 251(2) DATED 16.10.2017 A S TO WHY THE PURCHASES OF RS. 2.28 CRORE FROM ELEVEN PARTIES IDE NTIFIED DURING THE ASSESSMENT PROCEEDING SHOULD NOT BE TREATED AS BOGU S. THE ASSESSEE FILED ITS REPLY DATED 13.11.2017. IN THE REPLY, THE ASSES SEE CONTENDED THAT SHE ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 8 HAS PURCHASED THE GOODS AS MENTIONED IN THE TRANSAC TIONS AND ARE PROPERLY ACCOUNTED. THE PURCHASES HAVE BEEN AFFECTE D FOR TRADING AND GOODS ARE SOLD TO VARIOUS REPUTED PARTIES. THERE IS NO DISPUTE REGARDING THE SALES. THE ASSESSEE ALSO CONTENDED THAT ALL THE VENDORS DURING THE PERIOD WERE REGISTERED WITH THE SALE TAX DEPARTMENT . THE SALE TAX DEPARTMENT FOUND THOSE DEALERS AS THEY FAILED TO DI SCHARGE THEIR LIABILITY OF TAX TO THE SALE TAX DEPARTMENT. THE ASSESSING OF FICER NEVER DOUBTED THE SALES OF THE ASSESSEE. THERE CANNOT BE SALE WIT HOUT PURCHASE. THE ASSESSEE HAS PROPERLY DISCHARGED HIS OPINION IN FUR NISHING LAST KNOWN ADDRESS OF ALL THE PARTIES, PROOF OF PAYMENT, AND C OPY OF ACCOUNT. THE ASSESSING OFFICER SHOULD HAVE ISSUED SUMMONS TO ENF ORCE THE ATTENDANCE OF THE PARTIES AND TO GIVEN AN OPPORTUNITY TO ASSES SEE TO CROSS-EXAMINE. THE PROPOSED ENHANCEMENT IS NOT JUSTIFIED AS THE EN TIRE PURCHASES CANNOT BE ADDED TO THE INCOME WHEN THE SALES ARE GENUINE A ND PURCHASES ARE MADE BY CHEQUES. 8. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY LD. CIT(A). THE LD. CIT(A) OBSERVED THAT ASSESSING OFFICER ISSUED NOTIC E TO ALL THE PARTIES UNDER SECTION 133(6), WHICH WERE RETURNED UN-SERVED BY POSTAL AUTHORITIES. THE ASSESSEE WAS GIVEN OPPORTUNITY TO PRODUCE THE PARTIES FOR VERIFICATION. THE ASSESSEE EXPRESSED HER INABILITY TO PRODUCE THE PARTIES. ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 9 THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE INWARD REGISTER, LORRY RECEIPT FOR PURCHASE OF GOODS FROM THE PARTIE S. THESE VITAL DOCUMENTS WERE NOT PRODUCED. THE ASSESSEE PRODUCED THE ONLY DOCUMENT SUCH AS LEDGER ACCOUNT, COPY OF PAYMENTS, PAYMENT M ADE BY CHEQUES. THE LD. CIT(A) CONCLUDED THAT THE ASSESSEE FAILED I N HIS DUTY TO PRODUCE THE PARTIES AND TO PRODUCE THE VITAL EVIDENCE LIKE INWARD REGISTER, LORRY RECEIPT FOR PURCHASE OF GOODS. ALL THE PARTIES WERE NOT FOUND AT THEIR GIVEN ADDRESS. THE RE-CONCILIATION WERE NOT PRODUCE D FOR VERIFICATION BEFORE ASSESSING OFFICER OR BEFORE THE LD. CIT(A). THE LD. CIT(A) ALSO CONCLUDED THAT THE ASSESSEE HAS NOT PRODUCED THE PH YSICAL STOCK REGISTER, CONFIRMATION OF PARTIES, DELIVERY CHALLAN, LORRY RE CEIPT, OCTROI PAYMENT, CONFIRMATION OF BROKERAGE, QUANTITATIVE TALLY, SALE S REGISTER/PAYMENT, CONFIRMATION THROUGH TRANSPORT, RECORD OF GODOWN KE EPER AND RATE COMPARISON. THUS, THE LD. CIT(A) DISALLOWED THE ENT IRE PURCHASES IN THE IMPUGNED ORDER. 