DCIT 14(1)(2), MUMBAI V. FAGIOL INDIA P LTD, MUMBAI

ITA 4557/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9785 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 05-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POOJA SWARUP
• Assessee Lawyers: K GOPAL NEHA PARANJAPE
• Keywords: Reopening of assessment; Bogus purchase; Unexplained expenditure; Accommodation entries
• Section: 69C; 142(1); 147; 148

Judgement Text

1 ITA 4557 & 4558/MUM/2015 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A.NOS. 4557 & 4558/MUM/2015 (ASSESSMENT YEARS : -2009-10 & 2010-11) DY.CIT , 14(1)(2), MUMBAI VS M/ S FAGIOLI INDIA PVT LTD 104, A-WING, DELPHI BLDG, HIRANANDANI BUSINESS PARK, POWAI, MUMBAI-76 PAN : AAACF6372K APPELLANT RESPONDENT APPELLANT BY MS POOJA SWARUP RESPONDENT BY SHRI K GOPAL / NEHA PARANJAPE DATE OF HEARING 14 -06-2017 DATE OF PRONOUNCEMENT 28-07-2017 O R D E R PER G MANJUNATHA, AM : THESE ARE TWO APPEALS FILED BY THE REVENUE DIRECT ED AGAINST SEPARATE, BUT IDENTICAL ORDER OF CIT(A)-22, MUMBAI DATED 26-05-20 15 FOR THE ASSESSMENT YEARS 2009-10 & 2010-11. SINCE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD T OGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA NO.4 557/MUM/2015 FOR THE ASSESSMENT YEAR 2009-10 ARE THAT THE ASSESSEE COMPA NY ENGAGED IN THE BUSINESS OF PROVIDING LIFTING SOLUTIONS FOR HEAVY A ND ODD SIZED EQUIPMENT RIGHT 2 ITA 4557 & 4558/MUM/2015 FROM DESIGNING TO EXECUTION OF LIFTING JOB, FILED I TS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 30-09-2009 DECLARING TOT AL INCOME AT RS.3,0970,753. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961. SUBSEQUENTLY, THE AO RECEIVED INFORMATION FR OM THE INVESTIGATION WING OF THE INCOME-TAX DEPARTMENT, MUMBAI, WHICH HAS FOR WARDED DETAILS AND STATEMENTS OF HAWALA OPERATORS, WHO HAVE CONFIRMED TO HAVE GIVEN BOGUS BILLS TO CERTAIN COMPANIES, PREPARED BY THE MAHARASHTRA S ALES-TAX DEPARTMENT AND IT WAS INFORMED THAT THE ASSESSEE IS ONE OF THE BEN EFICIARIES OF SUCH BOGUS PURCHASE BILLS. THEREFORE, THE AO HAD REASON TO BE LIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT AND HENCE REOPENED THE ASSESSMENT BY ISS UING NOTICE U/S 148 OF THE ACT. SUBSEQUENTLY, THE CASE HAS BEEN CONVERTED INT O SCRUTINY ASSESSMENT AND ACCORDINGLY, NOTICES U/S 143(2) AND 142(1) OF THE A CT WERE ISSUED. IN RESPONSE TO NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE AS SESSEE APPEARED FROM TIME TO TIME AND FURNISHED RELEVANT DETAILS, AS CALLED FOR. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS PURCHASED MATERIALS FROM M/S RUSHABH E NTERPRISES FOR RS.37,79,072/- AND M/S SWATISK ENTERPRISES FOR RS.1 5,53,156 AND BOTH THE PARTIES WERE LISTED IN THE LIST PREPARED BY THE MAH ARASHTRA SALES-TAX DEPARTMENT AS HAWALA OPERATORS INVOLVED IN PROVIDIN G BOGUS PURCHASE BILLS 3 ITA 4557 & 4558/MUM/2015 WITHOUT ACTUAL DELIVERY OF GOODS. THEREFORE, THE A O ASKED THE ASSESSEE TO FURNISH NECESSARY EVIDENCES IN SUPPORT OF PURCHASES MADE FROM THE ABOVE PARTIES. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASS ESSEE PRELIMINARILY RAISED OBJECTIONS FOR REOPENING OF THE ASSESSMENT ON THE G ROUND THAT THE REOPENING OF ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED BY THE DEPARTMENT FROM THE EXTERNAL SOURCE IS NOT TENABLE IN LAW. AS REGAR DS PURCHASES FROM THE ALLEGED HAWALA OPERATORS, IT WAS SUBMITTED THAT IT HAS PURCHASED MS PLATE, MS CHANNEL AND MS ANGLE FROM M/S RUSHABH ENTERPRISES A ND M/S SWASTIK ENTERPRISES, WHICH ARE THE MATERIALS REQUIRED TO CA RRY OUT BUSINESS ACTIVITY OF PROVIDING LIFTING SOLUTIONS OF HEAVY EQUIPMENT FROM THE GROUND LEVEL TO THE CRITICAL POINT OF ITS FINAL PLACEMENT. THESE RAW M ATERIALS WERE SENT TO DIFFERENT PLACES OF WORK. IN THIS REGARD, THE ASSESSEE HAS F URNISHED DETAILS OF PURCHASE ORDER, INVOICES, DELIVERY CHALLANS, CONSIGNMENT NOT E AND BANK STATEMENT SHOWING PAYMENT DETAILS AGAINST THE PURCHASE BILLS THROUGH PROPER BANKING CHANNEL. THE AO, AFTER CONSIDERING THE RELEVANT SU BMISSIONS OF THE ASSESSEE AND ALSO RELYING UPON CERTAIN JUDICIAL PRECEDENTS O BSERVED THAT IN VIEW OF THE DETAILED INVESTIGATION CARRIED OUT BY THE SALES-TAX DEPARTMENT, MUMBAI AND THEIR FINDINGS COUPLED WITH STATEMENT OF THE PARTIE S ADMITTING THE FACT OF ISSUANCE OF BOGUS BILLS AND NON FURNISHING OF DOCUM ENTARY EVIDENCES TO ESTABLISH GENUINENESS OF SUCH PURCHASES, THE PURCHA SES MADE FROM THE ALLEGED 4 ITA 4557 & 4558/MUM/2015 PARTIES WERE TREATED AS BOGUS PURCHASES. THE ASSES SEE HAS FAILED TO FURNISH ANY EVIDENCE TO REBUT THE FINDINGS. AND THAT THESE TRANSACTIONS HAVE RESULTED INTO REDUCING THE PROFITS OF THE ASSESSEE BY INFLAT ING THE PURCHASES AND HENCE, THE TOTAL PURCHASES MADE FROM THE ABOVE TWO PARTIES AMOUNTING TO RS.53,32,228 WAS TREATED AS UNEXPLAINED EXPENDITURE U/S 69C OF THE INCOME- TAX ACT, 1961 AND ADDED BACK TO THE TOTAL INCOME. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEF ORE CIT(A). 4. BEFORE THE CIT(A), THE ASSESSEE REITERATED ITS SUBM ISSIONS MADE BEFORE THE AO. THE ASSESSEE FURTHER SUBMITTED THAT IT HAS PURCHASED RAW MATERIALS FROM M/S RUSHABH ENTERPRISES AND M/S SWASTIK ENTERP RISES AND THE RAW MATERIALS WERE USED IN EXECUTION OF WORKS CONTRACT AT VARIOUS PLACES AND NECESSARY EVIDENCE HAS BEEN FILED BEFORE THE AO. T HE ASSESSEE FURTHER SUBMITTED THAT ITS PURCHASES ARE SUPPORTED BY PROPE R PURCHASE INVOICES, DELIVERY CHALLANS, CONSIGNMENT NOTE AND BANK STATEM ENT FOR HAVING REMITTED THE PAYMENT FOR PURCHASES THROUGH PROPER BANKING CH ANNELS. THE AO IGNORING ALL EVIDENCES, FILED TO JUSTIFY THE PURCHASES, MADE ADDITIONS SOLELY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING WHICH STATED THAT THE ABOVE TWO PARTIES WERE HAWALA OPERATORS INDULGING I N PROVIDING ACCOMMODATION ENTRIES WITHOUT ACTUAL DELIVERY OF GO ODS. THE ASSESSEE FURTHER SUBMITTED THAT THE AO NEITHER POINTED OUT ANY IRREG ULARITIES IN BOOKS OF 5 ITA 4557 & 4558/MUM/2015 ACCOUNT NOR HAS DISPUTED SALES DECLARED BY THE ASSE SSEE. THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNT AND ITS BOOKS OF ACCOUNT ARE AUDITED BY THE CA WHERE THE AUDITORS HAVE GIVEN AN INCLUSIVE R EPORT ABOUT THE BOOKS OF ACCOUNT AND ITS AFFAIRS. THE ASSESSEE FURTHER SUBM ITTED THAT IT HAS REPORTED GROSS PROFIT OF MORE THAN 37% WHICH IS QUITE HIGH I N THIS LINE OF BUSINESS WHEN COMPARED TO INDUSTRIAL AVERAGE. THEREFORE, THE AO WAS COMPLETELY ERRED IN DOUBTING THE PURCHASES WHICH ARE SUPPORTED BY VALID DOCUMENTS. 5. THE CIT(A), AFTER CONSIDERING THE RELEVANT SUBMISSI ONS OF THE ASSESSEE DISMISSED THE GROUND RAISED BY THE ASSESSEE CHALLEN GING THE VALIDITY OF REOPENING ASSESSMENT. INSOFAR AS ADDITIONS TOWARDS ALLEGED BOGUS PURCHASES, THE CIT(A), BY FOLLOWING THE DECISION OF ITAT, MUMB AI BENCHES IN THE CASE OF RAMESH KUMAR & CO VS ACIT IN ITA NO.2959/MUM/2014, HELD THAT IN THE CASE OF CONTRACTOR, IF HE DECLARES A NET PROFIT OF 8%, T HEN IT IS REASONABLE. IN THE ABSENCE OF ANY FINDING AS TO RECEIVING CASH BACK FR OM THE SUPPLIERS TOWARDS PURCHASES MADE FROM ALLEGED BOGUS SUPPLIERS, ADDITI ONS CANNOT BE MADE, BASED ON THE INFORMATION RECEIVED FROM SALES-TAX DE PARTMENT. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAS DECLARED A G ROSS PROFIT OF 37.13% WHICH IS ABOVE THE NORMAL PROFIT DECLARED IN THIS LINE OF BUSINESS. THE AO HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE ASS ESSEE HAS RECEIVED CASH BACK FROM THE SUPPLIERS. WITH THESE OBSERVATIONS, THE CIT(A) DELETED THE 6 ITA 4557 & 4558/MUM/2015 ADDITION MADE BY THE AO TOWARDS BOGUS PURCHASES. A GGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD.DR SUBMITTED THAT THE LD.CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE SUPPLIER HAS ADMITTED BEFORE SALES-TAX AUT HORITIES THAT THEY WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES WITHOUT ACTUAL DELIVERY OF GOODS. THOUGH THE ASSESSEE HAS FILED CERTAIN EVIDENCES IN THE FORM OF PURCHASE BILLS AND PAYMENT PROOF, BUT FAILED TO REBUT THE ALLEGATI ONS MADE BY THE AO IN THE BACKDROP OF FINDINGS OF THE MAHARASHTRA SALES-TAX D EPARTMENT, WHICH CONFIRMED THAT THE SAID PARTIES WERE INVOLVED IN PR OVIDING ACCOMMODATION ENTRIES. THE ASSESSEE FAILED TO PRODUCE THE PARTIE S IN PERSON AND ALSO WHEN THE AO HAS ISSUED NOTICES TO THE ABOVE PARTIES, THE NOTICES WERE RETURNED UNSERVED WITH THE REMARK, NO SUCH PARTIES ARE AVAI LABLE. THE LD.DR FURTHER REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NK PROTEINS LTD IN SLP 759 OF 2017 DATED 16-01-2017 SUBMITTED T HAT ONCE IT IS PROVED THAT THE PURCHASES ARE BOGUS, THEN ADDITION SHOULD BE MA DE FOR ENTIRE PURCHASES AND NOT FOR PROFIT ELEMENT EMBEDDED IN SUCH PURCHAS ES. THE CIT(A), WITHOUT APPRECIATING THE FACTS SIMPLY DELETED ADDITION MADE BY THE AO. THEREFORE, THE LD.DR REQUESTED TO UPHOLD THE ADDITION MADE BY THE AO. 7. ON THE OTHER HAND, THE LD.AR FOR THE ASSESSEE STRON GLY SUPPORTING THE ORDER OF CIT(A) SUBMITTED THAT THE ASSESSEE HAS PRO DUCED ALL THE DETAILS IN 7 ITA 4557 & 4558/MUM/2015 SUPPORT OF PURCHASES MADE FROM ABOVE TWO PARTIES RI GHT FROM PURCHASE ORDER TO PAYMENT DETAILS WHICH, UNDOUBTEDLY PROVES THAT T HE PURCHASES ARE GENUINE IN NATURE. THE AO, WITHOUT CONDUCTING ANY FURTHER ENQUIRIES, SIMPLY MADE ADDITION ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING WITHOUT ALLOWING THE ASSESSEE TO CROSS EXAMINE THE PARTIES. ON THE OTHER HAND, ASSESSEE HAS FURNISHED ALL THE EVIDENCES TO PROVE T HE PURCHASES. THE AO NEVER DOUBTED THE SALES DECLARED BY THE ASSESSEE NOR POIN TED OUT ANY INCONSISTENCY IN THE BOOKS OF ACCOUNT OR STOCK DETAILS MAINTAINED BY THE ASSESEE. THE ASSESSEE HAS FURNISHED COMPLETE DETAILS OF ANALYSIS OF STOCK AND THERE IS NO DIFFERENCE IN QUANTITATIVE DETAILS FILED BY THE ASS ESSEE. IN THE ABSENCE OF ANY OBSERVATION AS TO INCORRECTNESS OF BOOKS OF ACCOUNT AND STOCK DETAILS AND ALSO THE FACT THAT SALES ARE ACCEPTED, THE AO WAS INCORR ECT IN REJECTING PURCHASES SOLELY ON THE BASIS OF THIRD PARTY INFORMATION. 8. THE LD.AR REFERRING TO THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF NK PROTEINS LTD VS DCIT (SUPRA), SUBMITTED THAT THE FACTS OF THE CASE BEFORE THE HONBLE SUPREME COURT, ARE ALTOGETHER DIFFERENT FROM THE FACTS OF THE ASSESSEES CASE. IN THE CASE BEFORE THE HONBLE SU PREME COURT, THERE WAS SEARCH IN THE PREMISES OF THE ASSESSEE AND DURING T HE COURSE OF SEARCH CERTAIN UNSIGNED CHEQUE BOOKS AND BLANK BILLS AND VOUCHERS OF CONCERNS FROM WHOM THE PURCHASES WERE MADE, WERE FOUND AND SEIZED. UN DER THESE FACTS AND 8 ITA 4557 & 4558/MUM/2015 CIRCUMSTANCES, THE COURT HELD THAT PURCHASES MADE F ROM THOSE PARTIES WERE BOGUS AND HENCE ADDITION NEEDS TO BE MADE AT 100% O F PURCHASES. THE LD.AR REFERRING TO ANOTHER DECISION RELIED UPON BY THE LD .DR IN THE CASE OF CIT VS M/S CORPORATE MAHAL I.T. APPEAL NO.170 OF 2009 SUB MITTED THAT THE FACTS OF THIS CASE ARE DISTINGUISHABLE FROM ASSESSEES CASE, THEREFORE, CANNOT BE APPLIED TO THE ASSESSEES CASE. THE CIT(A) HAS CONSIDERED RELEVANT FACTS AND ALSO RELIED UPON THE DECISION OF ITAT WHILE DELETING THE ADDITI ON MADE BY THE AO AND HIS ORDER SHOULD BE UPHELD. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERIAL S AVAILABLE ON RECORD AND ALSO GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. THE AO DISALLOWED PURCHASES FROM TWO PARTIES, VIZ.M/S RUSH ABH ENTERPRISES AND M/S SWASTIK ENTERPRISES, ON THE BASIS OF LIST OF HAWALA OPERATORS PUBLISHED BY MAHARASHTRA SALES-TAX DEPARTMENT WHICH CONTAINED TH E NAME OF ABOVE PARTIES. THE NOTICES SENT TO THESE PARTIES WERE R ETURNED UNSERVED BY POSTAL AUTHORITIES WITH REMARK, NO SUCH PARTIES ARE EXIST ED AT THE GIVEN ADDRESS. UNDER THESE CIRCUMSTANCES, THE AO WAS OF THE OPINIO N THAT THE ASSESSEE FAILED TO DISCHARGE ONUS CAST UPON IT TO PROVE THE PURCHAS ES WITH NECESSARY EVIDENCE. THE AO FURTHER WAS OF THE OPINION THAT ALTHOUGH ASS ESSEE HAS FURNISHED CERTAIN EVIDENCE IN THE FORM OF PURCHASE BILLS AND PAYMENT DETAILS FAILED TO REBUT THE ALLEGATIONS MADE IN THE BACKDROP OF OBSERVATIONS OF SALES-TAX DEPARTMENT 9 ITA 4557 & 4558/MUM/2015 WHICH FOUND THAT THE SAID PARTIES WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES WITHOUT ACTUAL DELIVERY OF GOODS. THEREFOR E, HE OPINED THAT PURCHASES FROM ABOVE PARTIES ARE BOGUS IN NATURE AND HENCE, M ADE ADDITION U/S 69C OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT ME RELY BECAUSE PARTIES HAVE NOT RESPONDED TO THE NOTICE, ADDITION CANNOT BE MAD E TOWARDS PURCHASES, WHICH ARE SUPPORTED BY VARIOUS DOCUMENTS. THE ASSE SSEE FURTHER CONTENDED THAT THE AO HAS NOT POINTED OUT ANY IRREGULARITIES IN THE BOOKS OF ACCOUNT OR STOCK DETAILS AND IN THE ABSENCE OF ANY FINDING AS TO THE INCORRECTNESS OF BOOKS OF ACCOUNT, ADDITION CANNOT BE MADE SOLELY ON THE B ASIS OF THIRD PARTY INFORMATION, THAT TOO, WITHOUT PROVIDING AN OPPORTU NITY OF CROSS EXAMINATION. 10. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATERIAL ON RECORD, WE FIND THAT THE AOS MAIN ALLEGATION IS THAT ABOVE TWO PART IES ARE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES AS PER THE LIST PUBLISHED BY MAHARASHTRA SALES-TAX DEPARTMENT. ON THE OTHER HAND, ASSESSEE HAS FURNIS HED CERTAIN EVIDENCES IN THE FORM OF PURCHASE ORDER, PURCHASE BILL, DELIVERY CHALLAN, CONSIGNMENT NOTE AND PAYMENT DETAILS TO PROVE THE PURCHASES. THE AS SESSEE ALSO FURNISHED COMPLETE DETAILS OF QUANTITATIVE STOCK STATEMENT AN D ARGUED THAT THERE IS NO DIFFERENCE IN STOCK DETAILS. THOUGH THE ASSESSEE H AS PRODUCED CERTAIN DETAILS TO PROVE THE PURCHASES FROM THE SAID PARTIES, IN VI EW OF THE FACT THAT THE ASSESSEE COULD NOT PROVE THE EXISTENCE OF THE PARTI ES AND ALSO COULD NOT REBUT 10 ITA 4557 & 4558/MUM/2015 THE FINDING OF MAHARASHTRA STATE SALES-TAX DEPARTME NT THAT THE