DCIT CIR. 13(1)(2), MUMBAI V. P-CUBE CONSTRUCTION PVT. LTD., MUMBAI

ITA 4787/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4988 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 06-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S ABI RAMA KARTHIKEYAN
• Assessee Lawyers: SHAILESH B SHETHIA
• Keywords: Bogus purchase
• Section: 133(6); 37(1); 143(1)

Judgement Text

P A G E | 1 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 4787/MUM/2017 (ASSESSMENT YEAR: 2011 - 12 ) DEPUTY COMMISSIONER OF INCOME TAX - 13(1)(2) 2 ND FLOOR, ROOM NO. 218, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 VS. M/S P. CUBE CONSTRUCTION PVT. LTD. 1/A/101, UMIYA NAGAR, VISHESHWAR NAGAR ROAD, OFF AAREY RD, GOREGAON (EAST), MUMBAI - 400 063 PAN AADCP9320N ( APPELLANT ) ( RESPONDENT ) APPELLANT BY: SHRI S. ABI RAMA KARTHIKEYAN, D.R RESPONDENT BY: SHRI SHAILESH B. SHETHIA, A.R DATE OF HEARING: 2 7 .12.2018 DA TE OF PRONOUNCEMENT: 25.01 .2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 21, MUMBAI DATED 17.04.2017, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC.143(3) R.W.S 147 OF THE INCOME TAX, 1961 (FOR SHORT I.T. ACT), DATED 1 2.03.2016 FOR A.Y. 2011 - 12. THE REVENUE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS .83,98,884/ - TO RS. 10,49,860/ - WHICH IS 12.5 PERCENTAGE OF TRANSACTION MADE ON ACCOUNT OF NON - GENUINE PURCHASE, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS RELIED ON CHART SHOWING CONSUMPTION PATTERN, BUT THE ASSESSEE HAS NOT BEEN ABLE TO CO - RELATE WITH DOCUMENTARY EVIDENCES AS TO HOW THE ALLEGED PURCHASES HAVE BEEN USED IN THE MANUFACTURING OF THE MATERIALS. 2. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN RESTRICTING THE ADDITION TO 12.5 PERCENTAGE OF THE ALLEGED PURCHASES WITHOUT APPRECIATING THE FACT P A G E | 2 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE WITH DOCUMENTARY EVIDENCES AS TO HOW THE SO CALLED GOODS, BOOKED IN THE NAMES OF IMPUGNED PA RTIES, WERE RECEIVED AND THEIR MOVEMENT IN THE BOOKS, I.E. FROM WHERE THESE ENTERED ASSESSEE'S PREMISES AND WERE SUBSEQUENTLY USED IN THE MANUFACTURING PROCESS. 3. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) FAILED TO APPRECIATE THAT AS PER THE SALES TAX (VAT) DEPARTMENT , STATE OF MAHARASHTRA THE PARTY VIZ . M/S. ANKIT ENTERPRISES, M.R. CORPORATION, SAVITA INTERNATIONAL , DIVINE ENTERPRISES, PARAS ENTERPRISES AND SHAPE CORPORATION WHICH IS LISTED AS ONE OF THE HAWALA DEALERS WHO HAVE NOT SUPPLIED THE GOODS BUT MERELY ISSUED THE BILLS/INVOICES TO VARIOUS PARTIES, HAS ADMITTED BEFORE SALES TAX DEPARTMENT THAT THE Y HAVE ISSUED ACCOMMODATION BILLS ONLY, AND NO GENUINE GOODS HAVE BEEN SUPPLIED TO ANY BUYER/PURCHASER. 4. W HETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) FAILED TO APPRECIATE THAT THE ADDRESS APPEARING ON THE TAX INVOICE IS NOT CORRECT AS THE ENVELOPE CONTAINING NOTICE U/S. 133(6) ISSUED TO THE PARTIES, IS RETURNED BACK AND THE LD.CIT(A) HAS ERRED IN NOT APPRECIATING THE INVESTIGATION DONE BY A.O & INSPECTOR OF THIS CHARGE. 5. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ALL OR ANY OF THE GROUNDS OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF A D EVELOPER, B UILDER AND CIVIL CONTRACTOR HAD E - FILED ITS RETURN OF INCOME FOR A.Y. 2011 - 12 O N 15.09.2011 , DECLARING TOTAL INCOME AT RS.66,88,480/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE I.T. ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED BY THE A.O FROM THE INVESTIGATION WING THAT THE A SSESSEE HAD DURING THE YEAR UNDER CONSIDERATION INDULGED IN THE PRACTISE OF TAKING BOGUS PURCHASE BILLS AND ROUTING THE SAME THROUGH ITS BOOKS OF ACCOUNTS, THE CASE OF THE ASSESSEE WAS REOPENED AND A NOTICE UNDER SEC. 148, DATED 18.03.2015 WAS SERVED UPON IT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT AS PER THE INFORMATION RECEIVED FROM THE INVESTIGATION WING THE ASSESSEE HAD DURING THE YEAR UNDER CONSIDERATION PROCURED BOGUS PURCHASE BILLS AGGREGATING TO RS.83,98,8 84/ - FROM THE FOLLOWING CONCERN S : SR. NO. NAME OF THE PARTY AMOUNT OF PURCHASES (RS.) 1. ANKIT ENTERPRISES 5,02,031 P A G E | 3 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. 2. M.R. CORPORATION 2,52,000 3. SAVITA INTERNATIONAL 3,72,750 4. DEVINE ENTERPRISE 21,26,075 5. PARAS ENTERPRISE 20,75,699 6. SHAPE CORPORATION 30,70,329 TOTAL 83,98,884 IN ORDER TO FORTIFY THE GENUINENESS AND VERACITY OF THE PURCHASES CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES THE A.O ISSUED NOTICE S UNDER SEC.133(6) TO THE AFOREMENTIONED PARTIES. HOWEVER, ALL OF THE NOTICE S WERE RETURNED UNSERVED BY THE POSTAL AUTHORITIES. THE A.O BROUGHT THE AFORESAID FACTS TO THE NOTICE OF THE ASSESSEE AND CALLED UPON IT TO PRODUCE THE AFOREMENTIONED PARTIES FOR EX AMINATION BEFORE HIM. APART THEREFROM , THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO WHY THE PURCHASES BOOKED IN THE NAME OF THE AFOREMENTIONED BOGUS PARTIES MAY NOT BE DISALLOWED . THE ASSESSEE IN ORDER TO FORTIFY THE GENUINENESS OF THE PURCHASES CLAIMED T O HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES THOUGH PLACED ON RECORD THE COPIES OF THE INVOICES, BUT FAILED TO PRODUCE THE PARTIES BEFORE THE A.O. THE A.O AFTER DELIBERATING ON THE MATERIAL FURNISHED BY THE ASSESSEE WAS HOWEVER NOT PERSUADED TO SUBSCRI BE TO THE GENUINENESS OF THE PURCHASES WHICH WERE CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. OBSERVING, THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS AS REGARDS PROVING THE AUTHENTICITY OF THE PURCHASE TRANSACTIONS UNDE R CONSIDERATION ON THE BASIS OF IRREFUTABLE DOCUMENTARY EVIDENCE , THE A.O DISALLOWED THE ENTIRE VALUE OF PURCHASES OF RS. 83,98,884/ - CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES UNDER SEC. 37(1) OF THE I.T. ACT. 4 . AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). DURING THE COURSE OF THE APPELLATE PROCEEDINGS T HOUGH THE CIT(A) AFFORD ED AN OTHER OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE AFOREMENTIONED PARTIES FOR VERIFYING THE VERACITY OF THE PU RCHASE TRANSACTIONS, HOWEVER, THE ASSESSEE FAILED TO DO THE NEEDFUL. THE ASSESSEE IN ORDER TO SUBSTANTIATE THE GENUINENESS OF THE PURCHASE TRANSACTIONS PLACED ON RECORD THE COPIES OF THE P A G E | 4 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. INVOICES. IT WAS FURTHER THE CLAIM OF THE ASSESSEE THAT IT HAD PRODUC ED THE COPIES OF INVOICES, BANK STATEMENTS AND THE STOCK DETAILS IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE ASSESSEE FURTHER ASSAILED THE ACTION OF THE A.O IN DRAWING ADVERSE INFERENCES IN ITS HANDS ON THE GROUND THAT THE STATEMENTS OF THE AFOREMENTI ONED PARTIES RECORDED BY THE SALE S TAX AUTHORIT IES WERE NOT PROVIDED TO IT. THE ASSESSEE FURTHER SUBMITTED BEFORE THE CIT(A) THAT MERELY BECAUSE THE AFORESAID SUPPLIER PARTIES WHICH HAD COLLECTED MVAT AS PER THE INVOICES RAISED BY THEM ON THE ASSESSEE HAD THEREAFTER NOTE DEPOSIT ED THE SAME WITH THE STATE GOVERNMENT , THE GENUINE NESS OF THE PURCHASES MADE BY THE ASSESSEE FROM THEM COULD NOT BE DISLODGED . THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS ADVANCED BY THE ASSESSEE OBSERVED THAT THE A.O HAD IGNORE D ALL THE DOCUMENTARY EVIDENCES WHICH WERE FILED BY THE ASSESSEE WITH HIM IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE CIT(A) THOUGH OBSERVED THAT IT WAS AN ADMITTED FACT THAT THE NOTICES ISSUED BY THE A.O UNDER SEC.133(6) WERE RETURNED UNSERVED BY THE POSTAL AUTHORITIES, HOWEVER KEEPING IN VIEW THE FACT THAT THE ASSESSEE HAD PLACED ON RECORD THE PURCHASE BILLS, DELIVERY CHALLANS, TRANSPORTATION BILLS AS WELL AS DEMONSTRATED THAT THE PAYMENT S TOWARDS THE PURCHASE CONSIDERATION TO THE AFOREMENTIONED SUPP LIER PARTIES WERE MADE THROUGH ACCOUNT PAYEE CHEQUES , THE GENUINENESS OF THE CLAIM OF THE ASSESSEE COULD NOT HAVE BEEN SUMMARILY DISLODGED BY THE A.O . THE CIT(A) HELD A CONVICTION THAT UNLESS THE EVIDENCE PRODUCED BY THE ASSESSEE WAS PROVED TO BE BOGUS, FA LSE OR UNRELIABLE, NO ADDITION WAS LIABLE TO BE MADE IN ITS HANDS. ON THE BASIS OF HIS AFORESAID DELIBERATIONS IT WAS OBSERVED BY HIM THAT IT WAS OBLIGATORY ON THE PART OF THE A.O TO HAVE LOOKED INTO THE ENTIRE FACTS AND CIRCUMSTANCES IN THE BACKDROP OF TH E EVIDENCE WHICH WAS PLACED ON RECORD BY THE ASSESSEE , AND SHOULD NOT HAVE CONFINED HIMSELF TO THE DIRECT TESTIMONY I.E THE STATEMENTS OF THE SUPPLIER PARTIES RECORDED BY THE SALES TAX AUTHORITIES. HOWEVER, THE CIT(A) WAS OF THE VIEW THAT AS THE ASSESSEE HAD NEITHER PRODUCED THE AFOREMENTIONED PARTIES NOR PRODUCE D THEIR BANK STATEMENTS, THUS THERE WAS NO OCCASION FOR THE REVENUE TO HAVE VERIFIED THE GENUINENESS OF THE PURCHASE TRANSACTIONS IN THE ABSENCE OF THE CASH TRAIL. IN SUM AND SUBSTANCE, IT WAS OBSE RVED BY THE CIT(A) THAT ASSESSEE HAD FAILED P A G E | 5 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. TO DISCHARGE THE ONUS AS REGARDS ESTABLISHING THE AUTHENTICITY OF THE PURCHASE TRANSACTIONS UNDER CONSIDERATION. INSOFAR, THE DOCUMENTARY EVIDENCE THAT W AS PLACED ON RECORD BY THE ASSESSEE VIZ. (I) BOOKS OF ACCOUNT; (II) PURCHASE BILLS/CHALLANS; (III) LEDGER ACCOUNT S ; AND (IV) ITS OWN BANK STATEMENTS EVIDENCING MAKING OF THE PAYMENT S TO THE AFOREMENTIONED PARTIES THROUGH CHEQUES , THE SAME DID NOT FIND FAVOUR WITH THE CIT(A) . RATHER, IT WAS OBSERVED BY HIM THA T THE ASSESSEE HAD FAILED TO ESTABLISH THE GENUINENESS OF THE PURCHASE TRANSACTIONS ON THE BASIS OF CLINCHING DOCUMENTARY EVIDENCE. HOWEVER, THE CIT(A) WAS ALSO OF THE VIEW THAT AS THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAD NOT BEEN DISPUTED, PURCHASES HA D NOT BEEN CONCLUSIVELY PROVED AS BOGUS AND THE PAYMENTS MADE BY THE ASSESSEE TO THE AFOREMENTIONED SUPPLIER PARTIES ALSO NOT HAVE BEEN SHOWN TO HAVE BEEN RECEIVED BACK IN CASH BY THE ASSESSEE, THUS THE CLAIM OF THE ASSESSEE OF HAVING PURCHASE D THE GOODS UNDER CONSIDERATION COULD NOT BE DISLODGED. IN TOTALITY OF THE FACTS OF THE CASE, IT WAS OBSERVED BY HIM THAT THE ADDITION IN THE HANDS OF THE ASSESSEE WAS LIABLE TO BE RESTRICTED ONLY TO THE EXTENT OF THE PROFIT ELEMENT EMBEDDED IN THE PURCHASES WHICH WER E CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. THE CIT(A) WHILE CONCLUDING AS HEREINABOVE R ELIED ON THE JUDGMENT S OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. BHOLANATH POLYFAB PVT. LTD. (2013) 355 ITR 290 (GUJ) AND CIT VS. SIMIT P. SHETH (2013) 219 TAXMAN 85 (GUJ). ON THE BASIS OF HIS AFORESAID DELIBERATIONS , THE CIT( A ) AFTER TAKING COGNIZANCE OF THE FINANCIAL RESULTS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND THAT OF THE IMMEDIATELY PRECEDING YEAR VIZ . A.Y. 2010 - 11 , OBSERVED THAT THE NET PROFIT OF THE ASSESSEE WAS THOUGH LOWER THAN 8% AS PER THE PREVAILING NORMS IN CIVIL CONSTRUCTION BUSINESS, HOWEVER, THE SAME IN COMPARISON TO THE IMMEDIATELY PRECEDING YEAR S REVEALED AN INCREASING TREND. THE CIT(A) OB SERV ED THAT THE ASSESSEE HAD PURCHASED STEEL BARS WHICH WERE USED IN CONSTRUCTION FROM THE AFOREMENTIONED PARTIES. IT WAS FURTHER OBSERVED BY HIM THAT THE VAT APPLICABLE ON STEEL BARS WAS 4% AND ON ALUMINIUM SECTION THE SAME WAS 5%. IT WAS THUS OBSERVED BY THE CIT(A) THAT THE ASSESSEE HAD PURCHASED THE MATERIAL UNDER CONSIDERATION, THOUGH NOT FROM THE AFOREMENTIONED PARTIES , BUT FROM THE UNDISCLOSED PARTIES P A G E | 6 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. OPERATING IN THE OPEN/GREY MARKET . ON THE BASIS OF HIS AFORESAID OBSERVATIONS THE CIT(A) CONCLUDED THAT THE ASSESSEE BY MAKING SUCH PURCHASES FROM THE OPEN/GREY MARKET WOULD HAVE BENEFITTED BY WAY OF SAVING OF VAT ETC. FURTHER, TAKING SUPPORT OF THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF SIMIT P. SHETH ( S UPRA) HE ESTIMATE D THE PROFIT EMBEDDED IN THE PURCHASES UNDER CONSIDERATION AT 12.5% OF THE VALUE OF SUCH PURCHASES AND RESULTANTLY RESTRICTED THE ADDITION TO THE EXTENT OF RS.10,49,860/ - ( I.E 12.5% OF RS.83,98,884/ - ). 5. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE C IT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT THE CIT(A) HAD ERRED IN RESTRICTING THE ADDITION MADE BY THE A.O ONLY TO THE EXTENT OF 12.5% OF THE VALUE OF THE BOGUS PURCHASES . PER CON TRA, THE LD. AUTHORIZED REPRESENTATIVE RELIED ON THE ORDERS OF THE CIT(A). 6. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT STANDS CONCLU SIVELY PROVED THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE AUTHENTICITY OF THE PURCHASES WHICH WERE CLAIMED TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. IN OUR CONSIDERED VIEW , THE LOWER AUTHORITIES HA D RIGHTLY CONCLUDED THAT AS THE ASSESSEE HAD FAILED TO PLACE ON RECORD THE REQUISITE DOCUMENTARY EVIDENCE WHICH WOULD HAVE IRREFUTABLY PROVED THE AUTHENTICITY OF THE PURCHASE TRANSACTIONS UNDER CONSIDERATION, THEREFORE, THE ONUS CAST UPON IT HAD NOT BEEN DISCHARGED. WE FIND THAT THE ASSESSEE HAD NOT ONLY FAILED TO SUBSTANTIATE THE VERACITY OF THE PURCHASES BY PLACING ON RECORD CLINCHING DOCUMENTARY EVIDENCE, BUT DESPITE HAVING BEEN AFFORDED AN OTHER OPPORTUNITY BY THE CIT(A) TO PRODUCE THE AFOREMENTIONED PARTIES BEFORE HIM , HAD FAILED TO DO THE NEEDF UL. BE THAT AS IT MAY, WE FIND OURSELVES TO BE IN AGREEMENT WITH THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE PURCHASE TRANSACTIONS UNDER CONSIDERATION. HOWEVER, AT THE SAME TIME WE FIND OURSELVES T O BE IN AGREEMENT WITH THE VIEW TAKEN BY THE CIT(A) THAT NOW WHEN THE BOOKS OF ACCOUNT S OF THE ASSESSEE HAD NOT BEEN DISPUTED, P A G E | 7 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. PURCHASE S OF THE GOODS HAD NOT BEEN PROVED AS BOGUS AND THE PAYMENTS MADE BY THE ASSESSEE TOWARDS PURCHASE CONSIDERATION TO THE A FOREMENTIONED PARTIES HAD ALSO NOT BEEN SHOWN TO HAVE FOUND ITS WAY BACK TO THE POCKET OF THE ASSESSEE, THEREFORE, THE FACT THAT THE ASSESSEE HAD PURCHASED THE GOODS UNDER CONSIDERATION STANDS PROVED . INSOFAR , THE CONTENTION OF THE REVENUE THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT THE PURCHASES HAD BEEN CONSUMED IN ITS BUSINESS OF A CIVIL CONSTRUCTION BUSINESS, THE SAME IN OUR CONSIDERED VIEW CANNOT BE ACCEPTED. WE FIND THAT THE ASSESSEE HAD PURCHASED STEEL BARS WHICH ARE USED IN CONSTR UCTION FROM THE AFOREMENTIONED PARTIES. THE FINANCIAL RESULTS OF THE ASSESSEE AS HAD BEEN DELIBERATED UPON BY THE CIT(A) DO NOT REVEAL ANY ABNORMAL FLUCTUATIONS DURING THE YEAR UNDER CONSIDERATION , AS AGAINST THAT OF THE IMMEDIATELY PRECEDING YEAR VIZ. A.Y . 2010 - 11 . RATHER, THE CIT(A) HAD OBSERVED THAT THE NET PROFIT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION REVEALED AN INCREASING TREND. WE ARE OF THE CONSIDERED VIEW THAT THE VERY FACT THAT THE PROFIT ELEMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSID ERATION HAD REMAIN ED IN CONFORMITY WITH THAT OF THE IMMEDIATELY PRECEDING YEAR , IN ITSELF PROVE S THAT THE GOODS UNDER CONSIDERATION HAD ACTUALLY BEEN PURCHASED AND CONSUMED BY THE ASSESSEE IN ITS CIVIL CONSTRUCTION BUSINESS. STILL FURTHER, IT IS A MATTER O F FACT THAT NO MATERIAL HAD BEEN PLACED ON RECORD EITHER BY THE A.O OR BY THE LD. D.R BEFORE US WHICH COULD PERSUADE US TO CONCLUDE THAT THE ASSESSEE HAD MERELY BOOKED BOGUS PURCHASES AND WAS NOT IN RECEIPT OF ANY ACTUAL MATERIAL . WE ARE OF A STRONG CONVIC TION THAT KEEPING IN VIEW THE FACT THAT THE FINANCIAL RESULTS OF THE ASSESSEE REMAINS IN PARITY WITH THAT OF THE IMMEDIATELY PRECEDING YEAR VIZ. A.Y. 2010 - 11, THUS IT COULD SAFELY BE CONCLUDED THAT THE PURCHASES UNDER CONSIDERATION DEBITED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS WERE CONSUMED IN ITS CIVIL CONSTRUCTION BUSINESS. 7. WE HAVE PERUSED THE ORDER OF THE CIT(A) , AND ARE PERSUADED TO SUBSCRIBE TO HIS VIEW THAT IN TOTALITY OF THE FACTS OF THE CASE IT COULD SAFELY BE CONCLUDED THAT THE ASSESSEE HAD MADE THE PURCHASES OF THE GOODS, THOUGH NOT FROM THE AFOREMENTIONED PARTIES, BUT FROM THE OPEN/GREY MARKET. INSOFAR, THE ESTIMATION OF THE PROFIT ELEMENT EMBEDDED IN MAKING OF SUCH P A G E | 8 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD. PURCHASES FROM THE OPEN/GREY MARKET, WE FIND THAT THE SAME HAD RIGHTLY BEEN ADOPTED BY THE CIT(A) AT 12.5% BY RELYING ON THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. SIMIT P. SHETH (2013) 219 TAXMAN 85 (GUJ). WE THUS NOT FINDING ANY INFIRMITY IN THE ORDER OF THE CIT(A) , UPHOLD THE SAME. 8. THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRON OUNCED IN THE OPEN COURT ON 25.01 .20 19 SD/ - SD/ - ( SHAMIM YAHYA ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 25 .01 .2019 PS. ROHIT / 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 | 9 ITA NO.4787/MUM/2017 A.Y. 2011 - 12 DY. COMMISSIONER OF INCOME TAX - 13(1)(2) VS. M/S P. CUBE CONSTRUCTION PVT. LTD.