9. WE HAVE SEEN THAT LD. AR OF THE ASSESSEE HAS FILED FINANCIAL WORKING FROM ASSESSMENT YEAR 2009-10 TO 2014-15. IN THE ASSESSME NT YEAR, THE ASSESSEE HAS SHOWN THE PURCHASES OF RS. 4.23 CRORE AND SALES OF RS. 4.57 CRORE AND DECLARED GP @ 7.15% AND NET PROFIT OF 0.8 9%. HOWEVER, NO BOGUS PURCHASES WERE IDENTIFIED BY REVENUE. FOR ASS ESSMENT YEAR 2010- ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 10 11, THE ASSESSEE HAS SHOWN THE PURCHASES OF RS. 4.5 5 CRORE AND SALES OF RS. 4.99 CRORE ON WHICH GROSS PROFIT IS DECLARED AT 7.16% AND NET PROFIT AT 1.5%. THE REVENUE HAS IDENTIFIED 50% PURCHASES A S BOGUS (THOUGH THE ASSESSEE CLAIMED OTHERWISE). FOR ASSESSMENT YEAR 20 11-12. THE ASSESSEE HAS SHOWN THE PURCHASES OF RS. 7.03 CRORE AND SALES OF RS. 7.52 CRORE ON WHICH GROSS PROFIT WAS DECLARED AT 6.79% AND NET PR OFIT AT 1.19%. THE REVENUE HAS IDENTIFIED 20% OF PURCHASES AS BOGUS. F OR ASSESSMENT YEAR 2012-13, THE ASSESSEE HAS SHOWN THE PURCHASES OF RS . 8.22 CRORE AND SALES OF RS. 8.87 CRORE ON WHICH GROSS PROFIT IS SH OWN AT 5.52% AND NET PROFIT AT 1.10%. THE REVENUE HAS IDENTIFIED 9% OF P URCHASES AS BOGUS. FOR ASSESSMENT YEAR 2013-14, THE ASSESSEE HAS SHOWN THE PURCHASES OF RS. 7.13 CRORE AND SALES OF RS. 7.76 CRORE ON WHICH GROSS PROFIT IS SHOWN AT 6.27% AND NET PROFIT IS SHOWN AT 1.12% FOR THIS YEAR, THE REVENUE HAS NOT IDENTIFIED THE BOGUS PURCHASES. FOR BETTER APPR ECIATION OF FACT, THE FINANCIAL STATEMENTS FROM ASSESSMENT YEAR 2009-10 T O 2013-14 ARE SUMMARIZED BELOW. ASST YEAR 09-10 10-11 11-12 12-13 13-14 14-15 PURCHASES 4,23,82,616 4,55,47,075 7,03,04,034 8,22 ,16,541 7,13,14,033 1,35,69,690 SALES 4,57,83,275 4,99,33,316 7,52,38,261 8,87,42, 135 7,76,86,392 2,04,21,774 GROSS PROFIT 32,73,321 35,74,420 51,07,271 48,95,466 48,69,001 9 ,06,528 GP RATIO 7.15% 7.16% 6.79% 5.52% 6.27% 4.44% NET PROFIT 4,07,756 5,22,366 8,94,914 9,73,547 8,70 ,750 (52,865) NP RATIO 0.89 1.05% 1.19 1.10 1.12 (0.26) ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 11 ALLEGED PURCHASES 2,28,19,876 1,44,11,857 73,75,136 - 0 RATIO OF BOGUS PURCHASE TO TOTAL PURCHASE 0% 50% 20% 9% 0% 0% 10. WE HAVE NOTED THAT FOR ALL ASSESSMENT YEAR BEGINNIN G FROM 2009-10 TO 2013-14, THE ASSESSEES AVERAGE GROSS PROFIT @ 5.68 % AND AVERAGE NET PROFIT @ .93%. HOWEVER, FOR THE YEAR UNDER CONSIDER ATION THE ASSESSEE HAS SHOWN GP @ 7.16% AND NP @ 1.05%. WE HAVE FURTH ER NOTED THAT THE ASSESSING OFFICER HAS NOT DOUBTED THE SALE OF T HE ASSESSEE; SALE IS NOT POSSIBLE WITHOUT PURCHASES. 