PARTIES WERE HAWALA OPERATORS, INVOLVED IN PROVIDING ACCOMMODATI ON ENTRIES, THE PURCHASES FROM THE SAID PARTIES CANNOT BE ACCEPTED AS GENUINE . BUT KEEPING IN VIEW THE FACT THAT THE AO HAD NOT DOUBTED SALES DECLARED BY THE ASSESSEE, A REASONABLE INFERENCE CAN BE DRAWN THAT THE ASSESSEE HAS PURCHA SED GOODS FROM THE GREY MARKET AND OBTAINED BILLS FROM THESE PARTIES TO COV ER UP THE PURCHASES. THEREFORE, UNDER THESE FACTS AND CIRCUMSTANCES, WHA T NEEDS TO BE TAXED IS ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES, BUT NOT THE ENTIRE PURCHASES FROM THESE PARTIES. 11. HAVING SAID SO, LET US EXAMINE WHAT IS REASONABLE P ROFIT IN CASE OF THESE TRANSACTIONS. VARIOUS COURTS AND TRIBUNALS UPHELD ESTIMATION OF NET PROFIT RANGING FROM 12.5% TO 25% DEPENDING UPON FACTS AND CIRCUMSTANCES OF EACH CASE. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAY PROTEINS LTD VS ACIT (1996) 58 ITD 428 (GUJ), UNDER SIMILAR SET OF FACTS , HAS UPHELD ESTIMATION OF NET PROFIT OF 15% ON BOGUS PURCHASES. NO UNIFORM YARDS TICKS COULD BE APPLIED TO ESTIMATE NET PROFIT BECAUSE VARIOUS OF VARIOUS NATU RE OF RISK INVOLVED IN VARIOUS TYPES OF BUSINESS. IN THIS CASE, THE ASSESSEE IS I NVOLVED IN SPECIALIZED BUSINESS OF PROVIDING LIFTING SOLUTIONS OF HEAVY EQUIPMENT F ROM THE GROUND LEVEL TO THE CRITICAL POINT OF ITS FINAL PLACEMENT WHICH REQUIRE S SPECIALIZED SKILLS AND KNOWLEDGE. THE ASSESSEE ALSO DECLARED A GROSS PROF IT OF 37% ON ITS GROSS 11 ITA 4557 & 4558/MUM/2015 RECEIPTS. KEEPING IN VIEW OVERALL FACTS AND CIRCUM STANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT A REASONABLE NET PROFIT OF 12.5% ON TOTAL BOGUS PURCHASES WOULD BE SUFFICIENT TO MEET THE ENDS OF J USTICE. HENCE, WE DIRECT THE AO TO ESTIMATE NET PROFIT OF 12.5% ON TOTAL PURCHAS ES MADE FROM THE ABOVE TWO PARTIES. 12. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR AY 2 009-10 IS PARTLY ALLOWED. 13. WITH REGARD TO THE OTHER APPEAL IN ITA NO.4558/MUM/ 2015 FOR AY 2010- 11, ALSO FILED BY THE REVENUE, WE FIND THAT THE FAC TS AND CIRCUMSTANCES OF THE ADDITION ARE AKIN TO ASSESSMENT YEAR 2009-10 EXCEPT FOR THE FIGURES, WHICH WE HAVE ALREADY DECIDED IN FOREGOING PARAGRAPHS. THER EFORE, CONSISTENT WITH THE DECISION ALREADY ARRIVED AT FOR AY 2008-09, WE DIRE CT THE AO TO ESTIMATE NET PROFIT OF 12.5% ON TOTAL PURCHASES MADE FROM THE AB OVE TWO PARTIES. 14. IN THE RESULT, APPEAL FOR AY 2010-11 IS ALSO PARTLY ALLOWED. 15. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVEN UE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JULY, 2017. SD/- SD/- (D.T. GARASIA) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 28 TH JULY, 2017 PK/- 12 ITA 4557 & 4558/MUM/2015 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI