ITO WD 25(1)(3), MUMBAI V. SUMAN C. SHAH, MUMBAI

ITA 2510/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9561 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Keywords: Bogus purchase; Accommodation entries
• Section: 40A(3); 143(3); 133(6); 147

Judgement Text

P A G E | 1 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI BEFORE SHRI RAJENDRA , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO.2510/MUM/2017 ( / ASSESSMENT YEAR: 2010 - 11) ITO WARD 25(1)(3) C - 10,R. NO. 404, 4 TH FLOOR, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA, MUMBAI - 400051 / VS. SHRI SUMAN C. SHAH 117/B HIND SAURASHTRA IND. ESTATE, MAROL NAKA, ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI - 400059 ./ ./ PAN/GIR NO. ALJPS3469F ( / REVENUE ) : ( / ASSESSEE ) / REVENUE BY : SHRI M.V. RAJGURU, SR. D.R / ASSESSEE BY : NONE / DATE OF HEARING : 04/09/2017 / DATE OF PRONOUNCEMENT : 13 /09/2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 37, MUMBAI, DATED 05.01.2017, WHICH IN ITSELF ARISES FROM THE ASSESSMENT ORDER PASSED BY THE A.O U/S. 143(3) P A G E | 2 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH R.W.S.147 OF THE INCOME TAX ACT, 1961, (FOR SHORT ACT), DATED 04.01.2016. THE REVENUE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED THE FOLLOWING G ROUNDS OF APPEAL BEFORE US: - 1. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.39,70,018/ - ON ACCOUNT OF BOGUS PURCHASES. 2. THE LD. CIT(A) HAS ERRED, IN NOT CONSIDERING THAT THE ADDITION WAS MADE ON THE BASIS OF INFORMATION RECEIVED FROM DIT(INV.) AND SALES TAX DEPARTMENT, MAHARASHTRA, WITH REGARD TO BOGUS PURCHASES MADE BY THE ASSESSEE FROM DEALERS WITHOUT ACTUAL SUPPLY OF GOO DS. 3. THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE HAWALA DEALERS HAVE ADMITTED ON OATH BEFORE THE SALES TAX AUTHORITIES THAT THEY HAVE NOT SOLD ANY MATERIAL TO ANYBODY. 4. THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE PURCHASE TRANSACTIONS, DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 5. THE LD. CIT(A) HAS ERRED IN ESTIMATING THE PROFIT AT 12.5% ON THE TOTAL ALLEGED BOGUS PURCHASES FROM HAWALA DEALERS. 6. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THAT PURCHASES WERE MADE FROM SOME OTHER PARTIES WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS AND ONLY ACCOMMODATION BILLS WERE OBTAINED FROM HAWALA PARTIES AND THERE BY ATTRACTING PROVISIONS OF SECTION 40A( 3). 7. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT APPLICABILITY OF PROVISIONS OF 40A(3) ATTRACTS 100% BOGUS PURCHASES TO BE HELD AS PROFIT. 8. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 9. THE APPELLANT CRAVES LEAVE TO AMEND OR TO ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING PLASTICS AND PVC ITEMS HAD FILED HIS RETURN OF INCOME FOR A.Y. 2010 - 11 ON 25.09.2010, DECLARING TOTAL INCOME AT RS.9,64,270/ - , WHICH WAS PROCESSED AS SUCH U/S 143(1) OF THE ACT . THE A.O ON THE BASIS OF THE INFORMATION RECEIVED FROM THE OFFICE OF THE DGIT(INV.), MUMBAI , THAT AS PER THE INFORMATION FORWARDED BY THE SALES TAX DEPARTMENT, MUMBAI , GOVERNMENT OF P A G E | 3 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH MAHARASHTRA, IT WAS GATHERED THAT THE ASSESSEE HAD OBTAINED BILLS OF BOGUS PURCHASES FROM THE CERTAIN PARTIES WHICH WERE ENGAGED IN THE BUSINESS OF PROVIDING BOGUS BILLS AFTER CHARGING SMALL AMOUNT OF CONSIDERATION, AS UNDER: - SR. NO. TIN NAME OF THE PARTY AMOUNT (RS.) 1. 27430617262V PIONEER TRADING CORPORATION 526,240 2. 27220658554V K.C. ENTERPRISES 527,280 3. 27980667157V R.K. ENTERPRISES 326,560 4. 27400628967V GLOBAL TRADE IMPEX 261,625 5. 27760618778V SHREE ENTERPRISES 436,800 6. 27270692331V AMEE ENTERPRISES 294,840 7. 27740670878V NIRMAL TRADING CO. 646,198 8. 27360671572V RAJSHREE ENTERPRISES 1,517,620 TOTAL 45,37,163 THE A.O ON THE BASIS OF THE AFORESAID INFORMATION REOPENED THE CASE OF THE ASSESSEE U/S 147 OF THE ACT . 3. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O IN ORDER TO VERIFY THE GENUINENESS AND VERACITY OF THE AFORESAID PURCHASE TRANSACTIONS ISSUE D N OTICES U/S 133(6) TO THE AFOREMENTIONED PARTIES. HOWEVER , EXCEPT FOR ONE PARTY, VIZ. M/S. K.C. ENTERPRISES WHICH REVERTED BACK AND IN ITS REPLY CLAIMED THAT IT HAD NO KNOWLEDGE OF ANY SALES AND PURCHASE OF GOODS AND/OR FINAL TRANSACTIO N WITH THE ASSESSEE, THE NOTICES IN THE CASE OF ALL THE REMAINING 7 PARTIES WERE RECEIVED BACK UNSERVED FROM THE POSTAL AUTHORITIES , WITH THE REMARKS LEFT OR NOT KNOWN. THE A.O IN THE BACKDROP OF THE AFORESAID FACTUAL POSITION THEREFORE CALLED UPON THE ASSESSEE TO SUBSTANTIATE THE GENUINENESS OF THE ABOVEMENTION E D PURCHASE TRANSACTIONS ON THE BASIS OF DOCUMENTARY EVIDENCE, VIZ . (I) DETAIL S OF GOODS PURCHASE D FROM THE AFOREMENTIONED PARTIES; (II) COPIES OF THE PURCHASE BILLS ALONG WITH P A G E | 4 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH DELI VERY CHALLANS SUBSTANTIAT ING THE RECEIPT OF MATERIAL; (III) COPY OF INVOICES, OCTROI AND TRANSPORTATION BILLS IN RESPECT OF GOODS PURCHASED FROM THE AFORESAID PARTIES; (IV) COPY OF LEDGER ACCOUNT S OF THE PARTIES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE; (V) STOCK REGIS TER TO SHOW THE MOVEMENT OF THE GOODS PURCHASED FROM THE AFOREMENTIONED PARTIES; (VI) DETAILS OF THE PARTIES TO WHOM THE GOODS UNDER CONSIDERATION WERE SOLD , ALONG WITH THE COPY OF SALE BILLS, DELIVERY CHALLANS, INVOICES, TRANSPORTATION BILLS ETC. ; (VII) C OPES OF THE BANK ACCOUNTS OF THE AFORESAID PARTIES IN WHICH THE PAYMENTS STOOD CREDITED; (VIII) COPY OF THE BANK ACCOUNT/STATEMENT OF THE ASSESSEE FROM WHERE THE PAYMENTS WERE MADE TO THE ABOVEMENTIONED PARTIES; AND (IX) COPY OF THE BANK ACCOUNTS IN WHICH THE SALE PROCEEDS OF THE AFORESAID GOODS STOOD C REDITED. THE ASSESSEE WAS FURTHER DIRECTED BY THE A.O TO PRODUCE THE ABOVEMENTIONED PARTIES ALONG WITH THEIR BOOKS OF ACCOUNTS , SO THAT THE VERACITY OF THE PURCHASE TRANSACTIONS COULD BE ESTABLISHED BEYOND ANY SCOPE OF DOUBT. THE ASSESSEE IN COMPLIANCE TO THE AFORESAID DIRECTIONS OF THE A.O SUBMITTED THAT AT THE RELEVANT POINT OF TIME WHEN THE PURCHASES WERE MADE FROM THE ABOVEMENT IONED PARTIES, THE L A TTER WERE DULY REGISTERED UNDER THE MVAT, 2002 AND THE CENTRAL SALES TAX ACT, 1956. THE ASSESSEE IN HIS ATTEMPT TO SUBSTANTIATE THE GENUINENESS OF THE PURCHASES TRANSACTIONS PRODUCE D BEFORE THE A.O THE INVOICES AND THE DELIVERY CHALLAN S, AS WELL AS STRESSED ON THE FACT THAT THE PAYMENT OF THE PURCHASE CONSIDERATION WAS MADE TO THE AFOREMENTIONED PARTIES VIDE ACCOUNT PAYEE CHEQUES. THE ASSESSEE FURTHER SUBMITTED THAT AS THE SUPPLIERS WERE WITHIN THE LIMIT S OF MUMBAI, THEREFORE, NO OCTROI WAS PAID , THUS NO OCTROI RECEIPT S AS CALLED FOR BY THE A.O COULD BE PRODUCED. THAT AS REGARDS THE MODE OF TRANSPORT OF THE AFORESAID GOODS , IT WAS CLAIMED BY THE ASSESSEE THAT THE GOODS WERE DELIVERED BY THE SUPPLIERS THROUGH PRIVATE TEMPO S AND THE TRANSP ORT RECEIPTS IN SUPPORT THEREOF WERE NOT AVAILABLE. HOWEVER, P A G E | 5 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH INTERESTINGLY THE ASSESSEE SUBMITTED BEFORE THE A.O THAT IN ORDER TO PURCHASE PEACE OF MIND AND TO AVOID PROLONGED LITIGATION , HE WAS READY TO PAY SOME TAX , SO THAT THE MATTER MAY BE CLOSED. 4. THE A.O AFTER DELIBERATING ON THE CONTENTION S OF THE ASSESSEE IN THE BACKDROP OF THE FACTS OF THE CASE WAS HOWEVER NOT PERSUADED TO ACCEPT THE SAME. THE A.O AFTER PERUSING THE EVIDENCES WHICH HAD BEEN PLACED ON RECORD BY THE ASSESSEE , THEREIN CONCLUDED THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE PURCHASE TRANSACTIONS CLAIMED TO HAVE BEEN MADE FROM THE AFORE MENTIONED PARTIES. THE A.O IN THE BACKDROP OF THE INFORMATION WHICH WAS RECEIVED FROM THE SALES TAX DEPARTMENT, GO VERNMENT OF MAHARASHTRA, THUS KEEPING IN VIEW THE FAILURE ON THE PART OF THE ASSESSEE TO SUBSTANTIATE THE GENUINENESS OF THE PURCHASE TRANSACTIONS, THEREIN CONCLUDED THAT THE DETAILS FURNISHED BY THE ASSESSEE WERE COUNTERFEIT/AND WAS NOTHING BETTER THAN A COLOURABLE DEVISE. THE A.O CONCLUDED THAT THE ASSESSEE HAD AS A MATTER OF FACT MERELY OBTAINED ACCOMMODATION ENTRIES FROM THE AFORE MENTIONED CONCERN S, WHICH WERE ONLY PAPER CONCERN S AND DID NOT EXIST IN REALITY. THUS , THE A.O AFTER GIVING A THOUGHTFUL CONS IDERATION TO THE AFORESAID FACTS OBSERVED THAT THE ASSESSEE HAD INFLATED THE PURCHASES BY TAKING BOGUS BILLS, AND HAD NOT MADE ANY GENUINE PURCHASES FROM THE AFOREMENTIONED PARTIES. HOWEVER, T HE A.O BEIN G OF THE VIEW THAT AS THE ASSESSEE WAS A MANUFACTURER OF PLASTIC AND PVC ITEMS, THEREFORE, IN THE ABSENCE OF PURCHASE OF THE GOODS UNDER CONSIDERATION, THE CORRESPONDING SALES WOULD NOT HAVE BEEN POSSIBLE. THE A.O THUS IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS WAS OF THE VIEW THAT THE RECEIPT OF MATERIAL /GOODS BY THE ASSESSEE COULD NOT BE DOUBTED. THE A.O D RIVEN BY HIS AFORESAID CONVICTION, THUS CONCLUDED THAT THE ASSESSEE HAD AS A MATTER OF FACT PURCHASE D THE MATERIAL /GOODS UNDER CONSIDERATION , THOUGH NOT FROM THE P A G E | 6 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH AFOREMENTIONED PARTIES, BUT FROM CERTAIN UNKNOWN PARTIES WHICH WERE ONLY TO THE KNOWLEDGE OF THE ASSESSEE. THE A.O THUS CONCLUDED THAT AS THE AFOREMENTIONED PARTIES WERE NOT FOUND TO BE IN EXISTENCE, THEREFORE, IT COULD SAFELY BE HELD THAT THE ASSESSEE HAD MERELY PROCURED THE ACCOMMODATION BILL S FROM THE SAID PARTIES, WHILE FOR THE ACTUAL PURCHASES OF THE GOODS/MATERIAL WAS MADE BY HIM FROM THE OPEN/GREY MARKET. T HE A.O THUS HELD THAT AS THE ASSESSEE HAD NOT PURCHASE D THE MATERIAL FROM THE AFOREMENTIONED PARTIES MENTIONED IN THE SALE BILLS , AND HAD ALSO FAILED TO PROVE THAT THE MATERIAL /GOODS MENTIONED IN THE BILLS WAS USED IN HIS BUSINESS ACTIVITY , THEREFORE, IT COULD SAFELY CONCLUDED THAT THE SAID PURCHASES WERE DE BITED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS , ONLY WITH THE INTENTION OF RE DUC ING HIS TAXABLE PROFITS. THE A.O IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS THUS H E LD THE ENTIRE PURCHASES MADE BY THE ASSESSEE FROM THE AFOREMENTIONED PARTIES , AS UNPROVED, AND MADE AN ADDITION OF THE AGGREGATE VALUE OF SUCH PURCHASES OF RS.45,37,16 3/ - IN THE HANDS OF THE ASSESSEE. 5. THE ASSESSEE BEING AGGRIEVE D WITH THE ORDER PASSED BY THE A.O , THEREIN CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING ON THE CONTENTION S OF THE ASSESSEE IN THE BACKDROP OF THE FACTS OF THE CASE , THEREIN CONCLUDED THAT IT REMAIN ED AS A MATTER OF FACT THAT THE A.O HAD NOT BROUGHT ANY MATERIAL ON RECORD WHICH COULD GO TO SHOW THAT THERE WAS ANY SUPPRESSION OF SALES BY THE ASSESSEE. THE CIT(A) FURTHER OBSERVED THAT NOW WHEN THE ASSESSEE HAD MADE THE PAYMENTS TOWARDS THE PURCHASE CONSIDERATION THROUGH CHEQUE S , THEREFORE, IT WAS INCUMBENT ON THE PART OF THE A.O TO HAVE VERIF IED THE PAYMENT DETAILS FROM THE BANK OF THE ASSESSEE , AS WELL AS FROM THE BANK OF THE SUPPLIERS , IN ORDER TO VERIFY AS TO WHETHER THERE WAS ANY IMMEDIATE CASH WITHDRAWAL FROM THEIR ACCOUNT, OR NOT. THE CIT(A) P A G E | 7 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH THUS BEING OF THE CONSIDERED VIEW THAT NO DETAILED INVESTIGATION HAD BEEN CARRIED OUT BY THE A.O, THEREFORE , IT COULD SAFELY BE CONCLUDED THAT THERE WAS NO EVIDENCE WHICH COULD SHOW THAT THE ASSESSEE HAD RECEIVED THE AMOUNT BACK FROM THE AFOREMENTIONED SUPPLIER PARTIES . THE CIT(A) IN THE BACKDROP OF THE AFORESAID FACTS , THUS CONCLUDED THAT AS IT WAS THE BASIC RULE OF AC COUNTANCY AS WELL OF TAX LAWS THAT PROFITS FROM BUSINESS CANNOT BE ASCERTAINED WITHOUT DEDUCTING COST OF PURCHASE FROM THE SALES, THEREFORE, THE ADDITION IN THE HANDS OF THE ASSESSEE WAS LIABLE TO BE RESTRICTED ONLY UP TO THE AMOUNT OF THE PROFIT MARGIN WHICH WAS INVOLVED IN MAKING THE PURCHASES OF THE GOODS UNDER CONSIDERATION FROM THE OPEN/GREY MARKET. THE CIT(A) THUS ON THE BASIS OF HIS AFORESAID OBSERVATIONS RESTRICTED THE ADDITION IN THE HANDS OF THE ASSESSEE TO 12.5% OF THE AGGREGATE VALUE OF THE PU RCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES . THE CIT(A) THUS ON THE BASIS OF HIS AFORESAID OBSERVATIONS RESTRICTED THE ADDITION IN THE HANDS OF THE ASSESSEE AT RS.5,67,145/ - ( I.E 12.5% OF RS.4,57,37,163/ - ). 6. THE REV ENUE BEING AGGRIEVE D WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THAT AS THE ASSESSEE RESPONDENT DESPITE BEING PUT TO NOTICE OF THE DATE OF FIXATION OF THE APPEAL HAD FAILED TO PUT UP AN APPEARANCE ON THE STIPULATED DATE, NOR F ILED ANY APPLICATION SEEKING ADJOURNMENT , THEREFORE, BEING LEFT WITH NO OTHER ALTERNATIVE , WE PROCEED WITH AND AS PER RULE 25 OF THE APPELLATE TRIBUNAL RULE 1963, DISPOSE OF THE PRESENT APPEAL AFTER HEARING THE APPELLANT DEPARTMENT . THE LD. DEPARTMENTAL RE PRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER OF THE A.O AND SUBMITTED THAT IN THE TOTALITY OF THE FACTS INVOLVED IN THE CASE OF THE PRESENT ASSESSEE , THE DISALLOW ANCE OF THE ENTIRE PURCHASES OF RS. 45,37,163/ - WAS RIGHTLY MADE BY THE A.O . IT WAS SUBMITTED BY THE LD. D.R THAT THE CIT(A) P A G E | 8 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH FAILING TO APPRECIATE THE FACTS OF THE CASE IN THE RIGHT PERSPECTIVE , HAD THUS ERRED IN RESTRICTING THE ADDITION TO 12.5% OF THE AGGREGATE VALUE OF THE PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FR OM THE AFOREMENTIONED PARTIES. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE , PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MAT E RIAL AVAILABLE ON RECORD. WE HAVE GIVEN A THOUGHTFUL CONSIDE R ATION TO THE FACTS OF THE CASE AND ARE OF THE CONSID ERED VIEW THAT THERE CAN BE NO SECOND OPINION ON THE FACT THAT THE ASSESSEE HAD NOT CARRIED OUT ANY GENUINE PURCHASE TRANSACTIONS WITH THE AFOREMENTIONED PARTIES . WE FIND THAT NOT ONLY THE AFOREMENTIONED PARTIES HAD BEEN CATEGORIZED BY THE SALES TAX DEPART MENT, GOVERNMENT OF MAHARASHTRA AS ACCOMMODATION ENTRY PROVIDER S , BUT INDEPENDENT OF THAT , WE FIND THAT THE ASSESSEE HAD ABSOLUTELY FAILED TO SUBSTANTIATE THE GENUINENESS AND VERACITY OF THE PURCHASES CLAIMED BY IT TO HAVE BEEN MADE FROM THE AFOREMENTIONE D PARTIES. WE ARE OF THE CONSIDERED VIEW THAT IT REMAINS AS A MATTER OF FACT BORNE FROM RECORD THAT THE GENUINENESS OF THE SALES HAD NOT BEEN DOUBTED BY THE A.O , NOR IS IT THE CASE OF THE DEPARTMENT THAT THE ASSESSEE HAD ALSO SUPPRESSED THE CORRESPONDING SALES. WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE SALES OF THE ASSESSEE HAD NOT BEEN DOUBTED BY THE A.O, THEREFORE, IT IS BEYOND OUR COMPREHENSION AS TO HOW THE ENTIRE AMOUNT OF THE PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMEN TIONED PARTIES COULD BE ADDED TO HIS INCOME. WE ARE UNABLE TO PERSUADE OURSELVES TO BE IN AGREEMENT WITH THE VIEW TAKEN BY THE A.O , AND ARE OF THE CONSIDERED VIEW THAT THE CIT(A) AFTER DULY APPRECIATING THE FACTS OF THE CASE HAD RIGHTLY CONCLUDED THAT NOW WHEN THE SALE OF THE GOODS UNDER CONSIDERATION HAD DULY BEEN ACCOUNTED FOR BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS, THEREFORE, THE ADDITION IN HIS HANDS WAS LIABLE TO BE RESTRICTED ONLY TO P A G E | 9 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH THE EXTENT OF THE PROFIT ELEMENT EMERGING FROM THE PURCHASE OF GOO DS UNDER CONSIDERATION BY THE ASSESSEE FROM THE OPEN/GREY MARKET. WE ARE FURTHER OF THE CONSIDERED VIEW THAT THE CIT(A) RELYING ON THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. SIMIT P. SHETH (2013) 356 ITR 451(GUJ), HAD FAIRLY ESTIMAT ED THE PROFIT MARGIN IN THE HANDS OF THE ASSESSEE AT 12.5% OF THE AGGREGATE VALUE OF THE PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. WE FIND THAT THE CIT(A) HAD BY WAY OF A VERY WELL REASONED ORDER RESTRICTED THE ADDITION IN THE HANDS OF THE ASSESSEE TO THE AMOUNT OF PROFIT MARGIN INVOLVED IN MAKING THE PURCHASES FROM THE OPEN/GREY MARKET . WE THUS FINDING NO REASON TO TAKE A DIFFERENT VIEW , THUS UPHOLD THE ORDER OF T HE CIT(A) . 8. THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 .09.2017 SD/ - SD/ - RAJENDRA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 13 .09.2017 PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 10 ITA NO. 2510/MUM/2017 ITO VS. SHRI SUMAN N. SHAH