11. CONSIDERING THE SUBMISSIONS OF THE LD REPRESENTATIV ES OF THE PARTIES, AND FACTS OF THE CASE AND THE DETAILS OF FINANCIAL WORK ING FURNISHED BEFORE US, AND THE PECULIARITY OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE FINDING OF THE LD CIT(A) IS NOT SUSTAINABLE UNDER THE LAW. IT IS SETTLED POSITION THAT, UNDER THE INCOME-TAX ACT ONLY REAL INCOME CAN BE TAXED BY THE REVENUE, EVEN IN CASES WHERE WHOLE TRANSACTION IS N OT VERIFIABLE DUE TO VARIOUS REASONS, THE ONLY TAXABLE IS THE TAXABLE IN COME COMPONENT AND NOT THE ENTIRE TRANSACTION. THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. HARIAM BHAMBHANI IN ITA 313/2013 DECIDED ON 04.02.2015 ALSO HELD THAT REVENUE IS NOT ENTITLED TO BRING THE ENTI RE SALE CONSIDERATION TO ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 12 TAX BUT ONLY PROFIT ATTRIBUTABLE ON SUCH UNRECORDED SALE CONSIDERATION ALONE CAN BE SUBJECT TO INCOME-TAX. AFTER CONSIDERI NG THE NATURE OF BUSINESS ACTIVITIES OF THE ASSESSEE CONDUCTED DURIN G THE RELEVANT PERIOD. WE ARE OF THE VIEW THAT IN ORDER TO FULFILL THE REV ENUE LEAKAGE, THE DISALLOWANCE OF REASONABLE PERCENTAGE OF IMPUGNED/D ISPUTED PURCHASES WOULD MEET THE END OF JUSTICE. THUS, WE ARE OF THE VIEW THAT ESTIMATING THE GP OF ASSESSEE @ 10.81%,WHICH WOULD BE SUFFICIE NT TO FULFILL THE POSSIBILITY OF REVENUE LEAKAGE. HENCE, THE ORDER OF LD CIT(A) IS REVERSE AND ASSESSING OFFICER IS RESTORED. THE ASSESSING OF FICER IS DIRECTED ACCORDINGLY. IN THE RESULT THE GROUND NO. 1 TO 3 OF THE APPEAL R AISED BY THE ASSESSEE ARE PARTLY ALLOWED. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 1063/MUM/2018 FOR AY 2011-12 BY ASSESSEE 13. THE ASSESSEE HAS RAISED IDENTICAL GROUNDS OF APPEAL EXCEPT VARIATION OF FIGURE. CONSIDERING OUR DECISION IN APPEAL FOR AY 2 010-11, THE APPEAL FOR THE YEAR UNDER CONSIDERATION IS ALSO ALLOWED WITH S IMILAR DIRECTION. TO BE MORE SPECIFIC THE ASSESSING OFFICER IS DIRECTED TO TAKE THE ESTIMATED PROFIT @ 8.32% AS DIRECTED BY HIM WHILE PASSING THE ASSESS MENT ORDER UNDER SECTION 143(3)/147 DATED 22/02/2016, WHICH WOULD BE SUFFICIENT TO FULFILL ITA NO. 1062 & 1063/M/18-M/S REETA JAIN 13 THE POSSIBILITY OF REVENUE LEAKAGE. IN THE RESULT T HE GROUND NO. 1 TO 3 OF THE APPEAL ARE PARTLY ALLOWED. 14. ORDER PRONOUNCED IN THE OPEN COURT ON 10/10/2018. SD/- SD/ - SHAMIM YAHYA PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 10.10.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR SMC BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI