MAFATLAL H. BOTHRA HUF, MUMBAI V. ITO 19(2)(3), MUMBAI

ITA 5364/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6279 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Question of law; Set aside
• Section: 143(3); 148

Judgement Text

P A G E | 1 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3) IN THE INCOME TAX APPELLATE TRIBUNAL S M C BENCH, MUMBAI BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NOS.5364 & 5365/MUM/2018 (ASSESSMENT YEARS: 2009 - 10 & 2010 - 11) MAFATLAL H. BOTHRA HUF C/O D.C. BOTHRA & CO. LLP (CA) (FORMERLY KNOWN AS D.C. BOTHRA & CO.) 297, TARDEO ROAD, WILLE MANSION, 1 ST FLOOR, OPP BANK OF INDIA, NANA CHOWK, MUMBAI 400007 VS. I.T.O - 19(2)(3) MATRU MANDIR, 2 ND FLOOR, TARDEO ROAD, MUMBAI - 400007 PAN AAAHB2007E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAJKUMAR SINGH, A.R RESPONDENT BY: SMT. JOTHILAKSHMI NAYAK, D.R DATE OF HEARING: 07.10.2019 D ATE OF PRONOUNCEMENT: 1 1 .10.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS PASSED BY THE CIT(A) - 29, MUMBAI, DATED 15.06.2018, WHICH IN TURN ARISES FROM THE RESPECTIVE ASSESSMENT ORDERS PASSED BY THE A.O UNDER SEC. 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT) FOR A.Y. 2009 - 10 AND A.Y. 2010 - 11, RESPECTIVELY. AS COMMON ISSUES ARE INVOLVED IN THE AFOREMENTIONED APPEALS, THEREFORE, THE SAME ARE BEING TAKEN UP AND DISPOSED OFF TOGETHER BY WAY OF A CONSOLIDATED ORDER. WE SHALL FIRST ADVERT TO THE APPEAL OF THE ASSESSEE FOR A.Y. 2009 - 10. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: 1. THAT ON FACTS OF THE CASE AND IN LAW THE ID. C.I.T.(APPEALS) HAS ERRED IN UPHOLDING THE VALIDITY OF THE REASSESSMENT PROCEEDING INITIATED U/S. 147 BY ISSUE OF NOTICE U/S. 148 ON WRONG FACTS AND IN UNLAWFUL MANNER. P A G E | 2 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3) 2. THAT THE ID. C.I.T.(APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.10,33,127/ - BEING 12.5% OF THE PURCHASES OF TRADING GOODS FROM THE ALLEGED SUSPICIOUS HAWALA DEALERS OF RS.82,65,015/ - WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND LAW. THAT BOTH THE APPEAL GROUNDS ARE INDEPENDENT GROUNDS & WITHOUT PREJUDICE TO EACH OTHER. THAT THE APPELLANT CRAVES THE LEAVE TO AMEND, ALTER, SUBSTITUTE AND OR TO RAISE NEW OR ADDITIONAL GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. BRIEFLY STATED, THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON - FERROUS METALS HAD FILED ITS RETURN OF INCOME FOR A.Y. 2009 - 10 ON 26.09.2009, DECLARING ITS TOTAL INCOME AT RS.9,95,012/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC.143(1) OF THE ACT. SUBSEQUENTLY, THE INCOME OF THE ASSESSEE WAS ASSESSED BY THE A.O UND ER SEC.143(3), VIDE HIS ORDER DATED 23.12.2011, THEREIN ACCEPTING THE RETURNED INCOME OF THE ASSESSEE. 3. ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF DGIT (INV.) WING, MUMBAI, THAT AS PER THE DETAILS RECEIVED FROM THE SALES TAX DEPARTMENT, THE ASSESSEE WAS FOUND TO BE ONE OF THE BENEFICIARY WHO HAD OBTAINED BOGUS PURCHASE BILLS FROM CERTAIN HAWALA PARTIES, ITS CASE WAS REOPENED UNDER SEC.147 OF THE ACT. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD CLAIMED TO HAVE MADE PURCHASES FROM THE FO LLOWING TWO TAINTED PARTIES: SR. NO. NAME OF THE PARTY F.Y. AMOUNT 1. ROMEX METAL & TUBES P. LTD. 2008 - 09 2,09,695 2. ANAND DEEP METAL 2008 - 09 80,55,320 TOTAL 82,65,015 IN ORDER TO VERIFY THE AUTHENTICITY OF THE AFORESAID PURCHASES TRANSACTIONS, THE A.O ISSUED NOTICES UNDER SEC.133(6) TO THE AFOREMENTIONED PARTIES, WHICH HOWEVER WERE RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARKS NOT KNOWN OR NO SUCH ADDRESS , LEFT ETC. IN THE BACKDROP OF THE AFORESAID FACTS, THE A.O DIRECTED THE ASSESSEE TO PRODUCE THE AFORESAID PARTIES ALONG WITH SUPPORTING DOCUMENTARY EVIDENCE. HOWEVER, THE ASSESSEE DESPITE SPECIFIC DIRECTIONS OF THE A.O FAILED TO PRODUCE THE PARTIES BEF ORE HIM. IN ORDER TO FORTIFY THE VERACITY OF THE PURCHASE TRANSACTIONS, THE A.O CALLED UPON THE ASSESSEE TO PLACE ON RECORD SUPPORTING DOCUMENTARY EVIDENCE, VIZ. PURCHASE BILLS, INVOICES/BILLS, COPIES OF LEDGER ACCOUNTS, DETAILS OF TRANSPORTATION OF GOODS, I.E LORRY RECEIPTS, DOCUMENTARY EVIDENCE REFLECTING RELEVANT ENTRIES OF P A G E | 3 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3) HAVING RECEIVED THE GOODS, AND ALSO, THE DETAILS AS REGARDS THE PAYMENTS MADE TO THE AFOREMENTIONED PARTIES ETC. IN REPLY, THE ASSESSEE FILED COPIES OF THE BANK STATEMENTS EVIDENCING THE FACT THAT THE PAYMENTS TO THE AFOREMENTIONED PARTIES WERE MADE THROUGH PROPER BANKING CHANNELS. ALSO, THE DETAILS OF PURCHASES MADE FROM THE AFOREMENTIONED PARTIES ALONG WITH QUANTITATIVE TALLY IN RESPECT OF THE ENTIRE PURCHASES AND THE CORRESPONDING S ALES WERE FURNISHED BY THE ASSESSEE. AS THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE DID NOT INSPIRE MUCH OF CONFIDENCE AS REGARDS THE AUTHENTICITY OF THE PURCHASE TRANSACTION S UNDER CONSIDERATION, THEREFORE, THE A.O CONCLUDED THAT THE ASSESSEE HAD NOT MADE ANY GENUINE PURCHASES FROM THE AFORESAID PARTIES. AT THE SAME TIME, TAKING COGNIZANCE OF THE FACT THAT THE SALES CORRESPONDING TO THE PURCHASES UNDER CONSIDERATION HAD BEEN A CCOUNTED FOR BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT, IT WAS CONCLUDED BY THE A.O THAT THE ADDITION IN THE HANDS OF THE ASSESSEE IN RESPECT OF SUCH UNSUBSTANTIATED PURCHASES WERE LIABLE TO BE RESTRICTED ONLY TO THE EXTENT OF THE PROFIT ELEMENT EMBEDDED IN MAKING OF SUCH PURCHASES . ACCORDINGLY, THE A.O DRAWING SUPPORT FROM THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT - 1 VS. SIMIT P. SHETH (2013) 356 ITR 451 (GUJ), THEREIN WORKED OUT THE PROFIT ELEMENT INVOLVED IN MAKING OF THE AFORESA ID PURCHASES @ 12.5% OF THE AGGREGATE VALUE OF PURCHASES OF RS.82,65,015/ - . ON THE BASIS OF HIS AFORESAID DELIBERATIONS, THE A.O CONFINED THE ADDITION IN THE HANDS OF THE ASSESSEE AT RS. 10,33,127/ - (12.5% OF RS.82,65,015/ - ). 4. AGGRIEVED, THE ASSESSEE CA RRIED THE MATTER IN APPEAL BEFORE THE CIT(A). HOWEVER, THE CIT(A) NOT FINDING FAVOUR WITH THE CONTENTION S ADVANCED BY THE ASSESSEE UPHELD THE VIEW TAKEN BY THE A.O AND DISMISSED THE APPEAL. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER PASSED BY THE CIT( A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. AT THE VERY OUTSET OF THE HEARING OF THE APPEAL, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE, THAT THE ADDITION AS REGARDS THE VALUE OF THE UNSUBSTANTIATED PURCHASE S CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES WAS LIABLE TO BE RESTRICTED TO THE EXTENT OF THE PROFIT RATE OF THE ASSESSEE , INSOFAR ITS REGULAR TRADING TRANSACTIONS WERE CONCERNED. IN SUPPORT OF ITS AFORESAID CONTENTION THE LD . A.R HAD RELIED ON THE ORDER OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF PR. CIT - 17 VS. M/S MOHHOMAD HAZI ADAM & CO. (ITA NO.1004 OF 2016, DATED 11.02.2019). ACCORDINGLY, IT WAS SUBMITTED BY THE LD. A.R , THAT THE ADDITION INSOFAR THE BOGUS/UNPROVED P A G E | 4 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3) PURCHASES WERE CONCERNED, THE SAME WAS LIABLE TO BE MADE TO THE EXTENT OF BRINGING THE GP RATE OF SUCH PURCHASES AT THE SAME RATE AS THAT OF THE OTHER GENUINE PURCHASES WHICH WERE BOOKED BY THE ASSESSEE IN ITS REGULAR BOOKS OF ACCOUNTS . 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SUBMITTED BY THE LD. D.R , THAT AS THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE AUTHENTICITY OF THE PURCHASE TRANSACTION S UNDER CONSIDERATION, THEREFO RE, THE A.O HAD IN ALL FAIRNESS, CONSIDERING THE FACT THAT THE CORRESPONDING PURCHASE WERE ALSO DULY ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE, HAD ALREADY RESTRICTED THE ADDITION TO THE EXTENT OF 12.5% OF THE AGGREGATE VALUE OF SUCH P URCHASES. IT WAS THUS AVERRED BY THE LD. D.R , THAT AS THE APPEAL FILED BY THE ASSESSEE WAS DEVOID AND BEREFT OF ANY MERIT , THEREFORE, THE SAME DID NOT MERIT ACCEPTANCE AND WAS LIABLE TO BE DISMISSED. 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD , AND ALSO THE JUDICIAL PRONOUNCEMENT S RELIED UPON BY THEM. ADMITTEDLY, THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE GENUI NENESS AND VERACITY OF THE PURCHASES WHICH WERE CLAIMED TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES. THE ONLY ISSUE WHICH HAS BEEN ASSAILED BY THE ASSESSEE BEFORE US IS AS REGARDS THE QUANTIFICATION OF THE PROFIT ELEMENT INVOLVED IN MAKING OF SUCH UN SUBSTANTIATED PURCHASES BY THE ASSESSEE FROM THE UNDISCLOSED SOURCES . INSOFAR THE QUANTIFICATION OF SUCH PROFIT ELEMENT IS CONCERNED, WE FIND , THAT THE HONBLE HIGH COURT OF BOMBAY IN ITS RECENT JUDGEMENT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX - 17 VS . M/S MOHHOMAD HAJI ADAM & COMPANY (ITA NO. 1004 OF 2016, DATED 11.02.2019) WHILE UPHOLDING THE ORDER OF THE TRIBUNAL, HAD OBSERVED, THAT THE ADDITION IN THE HANDS OF THE ASSESSEE AS REGARDS THE BOGUS/UNPROVED PURCHASES WAS TO BE MADE TO THE EXTENT OF BRIN GING THE G.P RATE OF SUCH PURCHASES AT THE SAME RATE AS THAT OF THE OTHER GENUINE PURCHASES. THE HONBLE HIGH COURT WHILE CONCLUDING AS HEREINABOVE, HAD OBSERVED AS UNDER: 8. IN THE PRESENT CASE, AS NOTED ABOVE, THE ASSESSEE WAS A TRADER OF FABRICS. THE AO FOUND THREE ENTITIES WHO WERE INDULGING IN BOGUS BILLING ACTIVITIES. A.O. FOUND THAT THE PURCHASES MADE BY THE ASSESSEE FROM THESE ENTITIES WERE BOGUS. THIS BEING A FINDING OF FACT, WE HAVE PROCEEDED ON SUCH BASIS. DESPITE THIS, T HE QUESTION ARISES WHETHER THE REVENUE IS CORRECT IN CONTENDING THAT THE ENTIRE PURCHASE AMOUNT SHOULD BE ADDED BY WAY OF ASSESSEE'S ADDITIONAL INCOME OR THE ASSESSEE IS CORRECT IN CONTENDING THAT SUCH LOGIC CANNOT BE APPLIED. THE FINDING OF THE CIT(A) AND THE TRIBUNAL WOULD SUGGEST THAT THE DEPARTMENT HAD NOT DISPUTED THE ASSESSEE'S SALES. THERE WAS NO DISCREPANCY P A G E | 5 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3) BETWEEN THE PURCHASES SHOWN BY THE ASSESSEE AND THE SALE DECLARED. THAT BEING THE POSITION, THE TRIBUNAL WAS CORRECT IN COMING TO THE CONCLUSION THAT THE PURCHASES CANNOT BE REJECTED WITHOUT DISTURBING THE SALES IN CASE OF A TRADE. THE TRIBUNAL, THEREFORE, CORRECTLY RESTRICTED THE ADDITIONS LIMITED TO THE EXTENT OF BRINGING THE G.P. RATE ON PURCHASES AT THE SAME RATE OF OTHER GENUINE PURCHASES. THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF N.K. INDUSTRIES LTD. (SUPRA) CANNOT BE APPLIED WITHOUT REFERENCE TO THE FACTS. IN FACT IN PARAGRAPH 8 OF THE SAME JUDGMENT THE COURT HELD AND OBSERVED AS UNDER - SO FAR AS THE QUESTION REGARDING ADDITI ON OF RS.3,70,78,125/ - AS GROSS PROFIT ON SALES OF RS.37.08 CRORES MADE BY THE ASSESSING OFFICER DESPITE THE FACT THAT THE SAID SALES HAD ADMITTEDLY BEEN RECORDED IN THE REGULAR BOOKS DURING FINANCIAL YEAR 1997 - 98 IS CONCERNED, WE ARE OF THE VIEW THAT THE ASSESSEE CANNOT BE PUNISHED SINCE SALE PRICE IS ACCEPTED BY THE REVENUE. THEREFORE, EVEN IF 6 % GROSS PROFIT IS TAKEN INTO ACCOUNT, THE CORRESPONDING COST PRICE IS REQUIRED TO BE DEDUCTED AND TAX CANNOT BE LEVIED ON THE SAME PRICE. WE HAVE TO REDUCE THE SE LLING PRICE ACCORDINGLY AS A RESULT OF WHICH PROFIT COMES TO 5.66%THEREFORE, CONSIDERING 5.66 % OF RS.3,70,78,1 25/ - WHICH COMES TO RS.20,98,62 1.88 WE THINK IT FIT TO DIRECT THE REVENUE TO ADD RS.20,98,621.88 AS GROSS PROFIT AND MAKE NECESSARY DEDUCTIONS A CCORDINGLY. ACCORDINGLY, THE SAID QUESTION IS ANSWERED PARTIALLY IN FAVOUR OF THE ASSESSEE AND PARTIALLY IN FAVOUR OF THE REVENUE. 9. IN THESE CIRCUMSTANCES, NO QUESTION OF LAW, THEREFORE, ARISES. ALL INCOME TAX APPEALS ARE DISMISSED, ACCORDINGLY. NO ORDER AT COSTS. ACCORDINGLY, THE HONBLE JURISDICTIONAL HIGH COURT HAD OBSERVED , THAT THE ADDITION IN RESPECT OF PURCHASES WHICH WERE FOUND TO BE BOGUS IN THE CASE OF THE ASSESSEE BEFORE THEM , WHO WAS A TRADER, WAS TO BE WORKED OUT BY BRINGING THE G.P. RATE OF SUCH BOGUS PURCHASES AT THE SAME RATE OF OTHER GENUINE PURCHASES. WE THUS RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT OF THE HONBLE HIGH COURT , DIRECT THE A.O TO RESTRICT THE ADDITION INSOFAR THE BOGUS/UNPROVED PURCHASES AGGREGATING TO RS.82,65,015/ - IN THE CASE BEFORE US ARE CONCERNED, BY BRINGING THE G.P. RATE ON THE AMOUNT OF SUCH BOGUS PURCHASES AT THE SAME RATE AS THAT OF ITS OTHER GENUINE PURCHASES. NEEDLESS TO SAY, THE ASSESSEE IN THE COURSE OF THE SET ASIDE PROCEEDINGS SHALL FURNISH THE REQUISITE DETAILS BEFORE THE A.O , WHO SHALL AFTER MAKING NECESSARY VERIFICATIONS RESTRICT THE ADDITIONS IN TERMS OF OUR AFORESAID OBSERVATIONS. THE ORDER PASSED BY THE CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE A.O TO GIVE EFFECT TO OUR AFORESAID DIRECTIONS. 8. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.5365/MUM/2018 A.Y.2010 - 11 9. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y. 2010 - 11. THE ASSESSEE HAS ASSAILED THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: P A G E | 6 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3) 1. THAT ON FACTS OF THE CASE AND IN LAW THE ID. C.I.T.(APPEALS) HAS ERRED IN UPHOLDING THE VA LIDITY OF THE REASSESSMENT PROCEEDING INITIATED U/S. 147 BY ISSUE OF NOTICE U/S. 148 ON WRONG FACTS AND IN UNLAWFUL MANNER. 2. THAT THE ID. C.I.T.(APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 1,54,791/ - BEING 12.5% OF THE PURCHASES OF TRADING GOO DS FROM THE ALLEGED SUSPICIOUS HAWALA DEALERS OF RS. 12,38,328/ - WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND LAW. THAT BOTH THE APPEAL GROUNDS ARE INDEPENDENT GROUNDS & WITHOUT PREJUDICE TO EACH OTHER. THAT THE APPELLANT CRAVES THE LEAVE TO AMEND, ALTER, SUBSTITUTE AND OR TO RAISE NEW OR ADDITIONAL GROUNDS OF APPEAL AT THE TIME OF HEARING. 10. BRIEFLY STATED, THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR A.Y. 2010 - 11 ON 10.09.2010, DECLARING ITS TOT AL INCOME AT RS.5,88,953/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC.143(1) OF THE ACT. ON THE BASIS OF INFORMATION RECEIVED BY THE A.O FROM THE OFFICE OF THE DGIT(INV.), MUMBAI , THAT THE ASSESSEE AS A BENEFICIARY HAD OBTA INED ACCOMMODATION PURCHASE BILLS FROM CERTAIN HAWALA PARTIES, ITS CASE WAS REOPENED UNDER SEC.147 OF THE ACT. 11. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS , IT WAS OBSERVED BY THE A.O , THAT THE ASSESSEE HAD CLAIMED TO HAVE MADE PURCHASES OF RS.12,38,32 8/ - FROM A TA INTED PARTY VIZ. M/S ANAND DEEP METALS. AS THE ASSESSEE COULD NOT SUBSTANTIATE THE AUTHENTICITY OF THE PURCHASE TRANSACTIONS TO THE SATISFACTION OF THE A.O, THEREFORE, IT WAS CONCLUDED BY HIM THAT THE ASSESSEE HAD NOT MADE ANY GENUINE PURCHASE S FROM THE AFOREMENTIONED PARTY . AT THE SAME TIME, TAK I NG COGNIZANCE OF THE FACT , THAT THE SALES CORRESPONDING TO THE SAID PURCHASES HAD BEEN ACCOUNTED FOR BY THE ASSESSEE IN ITS REGULAR BOOKS OF ACCOUNTS, THEREFORE, THE A.O CONFINED THE ADDITION TO 12.5% OF THE AGGREGATE VALUE OF PURCHASES OF RS.12,38,328/ - ( I.E THE PROFIT ELEMENT INVOLVED IN MAKING OF THE AFORESAID PURCHASES FROM THE OPEN/GREY MARKET ) . ON THE BASIS OF HIS AFORESAID DELIBERATIONS, THE A.O RESTRICTED THE ADDITION TO THE EXTENT OF R S.1,54,791/ - (12.5% OF RS.12,38,328/ - ). 12. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) . HOWEVER, THE CIT(A) NOT FINDING FAVOUR WITH THE CONTENTIONS ADVANCED BY THE ASSESSEE DISMISSED THE APPEAL. 13. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT AS THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL REMAIN THE SAME AS WERE THERE BEFORE US IN THE APPEAL OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING P A G E | 7 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3) YEAR I.E A. Y. 2009 - 10 IN ITA NO.5364/MUM/2018, THEREFORE, OUR ORDER THEREIN PASSED WOULD APPLY MUTATIS MUTANDIS FOR THE DISPOSAL OF THE PRESENT APPEAL OF THE ASSESSEE FOR A.Y. 2010 - 11. ACCORDINGLY, ON THE BASIS OF OUR AFORESAID OBSERVATIONS RECORDED WHILE DISPOSING O FF THE APPEAL OF THE ASSESSEE FOR A.Y. 2009 - 10, THE A.O ON THE SAME TERMS IS DIRECTED TO RESTRICT THE ADDITIONS INSOFAR THE BOGUS/UNPROVED PURCHASES OF RS.12,38,328/ - IN THE CASE BEFORE US ARE CONCERNED , BY BRINGING THE G.P RATE ON THE AMOUNT OF SUCH BOGUS PURCHASES AT THE SAME RATE AS THAT OF ITS OTHER GENUINE PURCHASES. 14. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. 15. THE APPEALS OF THE ASSESSEE FOR A.Y.2009 - 10 IN ITA NO.5364/MUM/2018 AND A.Y. 2010 - 11 IN ITA NO.5365/MUM/2018 ARE ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PR ONOUNCED IN THE OPEN COURT ON 11 . 10.2019 SD/ - SD/ - ( N.K. PRADHAN ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 11 .10 .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 | 8 ITA NOS. 5364 & 5365/MUM/2018 AYS.2009 - 10 & 2010 - 11 MAFATLAL H. BOTHRA HUF VS. I.T.O - 19(2)(3)