M/s. General Mechanical Works, Baroda V. The ACIT.,Circle-2(1), Baroda

ITA 2032/AHD/2010

• Counselvise Citation: 203220514 RSA 2010
• Duration Of Justice: 3 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 24-02-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 10-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: NIKITA BRAHMBHATT A R
• Keywords: Bogus purchase; Business expenditure; Opportunity of being heard; Cost of acquisition; Onus to prove; Condonation of delay
• Section: 40A(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD , , , , BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND , SHRI T.R. MEENA, ACCOUNTANT MEMBER .. , ! ' ! ' ! ' ! ' ITA NO. 2032/AHD/2010 ASSESSMENT YEAR : 2002-03 M/S GENERAL MECHANICAL WORKS 885, GIDC MAKARPURA, BARODA V/S . ACIT, CIRCLE-2(1), BARODA PAN NO. A ACFG0841M (APPELLANT) .. (RESPONDENT) #$ % & / BY APPELLANT MISS. NIKITA BRAHMBHATT, A.R. '(#$ % & /BY RESPONDENT SHRI K. C. MATHEWS, SR. D.R. )* % /DATE OF HEARING 24.02.2014 +,- % /DATE OF PRONOUNCEMENT 14.03.2014 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THE ASSESSEE FILED APPEAL DELAYED BY 316 DAYS, FOR WHICH, HE HAS FILED THE AFFIDAVIT AND NARRATED THE REASONS FOR NOT FILI NG THE APPEAL IN TIME. FOR DELAY, THE ASSESSEE RELIED UPON THE DECISION OF HON BLE D BENCH IN CASE OF JAYVANTSINH N VAGHELA VS. ITO IN ITA NOS. 563 & 564 /AHD/2012 FOR A.Y. 2007-08 & 08-09, ORDER DATED 22.03.2013, WHEREIN AP PEAL WAS LATE BY 328 DAYS IN A.Y. 07-08 AND 158 DAYS IN A.Y. 08-09. THE ASSESSEE ALSO GAVE WRITTEN REPLY ON CONDONATION OF DELAY. IT WAS STAT ED THAT ORDER WAS MISPLACED AND IT COULD NOT REACH TO THE CONCERN PERSON OF THE COMPANY FOR WHICH HE HAD FILED THE AFFIDAVIT OF SHRI RAJESH P SHAH. HE ALSO RELIED UPON VARIOUS ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 2 DECISIONS OF VARIOUS COURTS ON THIS ISSUE. LD. SR. D.R. HAS ALSO FILED WRITTEN REPLY VIDE LETTER DATED 15.04.2013 AND VEHEMENTLY O PPOSED THE CONDONATION OF DELAY ON THE BASIS OF REASONS RECORDED IN THE AF FIDAVIT ARE CONTRARY. HE FURTHER RELIED UPON THE ORDER OF HONBLE SUPREME CO URT IN CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL VS SHANTARAM BAB URAO PATIL, 253 ITR 798, WHEREIN IT WAS HELD THAT IN EXERCISING DISCRETION U /S. 5 OF THE LIMITATION ACT, THE COURT SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINC TION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. HE FURTHER RELIED IN CASE OF JCIT VS TRACTORS & FARM EQUIPMENTS LTD., 104 ITD 149, ITAT CHENNAI (TM), WHEREIN IT WAS HELD THAT GRANTING THE INDULGENCE AND CONDONING THE DELAY IT MUST BE PROVE D BEYOND THE SHADOW OF DOUBT THAT THE APPELLANT WAS DILIGENT AND WAS NOT G UILTY OF NEGLIGENCE. AFTER CONSIDERING THE BOTH SIDES, FACTS AND CASE LAWS, WE CONDONE THE DELAY. 2. THIS IS AN APPEAL AT THE BEHEST OF ASSESSEE WHIC H HAS EMANATED FROM THE ORDER OF CIT(A)-II, BARODA, DATED 27.05.2009 FO R ASSESSMENT YEAR 2002- 03. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN TO-OPENING THE ASSESSMENT U/S 147 OF THE INC OME TAX ACT AND COMPLETING THE ASSESSMENT, COMMENCED UNDER INVALID EXERCISE OF POWER U/S. 147 OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN REOPENING THE ASSESSMENT BASED ON THE DOCUMENTS/PAPERS/AFFIDAVITS FILED BY THIRD P ARTIES NOT RELEVANT IN THE CASE OF THE APPELLANT AND WITHOUT PROVIDING COPIES OF THE SAME TO THE APPELLANT FOR GIVING NECESSARY CLARIFICATION. ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 3 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN MAKING AD DITION TO THE INCOME OF THE APPELLANT WITHOUT PROVIDING THE COPIES OF THE DOCUMENTS/PAPER/AFFIDAVITS REFERRED TO IN THE ASSES SMENT ORDER BEFORE MAKING THE ADDITION. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN DISALLOWI NG PURCHASE OF RS. 14,32,750/- ON THE GROUND THAT THE SAID PURCHASES A RE BOGUS PURCHASES DESPITE OF THE FACT THAT THE APPELLANT CONSUMED THE MATERIAL IN QUESTION. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN INITIATIN G THE PENALTY PROCEEDING U/S.271(1)(C) OF THE INCOME TAX ACT 1961. 3. THE FIRST AND SECOND GROUNDS OF APPEAL ARE AGAIN ST REOPENING THE CASE U/S. 147 & 148 WHICH HAVE NOT BEEN PRESSED BY THE A SSESSEE. THE SAME ARE DISMISSED AS NOT PRESSED. 4. GROUND NO.3 & 4 ARE AGAINST CONFIRMING THE ADDIT ION ON ACCOUNT OF BOGUS PURCHASE OF RS.14,32,750/- BY THE CIT(A). TH E A.O. OBSERVED THAT INQUIRY WAS CONDUCTED BY THE DEPARTMENT IN CASE OF M/S. PRAKASH MARBLES ENGINEERING COMPANY, DABHOI ROAD, BARODA FOR A.Y. 2 002-03. IT WAS FOUND BY THE ASSESSING OFFICER THAT BOGUS PURCHASE BY WAY OF ACCOMMODATION BILLS FOR PURCHASE OF MATERIAL WITHOUT, IN ACTUALLY, ANY MATERIAL BEING PURCHASED, WERE PROCURED FROM SHRI JABBARSINGH CHAUHAN, PROPRI ETOR OF M/S. GIRNAR SALES CORPORATION AND SHRI NAVIN RAVAL, PROPRIETOR OF M/S. SHIV METAL CORPORATION. THE SALE PROCEEDS OF SUCH ACCOMMODATI ON BILLS WERE DEPOSITED IN CURRENT ACCOUNT NUMBER 2152 AND 2144 WITH SHREE MAHALAXMI MERCANTILE CO-OPERATIVE BANK LTD., HARSH COMPLEX SULTANPURA, B ARODA BY THE ABOVE ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 4 NAMED PERSONS. THESE PERSONS VIDE LETTERS DATED 03 .03.2005 AND AFFIDAVIT DATED 09.02.2005 HAD CONFIRMED THE FRAUD OF ISSUING BOGUS BILLS TO THE PARTIES ON DEMAND ON COMMISSION BASIS AND THAT THEY WERE DO ING THE SAME IN THE NAMES OF THEIR FICTITIOUS FIRMS, M/S. GIRNAR SALES CORPORATION AND M/S. SHIV METAL CORPORATION. DURING THE COURSE OF SUCH INQUI RY, IT WAS ALSO FOUND BY THE A.O. THAT APART FROM ISSUING BOGUS BILLS TO M/S. PR AKASH MARBLES ENGINEERING CO, THE SAID PARTIES THROUGH THEIR FICTITIOUS CONCE RNS HAD ISSUED SUCH BOGUS BILLS TO VARIOUS PARTIES IN THE MARKET AND ONE OF T HEM BEING GENERAL MECHANICAL WORKS, WHO HAD SOUGHT THESE ACCOMMODATIO NS BOGUS BILLS FROM SHRI NAVIN RAVAL, CLAIMED TO BE THE PROPRIETOR OF F ICTITIOUS FIRM, M/S. GIRNAR SALES CORPORATION DURING THE ACCOUNTING PERIOD RELE VANT TO THE ASSESSMENT YEAR 2002-03, THE DETAILS OF THESE BOGUS PURCHASES ARE AS UNDER: (A) DETAILS OF PURCHASES (BOGUS) FROM GIRNAR SALES CORPORATION: SR. NO. BILL NO. DATE MATERIAL QUANTITY(KGS.) AMOUNT(RS.) 1. 160/1 18.12.2001 S.S. SHEET 1790 21480/- 2. 172/02 06.01.2002 S.S. SHEET 2290 272400/- 3. 207/02 05.02.2002 S.S. SHEET 2195 263400/- 6275 750600/- (A) DETAILS OF PURCHASES (BOGUS) FROM SHIV METAL CO RPORATION: SR. NO. BILL NO. DATE MATERIAL QUANTITY(KGS.) AMOUNT(RS.) 1. SMC/159/1 03.12.2001 M.S. PLATE 15340 252175/- 2. SMC/184/02 08.01.2002 M.S. PLATE 1660 224100/- 3. SMC/19/02 20.02.2002 M.S. PLATE 1525 205875/- 18525 682150/- TOTAL (A) + (B) = 7,50,600 + 6,82,150 = RS.14,32,75 0/- THE LD. A.O. ISSUED NOTICE U/S. 148 OF THE IT ACT O N 15.01.2007 AND ASSESSEE WAS ASKED TO FILE RETURN IN RESPONSE TO THIS NOTICE , WHICH WAS COMPLIED BY THE ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 5 ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF UNDERTAKING CONTRACT FOR MECHANICAL WORK VIZ. FABRICATION AND ERECTION O F STEEL STRUCTURES, PIPING, STOP LOG GATES, COARSE SCREENS, TRAVELLING WATER SC REENS MAINLY FOR VARIOUS THERMAL POWER PROJECTS UNDERTAKEN. THE A.O. GAVE R EASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE, WHICH WAS AFFORDED BY THE ASSESSEE. AFTER CONSIDERING THE ASSESSEES REPLY, THE A.O. HELD THA T THE PERSONS FROM WHOM PURCHASES WERE STATED TO HAVE BEEN MADE HAD DENIED THE SAME BY FILING AFFIDAVIT THAT THEY HAD ISSUED BOGUS PURCHASE BILLS TO THE PARTY IN THE NAME OF THEIR FICTITIOUS FIRM. AS PER PROVISIONS OF THE IT ACT, THE ONUS TO PROVE THE GENUINENESS OF THE CLAIM MADE BY THE ASSESSEE IN RE SPECT OF ANY EXPENDITURE IS ON THE ASSESSEE AND NOT ON THE DEPARTMENT. THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE PURCHASE MADE BY WAY O F FURNISHING CONFIRMATION FROM THE SELLER CONCERNED OR PRODUCING THE SELLER BEFORE THE UNDERSIGNED FOR TAKING NECESSARY STATEMENT. THE AM OUNT INVOLVED IN THE SAID BOGUS BILLS TRANSACTION INDULGED IN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS PER THE RECORDS WAS RS.14,32,750/- . THE ASSESSEE HAD INFLATED THE PURCHASE BY TO THAT EXTENT AND REDUCED THE TAX LIABILITY. THUS, HE MADE ADDITION OF RS.14,32,750/- IN THE INCOME OF TH E ASSESSEE. 5. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD ALSO CONFIRMED THE ADDITION BY OBSERVING AS UNDER: 2.3. I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE. THE BASIC ISSUE IS THAT THE APPELLANT CLAIMED TO HAVE MADE PURCHASES FROM PARTIES WHO STATE THAT NO SALES HAVE BEEN ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 6 MADE BY THEM. NO EVIDENCE HAS BEEN ADDUCED BY THE A PPELLANT TO SHOW THAT PURCHASES WERE INDEED MADE FROM M/S. SHIV META L CORPORATION AND M/S. GIRNAR SALES CORPORATION. THE PROP. OF M/S. SH IV METAL CORPORATION HAS SUBMITTED THAT HE HAS ONLY GIVEN ACCOMMODATION BILLS ON RECEIPT OF CROSSED BANK CHEQUES AFTER DEDUCTION OF 1% COMMISSI ON. APART FROM STATING THAT THE PAYMENTS HAVE BEEN MADE BY CHEQUES NO OTHER EVIDENCE HAS BEEN BROUGHT ON RECORD. THERE IS NO EVIDENCE TR ANSPORT EXPENSES, OCTROI EXPENSES OR OTHER SUBSTANTIATING PROOF. THE ONUS LIES SQUARELY ON THE APPELLANT TO PROVE THE GENUINENESS OF HIS PURCH ASES. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE APPELLANT HAS NOT CONSUMED MATERIAL FOR FABRICATION AND ERECTION OF STEEL STRUCTURES FOR TH ERMAL POWER PROJECTS. THE ONLY ISSUE WHICH REMAINS TO BE ESTABLISHED IS T HAT FABRICATION HAS BEEN DONE FROM GOODS EXPRESSLY PURCHASED FROM M/S. SHIV METAL CORPORATION AND M/S. GIRNAR SALES CORPORATION. SI NCE THE APPELLANT HAS FAILED TO SO THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION AND SAME IS THEREFORE CONFIRMED. 4. NOW, THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE ASSESSEE FILED THE PAPER BOOK WHICH INCLUDES COPY OF THE PURCHASE BILL S MADE FROM M/S. GIRNAR SALES CORPORATION AND M/S. SHIV METAL CORPORATION. IT WAS ARGUED THAT ASSESSEE HAS PURCHASED THE GOODS FROM THESE PARTIES AND PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE TO THEM. THESE P URCHASES WERE MADE FOR THE CONTRACT OF GMDC AND GOODS WERE DELIVERED A T GMDC, KUCHCHH ONLY THROUGH BILL NOS. 12,13 & 14. ACCORDINGLY, PAYMENT S WERE RELIVED TO THOSE PARTIES. THE LD. A.R. HAS DRAWN OUR ATTENTION ON P AGE NO.51 AND ARGUED THAT PARTNER OF THE ASSESSEE FIRM HAS FILED THE AFFIDAVI T AND THIS PURCHASE HAS INCLUDED IN THE TOTAL PURCHASES OF THE ASSESSEE FIR M. HE FURTHER DREW OUR ATTENTION ON PAGE NO.92, WHERE IDENTICAL ISSUE BY T HE HONBLE A BENCH IN CASE OF SHRI ALAP SHIRISHBHAI DERASARY VS. ACIT IN ITA NO. 1101, 1102 & ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 7 1103/AHD/2009 FOR A.Y. 2002-03, 03-04 & 04-05, ORDE R DATED 21.09.2012, CONFIRMED THE ADDITION @ 12.5% ON BOGUS PURCHASE, W HEREIN ALSO THE BOGUS PURCHASES WERE FROM M/S. SHIV METAL CORPORATION OF RS.4,10,165/-, THE SAME LOGIC MAY BE APPLIED IN CASE OF ASSESSEE. THEREFORE , SAME MAY BE ALLOWED AS BUSINESS EXPENSES. AT THE OUTSET, LD. SR. D.R. SUP PORTED THE ORDER OF THE CIT(A) AND ARGUED THAT ASSESSEES INCOME HAD BEEN I NFLATED TO THE EXTENT OF THE BOGUS PURCHASE AND RESULTANTLY, THE ASSESSEE HA D REDUCED THE TAX LIABILITY ON IT. HE RELIED UPON IN CASE OF ITO VS. SHRI GUMANMAL MISRIMAL IN ITA NOS. 2536 & 2537/AHD/2008 FOR A.Y. 2003-04 & 04-05 , WHEREIN HONBLE C BENCH HAS DECIDED THE BOGUS PURCHASE OF M/S. GIRNAR SALES CORPORATION AND M/S. SHIV METAL CORPORATION AND PROFIT @ 30% CONFIRMED B Y THE LD. CIT(A) HAD BEEN CONFIRMED BY THE BENCH. HE PRAYED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS ESTABLISHED FACT THAT THESE ARE THE BOGUS PURCHASES TO THE EXTENT OF RS.14,32,750/-. THE CASE LAW REFERRED BY THE AS SESSEE IN CASE OF SHRI ALAP SHIRISHBHAI DERASARY VS. ACIT (SUPRA) AND STATED TH AT WHICH WAS ON THE BASIS OF M/S. SANKET STEEL TRADERS, VADODARA VS. ITO, WAR D -5(1), IN ITA NOS. 2801 & 2937/AHD/2008, ORDER DATED 20.05.2011 AFTER CONSI DERING THE DECISION OF M/S. VIJAY PROTEINS LTD., WHEREIN NET PROFIT WAS DE CIDED @ 25% AND IN CASE OF SUN STEEL NET PROFIT DECIDED @ 12.5%. THE CASE LAW S CITED BY THE REVENUE ARE SQUARELY APPLICABLE AS QUANTUM BOGUS PURCHASE B ILLS RS.6,21,400/- FROM M/S. GIRNAR SALES CORPORATION FOR A.Y. 03-04 AND RS .18,69,658/- IN A.Y. 04- 05, WHEREIN NET PROFIT DECIDED @ 30% ON BOGUS PURCH ASE BY THE CO-ORDINATE ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 8 BENCH. OUR DECISION GETS SUPPORT FROM THE ORDER OF ITAT C BENCH IN THE CASE OF ITO VS. SHRI GUMANMAL MISRIMAL IN ITA NOS. 2536, 25 37, 2575 & 2576/AHD/2008, ORDER DATED 13.01.2011, THE RELEVANT PORTION IS REPRODUCED AS UNDER: 7.1 THE LD. AR SUBMITTED THAT 30% OF THE DISALLOW ANCE MADE BY THE LD. CIT(A), FOLLOWING THE VIEW TAKEN IN THE AFO RESAID SAID DECISION OF THE TRIBUNAL, IS EXCESSIVE LOOKING TO THE NATURE AND BUSINESS ACTIVITIES OF THE ASSESSEE AND IN THIS CONNECTION, THE LD. AR REFERRED TO THE DECISION IN THE CASE OF SHREE RAJ INDUSTRIES (SUPRA) , WHERE IN DISALLOWANCE WAS RESTRICTED TO 15% OF THE AMOUNT OF TOTAL PURCHASES DISALLOWED BY THE AO . WE FIND THAT IN THE SAID CAS E THE ASSESSEE WAS DEALING IN IRON AND STEEL AND DECISION RELATES TO AY 1991-92 WHEN THE COST OF INPUTS AND OTHER EXPENSES AS ALSO TAXES AND DUTIES AND CONSEQUENTLY SELLING PRICES MAY BE DIFFERENT VI S--VIS IN THE CASE BEFORE US. IN ANY CASE, COMPARATIVE COST OF INPUTS, EXPENSES OR EVEN SELLING PRICES HAVE NOT BEEN PLACED BEFORE US. THER EFORE, FINDINGS OF THE ITAT IN THE SAID DECISION CAN NOT BE FOLLOWED S TRAIGHTWAY. IN THE INSTANT CASE, INDISPUTABLY, THE ASSESSEE FAILED TO ESTABLISH GENUINENESS OF PURCHASES FROM THE AFORESAID PARTIES REFERRED BY THE AO VIZ. M/S GIRNAR SALES CORPORATION AND M/S SHIV M ETAL CORPORATION/M/S HINDUSTAN METAL CORPORATION AND BOT H THE PARTIES ADMITTED THAT THEY DID NOT SELL ANY MATERIAL TO THE ASSESSEE AND INSTEAD ISSUED ACCOMMODATION BILLS. IN THE FACE OF THIS ADMISSION, THE ASSESSEE MISERABLY FAILED TO ESTABLISH THE GENU INENESS OF PURCHASES. THE LD. CIT(A) FOUND THAT THE ASSESSEE H AD FURNISHED QUANTITATIVE TALLY OF MATERIALS PURCHASED AND MATER IALS SOLD WHILE THE PAYMENTS HAD BEEN MADE BY CHEQUE FROM EXPLAINED FUN DS OF THE BUSINESS. THESE FINDINGS HAVE NOT BEEN DISPUTED BEF ORE US BY THE REVENUE. THE LD. CIT(A) FURTHER OBSERVED THAT THE M ATERIALS WERE ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 9 PURCHASED FROM THE OPEN MARKET INCURRING CASH PAYME NT AND BILLS HAVE BEEN TAKEN FROM THE AFORESAID TWO PARTIES. IN THE PROCESS, THE ASSESSEE VIOLATED THE PROVISIONS OF SEC. 40A(3) WHI CH PROHIBITS CASH PURCHASES AND THERE COULD BE ACCOMPANYING GAIN AS T HE PURCHASES WERE MADE FROM UNREGISTERED PARTIES WHO DO NOT PAY SALES TAX AND OTHER STATUTORY DUTIES . ACCORDINGLY, THE LD. CIT(A ) WHILE REFERRING TO A NUMBER OF DECISIONS OF THE ITAT RELIED UPON ON BEHA LF OF THE ASSESSEE CONCLUDED THAT 30% OF THE PURCHASE COST WI LL BE A REASONABLE AMOUNT IN THIS CASE TO COVER THE GAIN OF THE ASSESSEE. NOT AN IOTA OF EVIDENCE HAS BEEN PLACED BEFORE US E ITHER BY THE REVENUE OR THE ASSESSEE IN ORDER TO ENABLE US TO TA KE A DIFFERENT VIEW IN THE MATTER. WE ARE OF THE OPINION THAT THE PERCENTAGE ESTIMATED IN A NUMBER OF DECISIONS BY THE ITAT IS N EITHER STATIC NOR A MATHEMATICAL FORMULA CAN BE APPLIED IN ALL CASES. T RIBUNAL IN VARIOUS CASES, HAS OBSERVED THAT ESTIMATION OF POSSIBLE BEN EFITS DERIVED BY THE ASSESSEE IS TO BE TAKEN IN THE FACTS OF EACH CA SE. THE UNDERLINED PROPOSITION LAID DOWN IS TO OBJECTIVELY ESTIMATE TH E POSSIBLE BENEFITS, LOOKING AT ALL THE ASPECTS OF MATTER AND ATTENDING CIRCUMSTANCES. THIS TRIBUNAL IN VIJAY PROTEINS VS. ACIT (SUPRA) HE LD THAT IT WAS INCUMBENT UPON THE ASSESSEE TO PROVE THAT THE SUPPL IERS WERE GENUINE SUPPLIER OF THE GOODS AND THEY REALLY SUPPL IED GOODS TO THE ASSESSEE AND THE ASSESSEE REALLY MADE PAYMENTS BY C HEQUE TO THOSE PARTIES AND NONE-ELSE. SUCH A BURDEN HAD TO B E DISCHARGED BY THE ASSESSEE WITH VERY STRONG AND CONNECTED EVIDENC E IN VIEW OF THE BLATANT DENIAL BY THE AFORESAID PARTIES WHILE NO SE RIOUS EFFORTS APPEAR TO HAVE BEEN MADE BY THE ASSESSEE TO DISCHAR GE SUCH BURDEN OF PROVING THE GENUINENESS OF THE TRANSACTIO NS WITH THE SAID PARTIES. AS HELD IN THE CASE OF VIJAY PROTEINS(SUPR A), IT WOULD BE FIT CASE FOR REJECTION OF THE BOOKS. CONSIDERING THE FA CTS OF THE PRESENT CASE, NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE TO ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 10 SHOW THAT THE APPLICATION OF RATE BY THE LD. CIT(A) IS EXCESSIVE. AS REGARDS ESTIMATION OF PROFITS, NO DOUBT THE AO/CIT( A) SHOULD TRY TO MAKE AN HONEST AND FAIR ESTIMATE OF THE INCOME EVEN IN A BEST JUDGMENT ASSESSMENT AND SHOULD NOT ACT TOTALLY ARBI TRARILY, BUT THERE IS NECESSARILY SOME AMOUNT OF GUESS WORK INVOLVED I N A BEST JUDGMENT ASSESSMENT, AND IT IS THE ASSESSEE HIMSELF WHO IS TO BLAME AS HE DID NOT SUBMIT PROPER ACCOUNTS AND DETA ILS. [KACHWALA GEMS VS JCIT, 288 ITR 10 (2007)(SC) ]. SINCE THE AS SESSEE MISERABLY FAILED TO ESTABLISH GENUINENESS OF THE PU RCHASES FROM THE AFORESAID TWO PARTIES WITH ANY COGENT EVIDENCE BEFO RE THE AO OR THE LD. CIT(A) NOR EVEN ANY SUCH MATERIAL HAS BEEN PLAC ED BEFORE US, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LE ARNED CIT(A) WHILE UPHOLDING REJECTION OF BOOK RESULTS AND SUSTAINING THE ADDITION ON THE BASIS OF VIEW TAKEN BY THE ITAT IN A NUMBER OF DECI SIONS REFERRED TO ABOVE . IN VIEW OF THE FOREGOING, WE DO NOT FIND AN Y MERIT IN THE COMMON GROUND NOS.1 TO 3 IN THE APPEALS OF THE REVE NUE AND GROUND NOS.2 TO 4 IN THE APPEALS OF THE ASSESSEE. T HEREFORE, THESE GROUNDS ARE DISMISSED. SINCE IN RESPECT OF BOTH THE SAID TWO PARTIES, THE CO-ORDINATE BENCH HAS TAKEN A VIEW THEREFORE THE CASE IS SQUARELY APPLICABLE ON THE PRESENT CASE ALSO. THE APPELLANT HAD NOT PROVED THE PURCHASE GENUINE. THE SUPPLIER HAD ALREADY GIVEN AFFIDAVITS THAT THEY HAVE GIVEN BOGUS BILLS TO THE ASSESSEE. THEREFORE, BURDEN IS HEAVILY ON THE ASSESSEE TO PRO VE THAT THESE TRANSACTIONS ARE GENUINE, WHICH HAS NOT BEEN DISCHARGED BY IT. CONSIDERING THE FACTS OF THE PRESENT CASE, THE NET PROFIT @ 30% ON BOGUS PUR CHASE IS REASONABLE. THEREFORE, WE ALLOW THE ASSESSEES APPEAL PARTLY. THE A.O. IS DIRECTED TO ITA NO. 2032/AHD/2010, M/S. GENERAL MECHANICAL WORKS VS. ACIT, A.Y. 02-03 PAGE 11 CALCULATE 30% NET PROFIT ON BOGUS PURCHASE AND COMP UTE THE INCOME ACCORDINGLY. 6. GROUND NO.5 IS CONSEQUENTIAL OF THE ABOVE FINDIN G. 7. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 14/03/2014 SD/- SD/- ( MUKUL KR. SHRAWAT) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA . . . . % %% % '/ '/ '/ '/ 0/- 0/- 0/- 0/- / COPY OF ORDER FORWARDED TO:- 1. #$ / APPELLANT 2. '(#$ / RESPONDENT 3. 44 5 / CONCERNED CIT 4. 5- / CIT (A) 5. /9: ') , , / DR, ITAT, AHMEDABAD 6. :< => / GUARD FILE. BY ORDER/ . , ?/ 4A , '