PRAKASH METAL, MUMBAI V. ITO 20(2)(1), MUMBAI

ITA 2544/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3850 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJIV
• Keywords: Reopening of assessment; Bogus purchase; Depreciation; Corroborative evidences; Accommodation entries
• Section: 43B; 143(3); 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) M/S. PRAKASH METALS, 12, SHANTI SADAN, 3 RD FLOOR, 45 TELLE PARK ROAD, ANDHERI (E), MUMBAI 400 069 PAN: AAAFP 4656K ... APPELLANT VS. INCOME TAX OFFICER-20(2)(1), MUMBAI. .... RESPOND ENT ITA NO. 2932/MUM/2014 (ASSESSMENT YEAR : 2006-07) INCOME TAX OFFICER-20(2)(1), MUMBAI. .... APPEL LANT VS. M/S. PRAKASH METALS, 12, SHANTI SADAN, 3 RD FLOOR, 45 TELLE PARK ROAD, ANDHERI (E), MUMBAI 400 069 PAN: AAAFP 4656K ... APPELLANT ASSESSEE BY : SHRI HAR IDAS BHAT REVENUE BY : SHRI RA JIV PANT DATE OF HEARING : 01/02/2016 DATE OF PRONOUNCEMENT : 17/02/2016 2 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) ORDER PER JASON P. BOAZ, A.M: THESE ARE CROSS APPEALS BY THE ASSESSEE AND REVENU E DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-32, MUMBAI DA TED 14/02/2014 FOR ASSESSMENT YEAR 2006-07. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER:- 2.1 THE ASSESSEE FIRM, ENGAGED IN THE BUSINESS AS M ANUFACTURES, TRADERS OF CONDUCTORS AND FERROUS AND NON-FERROUS M ETALS, FILED ITS RETURN FOR ASSESSMENT YEAR 2006-07 ON 31/10/2006 DECLARING INCOME OF RS.3,78,810/- THE RETURN WAS PROCESSED UNDER S ECTION 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2.2 A SURVEY UNDER SECTION 133A OF THE ACT WAS COND UCTED IN THIS CASE BY THE ADIT (INV), UNIT IV(I), MUMBAI ON 12/12 /2007 ON THE BASIS OF INFORMATION/VERIFICATION OF BANK DATA UNDER THE B ANKING CASH TRANSACTION ACT THAT M/S. SHRADDHA SABURI MERCHANTS LTD. AND M/S. SAI KRIPA METALLIC TRADECOM LTD.AND OTHER CONCERN PROMO TED BY SHRI PRAVIN AGARWAL HAD INDULGED IN SUSPICIOUS TRANSACTIONS BUT ADMITTED THAT NO ACTUAL BUSINESS OF SALE AND PURCHASE WAS CARRIED OU T BY THEM AND THAT THESE TRANSACTIONS WERE ALL ACCOMMODATION ENTRIES I N RESPECT OF WHICH THE ASSESSEE AND OTHERS WERE BENEFICIARIES IN THIS SURVEY IT WAS FOUND THAT IN THE PERIOD RELEVANT TO ASSESSMENT YEAR 2007 -08, THE ASSESSEE HAD PURCHASED MATERIALS WORTH RS. 24,76,870/- FROM M/S. SHRADDHA SABURI MERCHANTS LTD. AND RS.20,27,075/- FROM M/S. SAI KRIPA METALLIC TRADECOM LTD., FOR WHICH PAYMENTS MADE BY THE ASSES SEE WERE CREDITED IN THE AFORESAID TWO PARTIES BANK ACCOUNTS AND THE SAME WAS 3 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) WITHDRAWN IN CASH ON THE VERY NEXT DATES AFTER ITS DEPOSITS; THE ASSESSEE BEING THE MAIN BENEFICIARY OF THESE ACTIVI TIES. THE SURVEY ACTION REVEALED THAT THE ASSESSEE HAD TAKEN ACCOMMO DATION BILLS SHOWING BOGUS PURCHASE DURING THE PERIOD RELEVANT T O ASSESSMENT YEAR 2006-07 AND 2007-08 FROM M/S. SHRADDHA SABURI MERCH ANTS LTD., AND M/S. SAI KRIPA METALLIC TRADECOM LTD. THE ABOVE MOD US OPERANDI AND THE FACT THAT THE ASSESSEE WAS A BENEFICIARY OF SUC H ACTIVITIES WAS CONFIRMED BY SHRI PRAVIN T. AGARWAL IN A STATEMENT FILED BEFORE ADIT (INV), UNIT IV(I), MUMBAI ON 2/11/2007. THE ADIT ( INV) ALSO REPORTEDLY INFORMED THE ASSESSING OFFICER THAT THE PARTNER OF THE ASSESSEE FIRM SHRI PRAKASH J. SHAH WAS AFFORDED AN OPPORTUNITY TO CROS S-EXAMINE SHRI PRAVIN T. AGARWAL, WHICH HE DID NOT AVAIL. 2.3 IN THE LIGHT OF THE ABOVE MATERIAL ON RECORD, T HE ASSESSING OFFICER INITIATED PROCEEDINGS U/S. 147 OF THE ACT AND ISSUE D NOTICE U/S. 148 OF THE ACT TO THE ASSESSEE ON 16/10/2010. IN THE ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER AFFORDED THE ASSESSEE AN OPPO RTUNITY OF BEING HEARD IN THE MATTER TO EXPLAIN THE PURCHASE TRANSA CTIONS CARRIED OUT WITH THESE PARTIES IN THE RELEVANT PERIOD (SUPRA). IN THIS REGARD, THE STATEMENT OF SHRI PRAKASH J. SHAH, PARTNER OF THE A SSESSEE FIRM WAS RECORDED ON 12/12/2007 WHEREIN, INTER-ALIA, HE HAS STATED THAT HE IS ONLY ACTING AS AN INDENTING AGENT WHEREIN THE MATER IALS PURCHASED BY IT IS DIRECTLY DISPATCHED THROUGH THE PARTIES FROM WHO M THE MATERIAL WAS PURCHASED TO THE CUSTOMERS TO WHOM IT IS SOLD I.E. M/S. RAJASTHAN ALUMINIUM & M/S. D.C.METALS; PAYMENTS/RECEIPTS IN T HIS REGARD BEING BOTH BY WAY OF ACCOUNT PAYEE CHEQUE. ALTERNATIVELY , IT WAS SUBMITTED BY THE ASSESSEE THAT IN CASE THE SAID PURCHASES FRO M THE AFORESAID TWO 4 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) PARTIES ARE TREATED AS BOGUS, THEN THE CORRESPONDIN G SALES SHOWN BY THE ASSESSEE SHOULD ALSO BE CONSIDERED BOGUS AND THE DI FFERENCE BETWEEN PURCHASES AND SALES, BEING THE G.P ONLY THIS AMOUNT SHOULD BE CONSIDERED AS ITS INCOME. THE ASSESSING OFFICER DI D NOT ACCEPT THE EXPLANATIONS PUT FORTH BY THE ASSESSEE OBSERVING TH AT EXCEPT FOR MAKING THE AFORESAID CLAIMS, THE ASSESSEE COULD NOT FURNIS H MATERIAL TO PROVE THE MODE OF DELIVERY OF GOODS PURCHASED/SOLD, NAMES AND ADDRESSES AND OTHER RELATED PARTICULARS AND DETAILS OF THE PA RTIES TO WHOM GOODS WERE ALLEGEDLY SOLD, OR TO EXPLAIN WITH DOCUMENTARY EVIDENCE THE TRANSACTIONS ENTERED INTO FOR PURCHASE FROM THE AF ORESAID TWO PARTIES. 2.4 THE AFORESAID SUBMISSIONS OF THE ASSESSEE DID N OT FIND FAVOUR WITH THE ASSESSING OFFICER WHO OBSERVED THAT THESE AVERMENTS OF THE ASSESSEE WERE ALREADY DEALT WITH IN THE COURSE OF S URVEY, POST SURVEY INVESTIGATIONS. THE ASSESSING OFFICER WAS OF THE V IEW THAT AS PER THE FACTS ON RECORD THE TRANSACTIONS ENTERED INTO BY TH E ASSESEE WITH M/S. SHRADDHA SABURI MERCHANTS LTD., M/S. SAI KRIPA ME TALLIC TRADECOM LTD. (PURCHASE PARTIES), M/S. RAJASTHAN ALLUMINIUM AND M /S. D.C. METALS (SALE PARTIES) WERE ONLY ACCOMMODATION ENTRIES REN DERED BY SHRI PRAVIN T. AGARWAL AND ACCEPTED BY SHRI PRAKASH J. SHAH OF THE ASSESSEE FIRM AND NOT REAL SALE/PURCHASE TRANSACTIONS AS PRESENT LY CLAIMED BY THE ASSESSEE. IN THIS VIEW OF THE MATTER, THE ASSESSIN G OFFICER HELD THAT SINCE THE ASSESSEE COULD NOT SUBSTANTIATE THE PURCH ASES MADE FROM THE AFORESAID TWO CONCERNS, THE ENTIRE ALLEGED PURCHASE S OF RS.45,03,945/- SHOWN BY THE ASSESSEE FROM M/S. SHRADDHA SABURI MER CHANTS LTD. AND M/S. SAI KRIPA METALLIC TRADECOM LTD. AS BOGUS AND BROUGHT THE ENTIRE AMOUNT TO TAX IN THE ASSESSEES HANDS. THE ASSESSM ENT WAS ACCORDINGLY 5 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) COMPLETED UNDER SECTION 143(3) R.W.S. 147 OF THE AC T VIDE ORDER DATED 27/12/2011 WHEREIN, THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.50,61,630/- IN VIEW OF , INTER-ALIA, THE BOGUS PURCHASES AMOUNTING TO RS.45,03,945/-. 3.1 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR ASSESS MENT YEAR 2006- 07 DATED 27/12/2011, THE ASSESSEE PREFERRED AN APPE AL BEFORE THE CIT(APPEALS)-32, MUMBAI. THE CIT(APPEALS) DISPOSE D OFF THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDER DATED 14/02/2014 ALL OWING THE ASSESSEE PARTIAL RELIEF. 3.2 AFTER TAKING INTO ACCOUNT ALL THE FACTS BEFORE HIM, THE CIT(APPEALS) OBSERVED THAT THE FACTS OF THE CASE ON HAND FOR ASSESSMENT YEAR 2006-07 WAS SIMILAR TO THAT FOR ASS ESSMENT YEAR 2007- 08.THE LD. CIT(A) OBSERVED THATTHE ASSESSEE HAD ON LY FACILITATED THE CONCERNED PURCHASE AND SALE PARTIES, AS AN INDENTIN G AGENT FOR COMMISSION, IN THEIR TRANSACTIONS OF BOGUS SALE AND PURCHASES. THE CIT(APPEALS) OBSERVED THAT NO EVIDENCE WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER /DDIT TO ESTABLISH THAT THE ASSES SEE PURCHASED THE GOODS FROM THIRD PARTIES IN CASH, AS ALL THE TRANS ACTIONS OF THE ASSESSEE WITH BOTH THE CONCERNED SALE AND PURCHASE PARTIES W AS ADMITTEDLY THROUGH BANKING CHANNELS. IN THIS VIEW OF THE MATT ER, THE CIT(APPEALS) HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT THE ENTIRE PURCHASES BY THE ASSESSEE ARE ITS UNDISCLOSE D INCOME AND THAT THE CORRESPONDING SALES ONLY ARE GENUINE; PARTICULA RLY WHEN THE QUANTITY PURCHASED AND SOLD ARE IDENTICAL. THE CIT (APPEALS) WAS OF THE VIEW THAT THE ASSESSEE FACILITATED THESE BOGUS TRAN SACTIONS FOR THE PECUNIARY BENEFIT OF COMMISSION. THE CIT(APPEALS) WAS OF THE VIEW 6 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) THAT SINCE THE ENTIRE TRANSACTION WAS CLANDESTINE, THE ASSESSEE WOULD HAVE EARNED MORE THAN THE COMMISSION OF RS. 14,33 5/- DECLARED BY IT; (WHICH WAS THE DIFFERENCE BETWEEN THE CONCERNED SAL ES AND PURCHASE TRANSACTIONS) OR WHICH IS NORMALLY DECLARED IN THIS BUSINESS AT 1 TO 2% ACCORDING TO THE ASSESSEE. FOLLOWING THE RATIO OF THE DECISION OF THE CIT(APPEALS) IN THE ASSESSEES OWN CASE FOR ASSESSM ENT YEAR 2007-08 ON GROUNDS OF PRINCIPLE OF JUDICIAL CONSISTENCY, THE CIT(APPEALS) ESTIMATED THE COMMISSION EARNED BY THE ASSESSEE AT 5% OF THE SAID PURCHASE OF RS.45,03,945/- IN THE PECULIAR FACTS AND CIRCUMSTAN CES OF THE CASE ON HAND. 4. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) -31, MUMBAI DATED 14/02/2014 FOR ASSESSMENT YEAR 2006-07 BOTH REVENU E AND THE ASSESSEE HAVE PREFERRED APPEALS BEFORE THE TRIBUNAL IN RESPECT OF THE ISSUES HELD AGAINST THEM. 4.1.1 THE GROUNDS RAISED IN THE ASSESSEES APPEAL A RE AS UNDER:- GROUND I: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 32, MUMBAI ['THE CLT(A)'] ERRED IN CONFIRMING THE ACTION OF THE A.O. IN REOPENING THE ASSESSMENT U/S 147 OF THE ACT BASED ON THE SIMILAR REASONING & FACTS WHICH EXISTED IN THE CASE OF THE APPELLANT FOR THE A.Y. 2 007-08. 1.1 HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT THE ASSESSMENT WAS ORIGINALLY COMPLETED U/S. 143(3) OF THE ACT AFTER E XAMINING ALL THE PARTICULARS AND INFORMATION CALLED FOR AND SUBMITTED FOR THE PU RPOSE; 1.2 THE CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT THE APPELLANT HAD DISCLOSED FULLY AND TRULY ALL THE MATERIAL THE FACT S AND PARTICULARS AND THAT THERE WAS NO NEW MATERIAL ON RECORD TO SUGGEST THAT INCOME HAS ESCAPED ASSESSMENT. 7 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) 1.3 ON THE FACTS & IN CIRCUMSTANCES OF THE CASE, TH E CIT(A) ERRED IN CONFIRMING THE ACTION OF THE A.O. IN REOPENING OF ASSESSMENT U /S. 147 OF THE ACT WHICH WAS UNJUSTIFIED, UNWARRANTED AND BAD IN LAW. 1.4 THE APPELLANT PRAYS THAT THE REOPENING ASSESSME NT SO MADE BE HELD TO BE VOID AB-INITIO OR OTHERWISE AND AS SUCH BE CANCELLE D. WITHOUT PREJUDICE TO THE ABOVE GROUNDII : 2. THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADDITI ON OF RS. 18,48,429/- BEING ESTIMATING THE ADDITIONAL COMMISSION INCOME ON THE ACCOMMODATION BILLS OF BOGUS PURCHASES MADE FROM M/S. SAI KRIPA METTALIC TRADECOM PVT. LTD. AND M/S SHARDHHA SABURI MERCHANTS LTD. AT THE- RATE OF 5% OF THE TOTAL PURCHASE AMOUNT FROM THE ABOVE TWO PARTIES, AFTER DEDUCTING THE NET COMMISSION INCOME OF RS. 65,059/- SHOWN IN THE BOOKS OF ACCOUN T. 2.1 THE CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT HAD ACTED AS AN INDENTING AGENT AND HAD EARNED THE COMMISSION INCOME AS SHOWN IN THE FORM OF PROFIT WHICH WAS IN THE NATURE OF COMMI SSION AS SHOWN IN THE PROFIT & LOSS ACCOUNT AND AS SUCH NO ADDITION WAS C ALLED FOR. 2.2 THE CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT THE APPELLANT HAD SUBMITTED SUPPORTING EVIDENCES, CONFIRMATION OF ACC OUNTS AND CERTIFICATES FROM THE SAID TWO PARTIES, IN SUPPORT OF THE FACT T HAT THE SAID PARTIES HAD SOLD MATERIALS TO THE APPELLANT AND HAD DELIVERED MATERI ALS DIRECTLY TO THE CUSTOMERS OF THE APPELLANT AND THE PAYMENTS WERE MA DE BY ACCOUNT PAYEE CHEQUES AND NO CASH TRANSACTIONS WERE INVOLVED. 2.3 THE CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT THE APPELLANT WAS NOT GIVEN ANY OPPORTUNITY OF CROSS EXAMINING OF THE SAI D PARTIES WHOSE STATEMENT WAS THE SOLE BASIS OF TREATING THE ENTIRE PURCHASE AS BOGUS PURCHASES IN SPITE OF THE FACT THAT ALL THE DOCUMENTARY EVIDENCES HAD BEEN SUBMITTED WHICH WERE ON THE RECORD AND AS SUCH THE SAID PURCHASES W ERE GENUINE. 2.4 THE CIT(A) ERRED IN CONFIRMING THE ACTION OF TH E A.O. WHICH WAS BAD IN LAW, WITHOUT ANY ADEQUATE REASONS AND WAS AGAINST E QUITY AND JUSTICE REASONS & WAS AGAINST EQUITY AND JUSTICE AND AS SUC H NEED TO BE DELETED. 2.5 THE APPELLANT PRAYS THAT THE SAID ADDITION BE D ELETED. GROUND ILL : 3. THE CIT(A) ERRED IN TREATING A SUM OF RS.2,10,86 2/- AS AN ADDITIONAL PROFIT IN THE HANDS OF THE APPELLANT ON ACCOUNT OF PURCHASES OF RS. 45,03,945/-. 3.1 ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW, THE SAID DISALLOWANCE IS UNJUSTIFIABLE AND UNWARRANTED. 8 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) 3.2 THE APPELLANT PRAYS THAT THE SAID DISALLOWANCE BE DELETED. GROUND IV: 4. THE LEARNED C1T(A) ERRED IN CONFIRMING THE ACTIO N OF THE A.O. IN MAKING THE FOLLOWING DISALLOWANCES UNDER SECTION 43B OF THE AC T: SR. NO . PARTICULARS AMOUNT (RS.) I. PROFESSIONAL TAX 10,370/- 2. BONUS EXPENSES 11,099/- TOTAL DISALLOWANCE U/S 43B OF THE ACT 21,469/- 4.1 THE APPELLANT PRAYS THAT THE SAID DISALLOWANCE BE DELETED. GROUND V: 5. THE LEARNED CIT(A)ERRED IN CONFIRMING THE ACTIO N OF THE A.O. IN PROPORTIONATELY DISALLOWING THE INTEREST OF RS.90,5 70/- UNDER SECTION 36(1)(III) OF THE ACTON THE ALLEGED GROUND THAT THE APPELLANT HAD UTILIZED THE INTEREST BEARING FUNDS IN LENDING INTEREST FREE ADVANCES. 5.1 THE LEARNED CIT(A) FURTHER ERRED IN NOT APPREC IATING THE FACT THAT THE SAID INTEREST FREE ADVANCES WERE NOT OUT OF INTEREST BEA RING FUNDS AND WERE UTILIZED FOR THE PURPOSE OF BUSINESS CARRIED ON BY THE APPELLANT. 5.2 THE APPELLANT PRAYS THAT THE SAID DISALLOWANCE BE DELETED. 5.3 WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT P RAYS THAT THE SAID DISALLOWANCE BE APPROPRIATELY REDUCED. GROUND VI: 6. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE A.O. IN DISALLOWING DEPRECIATION OF RS.13,930/- ON THE ALLEGED GROUND T HAT THE BILLS FOR THE FIXED ASSETS WERE NOT FURNISHED. 6.1 THE APPELLANT PRAYS THAT THE SAID DISALLOWANCE BE DELETED. GROUND VII: 7. THE LEARNED C!T(A) ERRED IN CONFIRMING THE ACTIO N OF THE A.O. IN MAKING THE AD HOC DISALLOWANCES OF THE FOLLOWING EXPENSES AT T HE RATE OF 10%: 9 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) SR. NO. PARTICULARS AMOUNT (RS.) 1. ENTERTAINMENT EXPENSES 43,084/- 2. CONVEYANCE & TRAVELLING EXPENSES 1,64,474/- 3. STAFF WELFARE EXPENSES 58,448/- TOTAL 2,66,006/- 7.1 THE APPELLANT PRAYS THE SAID AD HOC DISALLOW ANCE BE DELETED. 7.2 WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT PRAYS THAT THE SAID DISALLOWANCE BE APPROPRIATELY REDUCED. GROUND VIII: 8 THE CIT(A) ERRED IN CONFIRMING ACTION OF A.O. IN LEVYING INTEREST U/S. 2348 AND 234C OF THE ACT. 8.1 THE APPELLANT PRAYS THAT LEVYING OF INTEREST BE DELETED. GROUND IX: 9. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER AND 1 OR AM END ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 4.1.2 AT THE OUTSET, THE LD. REPRESENTATIVE FOR THE ASSESSEE FOR THE ASSESSEE SUBMITTED THAT IN ITS APPEAL, THE ASSESSEE WILL BE PRESSING ONLY GROUND NO.I I( 2 TO 25) (SUPRA) AND THAT ALL OTHER GROUNDS I (1 TO 1.4) AND GROUND III TO GROUND IX ARE NOT BEING PRESSED. SIN CE THE GROUNDS AT S.NOS.I (1 TO 1.4),III (3 TO 3.2), IV (4 TO 4.1),V (5.TO 5.3), VI(6TO 6.1),VII(7 TO7.2, VIII ( 8 TO 8.1) AND IX ARE NOT PRESSED IN THIS APPEAL, THE SAME ARE RENDERED INFRUCTUOUS AND ACCORDINGLY DISMISSED. 4.2 THE GROUNDS RAISED IN REVENUES APPEAL ARE AS U NDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING AO TO DELETE RS.42,93,083/- HELD AS BOGUS PURCHASES BY THE ASSESSING OFFICER. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(APPEA LS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR TO SUBMIT ADDITIONAL NEW GROUND WHICH MAY BE NECESSARY. 10 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) 5.1 IN GROUND NO.II (2 TO 2.5) OF THE ASSESSEES A PPEAL , IT IS CONTENDED THAT THE CIT(APPEALS) ERRED IN ESTIMATING THE COMMISSION INCOME EARNED BY THE ASSESSEE ON ACCOMMODATION BILL S OF BOGUS PURCHASES MADE FROM M/S. SHRADDHA SABURI MERCHANTS LTD. AND M/S. SAI KRIPA METALLIC TRADECOM LTD. @5% OF THE TOTAL P URCHASES OF RS.45,03,945/- FROM THESE TWO PARTIES. 5.2 IN GROUNDS NO.1 TO 3 OF REVENUES APPEAL, IT IS CONTENDED THAT CIT(APPEALS) ERRED IN DIRECTING THE ASSESSING OFFIC ER TO DELETE THE ADDITION OF RS.45,03,945/- HELD BY THE ASSESSING OF FICER AS INCOME OF THE ASSESSEE ARISING OUT OF BOGUS PURCHASES FROM TH E AFORESAID TWO PARTIES AND IN ASSUMING THAT THE ASSESSEE HAS MEREL Y EARNED COMMISSION IN RESPECT OF THE AFORESAID PURCHASES. 5.3 THE ASSESSEES GROUNDS II(2 TO 2.5) AND REVENUE S GROUNDS (1 TO 3)(SUPRA) BEING BOTH IN RESPECT OF THE CONTRARY FI NDINGS OF THE ASSESSING OFFICER AND THE CIT(APPEALS) ON THE SAME ISSUE OF DETERMINATION OF THE INCOME EARNED BY THE ASSESSEE FROM OUT OF THE TRANS ACTIONS OF BOGUS PURCHASES AMOUNTING TO RS.45,03,945/- MADE BY THE A SSESSEE FROM THE TWO PARTIES M/S. SHRADDHA SABURI MERCHANTS LTD. AND M/S. SAI KRIPA METALLIC TRADECOM LTD., THESE ISSUES BEING INTER CO NNECTED AND ARISING FROM THE GROUNDS RAISED BY BOTH SIDES IN RESPECT OF THE SAME SET OF TRANSACTIONS, THEY ARE BEING CONSIDERED AND DISPOSE D OFF TOGETHER HEREUNDER. 5.4.1 THE LD. REPRESENTATIVE FOR THE ASSESSEE , ON THE ISSUE RAISED IN REVENUES APPEAL, VEHEMENTLY SUPPORTED THE IMPUGNED ORDER OF THE CIT(APPEALS) IN RESPECT OF ITS FINDING HOLDING T HAT THE ASSESSING OFFICER 11 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) WAS NOT JUSTIFIED IN HOLDING THAT THE ENTIRE PURCHA SES OF RS. 45,03,945/- MADE BY THE ASSESSEE FROM THE TWO PURCHASE PARTIE S I.E. M/S. SHRADDHA SABURI MERCHANTS LTD. AND M/S. SAI KRIPA M ETALLIC TRADECOM LTD. WAS THE ASSESSEES UNDISCLOSED INCOME; PARTIC ULARLY WHEN THERE WERE IMMEDIATE AND IDENTICAL QUANTITIES SOLD TO M/S .D.C.METALS AND M/S. RAJASTHAN ALUMINIUM THROUGH BANKING CHANNELS. IT IS SUBMITTED THAT THE CIT(APPEALS) HAD, AFTER DUE CONSIDERATION OF THE FACTUAL MATERIAL ON RECORD, FOUND THAT THE ASSESSEE HAD ONL Y FACILITATED THE CONCERNED PURCHASE AND SALE PARTIES AS AN INDENTING AGENT FOR REMUNERATION IN COMMISSION IN THEIR TRANSACTION OF BOGUS SALES AND PURCHASES. 5.4.2 IN RESPECT OF GROUND NO.II (2 TO 2.5) IN THE ASSESSES APPEAL, THE LD. REPRESENTATIVE FOR THE ASSESSEE CONTENDED THAT THE CIT(APPEALS), AFTER OBSERVING THAT THE ASSESSEE WAS ONLY AN INDEN TING AGENT OR FACILITATOR FOR THE AFORESAID SELLERS AND PURCHASER S IN THEIR TRANSACTIONS OF BOGUS SALES AND PURCHASES IN RETURN FOR REMUNERA TION OF COMMISSION, ERRED IN NOT ACCEPTING THE COMMISSION AS ADMITTED BY THE ASSESSEE. IT IS CONTENDED THAT THE ESTIMATION OF COMMISSION INC OME EARNED BY THE ASSESSEE ON THE AFORESAID TRANSACTIONS AS A FACILIT ATOR @5% THEREON WAS TOO HIGH AND THE SAME COULD NOT BE MORE THAN 1 TO 2 % THEREOF IN SUCH BUSINESS. 5.5.1 IN RESPECT OF THE GROUNDS RAISED AT S.NO. 1 T O 3 OF REVENUES APPEAL, THE LD. DEPARTMENTAL REPRESENTATIVE PLACIN G STRONG RELIANCE ON THE FINDINGS OF THE ASSESSING OFFICER IN THE ORDER OF ASSESSMENT, CONTENDED THAT THE CIT(APPEALS) HAD ERRED IN HOLDI NG THAT THE ASSESSEE WAS MERELY AN INDENTING AGENT RECEIVING COMMISSION IN RESPECT OF 12 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) TRANSACTIONS OF BOGUS PURCHASES AND IN CONSEQUENTLY DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F BOGUS PURCHASES FROM THE AFORESAID TWO PARTIES; I.E. M/S. SHRADDHA SABURI MERCHANTS LTD. AND M/S. SAI KRIPA METALLIC TRADECOM LTD.. IT WAS PRAYED THAT THE FINDING IN THE ASSESSING OFFICERS ORDER BE RESTOR ED. 5.5.2 IN RESPECT OF THE AVERMENTS OF THE LD. REPRES ENTATIVE FOR THE ASSESSEE ON THE ASSESSEES GROUNDS CLAIMING THAT TH E ASSESSEES INCOME FROM COMMISSION ON BOGUS PURCHASES SHOULD BE ACCEPT ED AS SUCH AND NOT AT 5% DETERMINED BY THE CIT(APPEALS), THE LD. D EPARTMENTAL REPRESENTATIVE SUBMITTED THAT, WITHOUT PREJUDICE T O REVENUES STAND THAT THE ENTIRE BOGUS PURCHASES AMOUNTING TO RS.45, 03,945/- MADE BY THE ASSESSEE FROM THE AFORESAID TWO PARTIES OUGHT TO BE BROUGHT TO TAX IN THE ASSESSEES HANDS AS HELD BY THE ASSESSING OF FICER, THE CLAIM OF THE LD. REPRESENTATIVE FOR THE ASSESSEE IS CONTRADICTOR Y AS BEFORE THE CIT(APPEALS) THE CLAIM WAS THAT COMMISSION IN SUCH TYPE OF BUSINESS WOULD BE 1 TO 2% THEREOF. IN THESE CIRCUMSTANCES, SINCE THE AVERMENTS OF THE ASSESSEE ARE BEREFT OF ANY CORROBORATIVE MAT ERIAL EVIDENCE, THE ASSESSEES APPEAL OUGHT TO BE DISMISSED. 5.6.1 WE HAVE HEARD THE RIVAL CONTENTIONS, IN RESPE CT OF BOTH THE ASSESSEES AS WELL AS REVENUES CROSS APPEALS, AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. THE F ACT OF THE MATTER, FROM THE ASSESSMENT TO THE FIRST APPELLATE PROCEEDI NGS, LEADING TO THE PRESENT APPEAL HAVE BEEN BRIEFLY NARRATED AT PARA 2 .1 TO 3.2 OF THIS ORDER (SUPRA). ON A PERUSAL OF THE IMPUGNED ORDER , WE FIND THAT THE CIT(APPEALS) HAS OBSERVED THAT THE QUESTIONED ADDIT ION OF RS.45,03,943/- HAS BEEN MADE FOR THE SIMILAR REASO NING AND FACTS, 13 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) WHICH EXISTED IN THE CASE OF THE ASSESSEE, FOR ASSE SSMENT YEAR 2007-08 AND ALSO FROM THE SAME PARTIES FROM WHOM THE PURCHA SES WERE MADE FROM I.E. M/S. SHRADDHA SABURI MERCHANTS LTD. AND M /S. SAI KRIPA METALLIC TRADECOM LTD. AND ALSO TO WHOM SALES WERE MADE I.E. M/S.D.C.METALS AND M/S. RAJASTHAN ALUMINIUM. BRIE FLY, THE FACTS OF THE CASE FOR ASSESSMENT YEAR 2006-07 WERE SIMILAR TO TH OSE OF ASSESSMENT YEAR 2007-08 EXCEPT FOR THE QUANTUM INVOLVED. THE CIT(A) WAS OF THE OPINION THAT THE ISSUE BEING IDENTICAL, KEEPING THE PRINCIPLES OF JUDICIAL CONSISTENCY IN MIND, THE FINDING RENDERED BY THE CI T(A) IN THE ORDER IN THE ASSESSEES CASE FOR ASSESSMENT YEAR 2007-08 IS TO BE FOLLOWED. IN THIS VIEW OF THE MATTER, THE CIT(A) PROCEEDED TO DE LETE THE ADDITION ON ACCOUNT OF BOGUS PURCHASE FROM THE AFORESAID PARTIE S AMOUNTING TO RS.45,03,945/- AND PROCEEDED TO DETERMINE THE COMM ISSION RECEIVED AT 5% THEREOF I.E. RS.2,25,197/-. 5.6.2 THE RELEVANT PORTION OF THE IMPUGNED ORDER O F THE CIT(A) AT PARA 4.3 THEREOF IS EXTRACTED HEREUNDER:- 4.3 I HAVE CONSIDERED - FACTS OF THE CASE, WRITTEN SUBMISSIONS OF THE ~.3 APPELLANT AS AGAINST THE OBSERVATIONS / FINDINGS OF THE AO IN THE ASSESSMENT ORDERS. THE SUBMISSION AND CONTENTIONS OF THE APPEL LANT ARE BEING DISCUSSED AND DECIDED AS UNDER.- I. IT IS SEEN FROM THE FACTS OF THE CASE THAT THE Q UESTIONED ADDITION OF RS. 45,03,943/- HAS BEEN MADE BY THE AO FOR THE SIMILAR REASONING AND FACTS WHICH EXISTED IN THE CASE OF THE ASSESSEE FOR A.Y.0 7 -OB. ALSO THE FACT OF THE CASE THAT, THE FACTS INVOLVED IN THE CASE OF THE AP PELLANT IN A.Y. 07-0B ARE SIMILAR AS MUCH AS IT WAS THE SAME PARTIES FROM WHO M SO CALLED PURCHASES WERE REFLECTED TO HAVE BEEN SHOWN, IT WAS THE SAME STATEMENT OF THE DIRECTOR OF M/S. SAI KRIPA METTALIC TRADECOM LTD. AND M/S. S HRADHA SABURI MERCHANTS LTD. VIZ. SHRI PRAVIN T. AGARWAL WHOSE STATEMENT HA S BEEN RELIED UPON AND FURTHER THE SALES REFLECTED BY THE APPELLANT OF SO CALLED GOODS PURCHASED WERE ALSO TO M/S. D.C. METALS AND M/ S. RAJASTHAN ALUMIN IUM. IN NUTSHELL, THE FACTS OF THE CASE IN THE YEAR UNDER CONSIDERATION ARE SAM E BUT FOR THE QUANTUM INVOLVED. 14 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) II. THE LD. CIT(A)31 IN APPEAL NO.CIT(A)31/IT.243/I TO.20(2)(1)/09-10 DATED 17.0B.2012 HAS PASSED A VERY DETAILED ORDER. IN THE PROCESS, THE PROCEEDINGS WERE REMANDED TO THE AO AND THE ADIT, THEIR COMMENT S ETC. WERE RECEIVED AND CONFRONTED TO THE APPELLANT AND AFTER SUCH ELAB ORATE EXERCISE, THE LD. CIT(A) -31 HAS GIVEN HIS FINDINGS AT PARA 2.4, PAGE 27 TO 32 OF HIS ORDER. AFTER THE DISCUSSION AT PARA 2.4 TO 2.4.2, THE LD. CIT(A) 'S HAS GIVEN HIS DIRECTIONS AT PARA 2.4.3 OBSERVING AS UNDER :- 2.4.3. THEREFORE, ON ACCOUNT OF THESE FACTS AVAILAB LE IN THE CASE OF THE APPELLANT, AS DISCUSSED ABOVE AND FURTHER IN THE AB SENCE OF ANY NEW FACTS AND EVIDENCES BROUGHT ON RECORD BY THE AO AS WELL AS IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCES PLACED ON RE CORD IN SPITE OF REMANDING THE MATTER ON VARIOUS OCCASIONS, I FIND I T CANNOT BE HELD THAT THE ENTIRE PURCHASES MADE BY THE APPELLANT ARE OUT OF ITS UNACCOUNTED SOURCES OR THE SAME IS TO BE CONSIDERED AS ITS UNEXPLAINED INCOME. EVEN OTHERWISE, EVEN IF THE PUR CHASES ARE HELD AS BOGUS, TO MY CONSIDERED OPINION, IT CANNOT BE HE LD THAT THE CORRESPONDING SALES ARE GENUINE; PARTICULARLY WHEN THE QUANTITY PURCHASED AND SOLD ARE SAME. OBVIOUSLY, IN SUCH A C IRCUMSTANCE IF THE PURCHASES ARE CONSIDERED THE CORRESPONDING SALES AL SO HAS TO BE BOGUS. THEREFORE, ON ACCOUNT OF THE SAME, IT IS EVI DENT THAT UNDER THE GIVEN FACTS AND CIRCUMSTANCES THE APPELLANT HAS MER ELY ISSUED ACCOMMODATION SALES BILLS AGAINST THE PAYMENT OF PR E-FIXED COMMISSION AS DISCUSSED ABOVE. HOWEVER, SINCE THE E NTIRE TRANSACTION IS CARRIED OUT IN A CLANDESTINE MANNER, IT CANNOT B E HELD THAT THE RATE OF COMMISSION IS AS PER THE NORMAL PRACTICE FOLLOWE D IN THIS LINE OF BUSINESS. NATURALLY, IT HAS TO BE MORE THAN THE NOR MAL RATE OF COMMISSION PAID IN THIS LINE OF BUSINESS. IN THE CA SE OF VIJAY PROTEINS LTD VS. ACIT REPORTED IN 15 ITD 428, THE HON'BLE IT AT AHMEDABAD 'C' BENCH UNDER SIMILAR CIRCUMSTANCES, WHERE THE AO DIS ALLOWED THE ENTIRE EXPENDITURE ON ACCOUNT OF PURCHASES MADE FR OM CERTAIN PARTIES TRATING THE SAME AS BOGUS, HAS HELD THAT ' IT IS AN ELEMENTARY RULE OF ACCOUNTANCY AS WELL AS OF TAXATION LAWS THA T PROFIT FROM BUSINESS CANNOT ASCERTAINED WITHOUT DEDUCTING COST OF PURCHASE FROM SALES/ OTHERWISE IT COULD AMOUNT TO LEVY OF IN COME TAX ON GROSS RECEIPTS OR ON SALES. SUCH RECOURSE IS NOT PERMISSI BLE UNLESS IT IS SPECIFICALLY AUTHORIZED TO DO SO UNDER ANY PARTICUL AR PROVISIONS CONTAINED IN THE ACT. IT HAS BEEN HELD BY THE HON 'BLE TRIBUNAL THAT IN SUCH CIRCUMSTANCES, A CERTAIN PERCENTAGE OF EXPENDI TURE HAS TO BE DISALLOWED ON ACCOUNT OF INFLATION OF PURCHASE PRI CE. THE ITAT HAS HELD THAT IF PURCHASES ARE MADE FROM THE OPEN MARK ET WITHOUT INSISTING FOR THE GENUINE BILLS, THE SUPPLIERS MAY BE WILLING TO SELL 15 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) THOSE PRODUCTS AT A MUCH LOWER RATE COMPARED TO TH E RATE AT WHICH THEY MAY CHARGE IN CASE THE DEALER HAS TO GIVE A GE NUINE SALE INVOICE IN RESPECT OF THAT SALE AND SUPPLY OF GOODS. THERE MAY BE VARIOUS FACTORS DUE TO WHICH THERE IS BOUND TO BE A SUBSTA NTIAL DIFFERENCE BETWEEN THE PARTY PURCHASE PRICE OF UNACCOUNTED MA TERIAL AND RATE OF PURCHASE OF UNACCOUNTED FOR GOODS. THERE MAY B E A SAVING ON ACCOUNT OF SALES-TAX AND OTHER TAXES AND DUTIES WHI CH MAY BE LEVIABLE IN RESPECT OF MANUFACTURE OF SALE OF GOODS IN QUEST ION. THE SUPPLIERS OR MANUFACTURERS MAKE A SUBSTANTIAL SAVING IN THE I NCOME TAX IN RESPECT OF INCOME FROM SALE OF UNACCOUNTED GOODS PR ODUCED AND SOLD BY THEM. THIS MAY ALSO BE ONE OF THE FACTORS DUE T O WHICH THE SELLER MAY BE WILLING TO CHARGE LOWER RATES FOR UNACCOUNTE D GOODS AS COMPARED TO ACCOUNTED FOR GOODS. THE AR HAS NOT FIL ED THE DETAILS OF COMMISSION EARNED ON THIS BOGUS TRANSACTION SEPARAT ELY. HOWEVER, FROM THE P&L ACCOUNT IT IS SEEN THAT IT HAS SHOWN T OTAL COMMISSION OF RS.85,948.70 ON TOTAL PURCHASES OF RS.5,0L,02,85 0/- WHICH IS INCLUSIVE OF THE BOGUS SALES MADE TO M/S. RAJASTHA N ALLUMINIUM AND M/S. D.C. METALS. THE SAME WORKS OUT TO 0.17% OF TH E TOTAL PURCHASES. THE BOGUS PURCHASES MADE FROM M/S. SHRAD DHA SABURI MERCHANTS LTD. AND M/S. SAI KRIPA METALLIC TRADECO M LTD IS OF RS.3,82,69,759/- FOR THE RELEVANT ACCOUNTING YEAR. THE AR HAS CONSISTENTLY ARGUED THAT THE RATE OF COMMISSION ALL OWED IN THIS LINE OF BUSINESS NORMALLY DOES NOT EXCEED MORE THAN 1% TO 2 % OF THE SALE VALUE. HOWEVER, TO MY CONSIDERED OPINION THE SAME C ANNOT BE TAKEN ON ITS FACE VALUE, PARTICULARLY IN VIEW OF THE LACK OF EVIDENCES AND THE CLANDESTINE NATURE OF BUSINESS CARRIED OUT BY THE A PPELLANT. AND ALSO CONSIDERING TO THE FACT THAT THE APPELLANT ITSELF H AS SHOWN SUCH COMMISSION OF 0.17%( AS DISCUSSED ABOVE) WHICH IS M UCH LESSER THAN THE RATE OF COMMISSION ADMITTED BY THE AR IN THE SI MILAR LINE OF BUSINESS OR PRACTICE. THEREFORE, ON ACCOUNT OF THE SAME, I FIND IT WOULD MEET THE END OF JUSTICE, IN CASE, THE RATE OF COMMISSION CHARGED BY THE APPELLANT IS TAKEN @ 5% OF THE TOTAL PURCHASE VALUE OF THE APPELLANT DURING THE RELEVANT ACCOUNTING YEAR. THE SAME ON TOTAL SUCH PURCHASES OF RS.3,82,69,759/- WORKS OUT TO RS. 19,13,488/-FOR THE RELEVANT ASSESSMENT YEAR. SINCE, THE APPELLANT HAS SHOWN NET DIFFERENCE BETWEEN THE SALE AND PURCHASE OF RS.85,9 48.70 IN ITS TRADING ACCOUNT PERTAINING TO THE BOGUS PURCHASES A S WELL AS GENUINE . TRADING CARRIED OUT, THEREFORE, THE PROPORTIONATE PROFIT OR COMMISSION PERTAINING TO BOGUS TRANSACTION IS WORKE D OUT AT RS.65,059/-(I.E. 0.17% OF RS.3,82,69,759/-) WHICH I S ALREADY ASSESSED TO TAX, THEREFORE, CONSIDERING TO THE SAME, THE BAL ANCE AMOUNT OF RS.18,48,429/- (I.E. RS.19,13,488/- (-) RS.65,059/- ) OF ADDITION MADE ON THIS ACCOUNT IS SUSTAINED AND THE REMAINING ADDI TION MADE IS 16 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) DIRECTED TO BE DELETED. THIS GROUND RAISED BY THE A PPELLANT IS THEREFORE PARTLY ALLOWED. III. AS THE FACTS OF THE CASE ON HAND ARE SIMILAR, THE ISSUE IS IDENTICAL WITH THAT OF THE ASSESSEES CASE FOR A.Y 2007-08. THERE FORE KEEPING THE VIEW PRINCIPLES OF JUDICIAL CONSISTENCY, IT IS DIRECTED THAT THE RATE OF COMMISSION CHARGED BY THE APPELLANT BE TAKEN AT 5% OF THE TOTA L VALUE OF THE SUCH PURCHASES DURING THE RELEVANT ACCOUNTING YEAR. THE TOTAL OF SUCH PURCHASES FOR THE RELEVANT ASSESSMENT YEAR COMES TO RS.45,03, 945/- AND 5% PROFIT ON THE SAME WORKS OUT TO RS.2,25,197/-. FROM THIS AM OUNT THE QUANTUM OF PROFIT PERTAINING TO BOGUS TRANSACTIONS TO THE TUNE OF RS.14,335/- (SUBJECT TO VERIFICATION BY THE ASSESSING OFFICER) WHICH IS ALR EADY OFFERED BY THE ASSESSEE MAY BE SUBTRACTED AND THE BALANCE RESULTANT AMOUNT SHOULD BE TREATED AS THE AMOUNT OF ADDITIONAL PROFIT I.E. RS.2,10,862/- (RS.2,25,197 RS.14,335/-) WHICH IS TO BE TAXED IN THE HANDS OF THE APPELLANT ON ACCOUNT OF SUCH PURCHASES OF RS.45,03,945/-. THE APPELLANT GETS CO NSEQUENTIAL RELIEF. ACCORDINGLY, THIS GROUND OF APPEAL IS PARTLY ALLOWE D. 5.6.3 BEFORE US, BOTH REVENUE AND THE ASSESSEE HAVE MERELY REITERATED THEIR RESPECTIVE CLAIMS (I) OF REVENUE THAT THE ENT IRE PURCHASE TO M/S. SHRADDHA SABURI MERCHANTS LTD. AND M/S. SAI KRIPA M ETALLIC TRADECOM LTD. AMOUNTING TO RS.45,03,945/- BE BROUGHT TO TAX AS THE ASSESSEES INCOME AND; (II) OF THE ASSESSEE THAT THE COMMISSIO N INCOME ON PURCHASES BE ASSESSED AS DECLARED BY IT. WE FIN D THAT APART FROM PUTTING FORTH THESE AVERMENTS, BOTH PARTIES HAVE FA ILED TO BRING ON RECORD ANY MATERIAL EVIDENCE TO CONTROVERT THE FIND INGS RENDERED BY THE LD. CIT(A) IN THE IMPUGNED ORDER ON THESE TWO ISSUE S IN CROSS APPEALS. IN THIS VIEW OF THE MATTER, AND AFTER CAREFUL CONSI DERATION OF THE MATERIAL ON RECORD, WE FIND NO REASON FOR INTERFERE NCE IN THE ORDER OF THE LD. CIT(A) ON BOTH THESE ISSUES BEFORE US RAISE D RESPECTIVELY BY REVENUE AND THE ASSESSEE. WE, THEREFORE, CONFIRM T HE ORDER OF THE LD. CIT(A) IN HOLDING THAT 17 ITA NO. 2544/MUM/2014 (ASSESSMENT YEAR : 2006-07) (I) THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE EN TIRE BOGUS PURCHASES BY THE ASSESSEE FROM THE AFORESAID TWO PA RTIES AMOUNTING TO RS.45,03,945/- IN THE ASSESSEES UNDIS CLOSED INCOME AND (II) THAT THE ASSESSEE HAD EARNED COMMISSION @ 5% FOR CLANDESTINELY FACILITATING THE BOGUS TRANSACTIONS OF THE PARTIES TO PURCHASES AND SALES. CONSEQUENTLY, REVENUES GROUNDS AT SR. NOS. 1 TO 3 AND THE ASSESSEES GROUND AT SR. NO. II ( 2 TO 2.5) ARE DIS MISSED. 6. IN THE RESULT, BOTH THE ASSESSEES APPEAL FOR AS ST. YEAR 2006-07 AND REVENUES CROSS APPEAL ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/02/2016 SD/- SD/- (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 17/02/2016 VM , SR. PS 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. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI