Appeal Details
Counselvise Citation
[2017] 126 COUNSELVISE.COM (IT) 8437 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
10-11-2017
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
Not Allotted
Assessment Year
2009-2010
Appeal Filed On
13-12-2016
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL K , BENCH, MUMBAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO. 7345 / MUM/ 201 6 ( / ASSESSMENT YEAR: 2009 - 10 ) THE DCIT 10(2)(2), ROOM NO. 209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S MINEX METALLURGICAL COMPANY LIMITED, 301, RAJGURU APARTMENTS, NEW NAGARDAS ROAD, ANDHERI (EAST), MUMBAI - 400069 ./ ./ PAN/GIR NO. : AAACM 7315 B ( / APPELLANT ) .. ( / RESPONDENT ) ./ ITA NO. 7346 / MUM / 201 6 ( / ASSESSMENT YEAR: 2010 - 11 ) THE DCIT 10(2)(2), ROOM NO. 216A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S MINEX METALLURGICAL COMPANY LIMITED, 301, RAJGURU APARTMENTS, NEW NAGARDAS ROAD, ANDHERI (EAST), MUMBAI - 4 00069 ./ ./ PAN/GIR NO. : AAACM 7315 B ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI V. JENARDHANAN (DR) / ASSESSEE BY : SHRI PARESH SHAPARIA (AR) DATE OF HEARING: 17/08/2017 DATE OF PRONOUNCEMENT: 10 /11/2017 / O R D E R PER RAM LAL NEGI, JM THESE APPEAL S HAVE BEE N FIL ED BY THE REVENUE AGAINST THE ORDER S DATED 23/09/2016 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 17 , MUMBAI , FOR THE ASSESSMENT YEAR S 2009 - 10 AND 2010 - 11 RESPECTIVELY , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL S FILED BY THE ASSESSEE AGAINST 2 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 ASSESSMENT ORDER S PASSED U/ S 143 (3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). SINCE, BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE, THE SE WERE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE. ITA NO. 7345 /MUM/2016 (ASSESSMENT YEAR: 2009 - 20 10 ) 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF MAN UFACTURING FERRO ALLOYS AND CORED WIRES , FILED ITS RETURN OF INCOME FOR THE A.Y. 2009 - 1 0 DECLARING THE TOTAL INCOME OF RS. 15,56,71,558/ - . THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 16,42,04,280/ - . SUBSEQUENTLY, INFORMATION WAS RECEIVED FROM THAT T HE INVESTIGATION WING OF THE DEPARTMENT TO THE EFFECT THAT ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES TO FROM HAWALA DEALERS FOR SHOWING PURCHASES OF RS. 1,08,50,022/ - IN THE BOOKS OF ACCOUNT . ACCORDINGLY, THE ASSESSMENT WAS REOPENED U/S 147 . N OTICE U/ S 148 WAS ISSUED AFTER RECORDING REASONS FOR REOPENING OF THE ASSESSMENT. 3. IN RESPONSE TO NOTICE U/S 148, THE ASSESSEE MADE WRITTEN SUBMISSIONS AND STATED THAT THE RETURN FILED U/S 139(1) MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO SECTION 148 OF THE ACT. AS PER THE INFORMATION RECEIVED , THE ASSESSEE HAD OBTAINED ACCOMMODATION ENTRIES FROM FOUR ENTITIES, WHOSE NAME APPEARED IN THE LIST OF HAWALA DEALERS IDENTIFIED BY THE SALES TAX DEPARTMENT. DURING THE CO URSE OF RE ASSESSMENT PROCEEDINGS , THE AS SESSEE WAS ASKED TO SUBMIT LED G ER ACCOUNT OF THE PARTIES CONCERN ED ALONG WITH THE COPIES OF BILL / INVOICES RAISED, PROOF OF DELIVERY OF GOODS WITH COMPLETE TRANSPORTATION DETAILS/ RENDERING OF SERVICES, BANK STATEMENTS AND OTHER DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE PARTIES FOR VERIFICATION . IN RESPONSE THEREOF THE ASSESSEE SUBMITTED THAT ALL THESE PURCHASES ARE GENUINE AND MADE IN THE NORMAL COURSE 3 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 OF BUSINESS AND FURTHER F URNISHED THE CO PIES OF LEDGERS, BILLS, GOODS ARRIVAL NOTES AND LO RRY RECEIPTS ETC. THE ASSESSEE, HOWEVER, EXPRESSED ITS INABILITY TO PRODUCE THE PARTIES. IN ORDER TO VERIFY THE GENUINENESS THE PURPOSES, THE AO ISSUED NOTICES U/S 133(6) ASKING THE PARTIES TO SUBMIT REQUIS ITE DETAILS IN SUPPORT OF THE PURCHASES ALLEGEDLY MADE BY THE ASSESSEE. HOWEVER, THE NOTICES WERE RECEIVED BACK UN - SERVED WITH THE REMARKS NOT KNOWN IN TWO CASES AND RECEIVED NO REPLY IN RESPECT OF REMAINING TWO PARTIES. ACCORDINGLY, THE AO RELYING ON T HE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN SUMATI DAYAL VS.CIT 214 ITR 801 AND CIT VS. DURGA PRASAD MORE 82 ITR 540 (SC) , MADE ADDITION OF THE TOTAL AMOUNT OF BOGUS PURCHASES TO THE TUNE OF RS. 1,08,50,022/ - , G ROSS P ROFIT ON BOGUS PURCHASES @ 4% AMOU NTING TO RS. 4,34,000/ - AND COMMISSION PAID FOR ARRANG ING BOGUS PURCHASES @ 1% AMOUNTING TO RS. 1,08,500/ - AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 17,55,96,810/ - (ROUNDED OFF). 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED THE FIRST APPEAL BEFORE THE LD. CIT (A) AGAINST THE ASSESSMENT ORDER. THE LD. CIT (A) AFTER HEARING THE ASSESSEE DELETED THE ADDITION OF RS. 1,08,50,022/ - HOLDING THAT SINCE THE SALES ARE NOT UNDER DISPUTE THE TOTAL AMOUNT OF PURCHASE CANNOT BE TREATED A S BOGUS. HOWEVER , TO SAFEGUARD IN THE INTEREST OF THE REVENUE, RESTRICT THE ADDITION TO EXTENT OF 2% OF ALLEGED OF BOGUS PURCHASES AS AGAINST 4% MADE BY THE AO . SIMILARLY, THE LD. CIT (A) DIRECTED THE AO TO RESTRICT THE COMMISSION ON BOGUS PURCHASE TO 0. 25% AS AGAINST 1% MADE BY THE AO. THE REVENUE IS IN APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 5 . THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUND S OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN DELETING THE ADDITION OF RS. 1,08,50,022/ - 4 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 MADE ON ACCOUNT OF DISALLOWANCE OF NON - GENUINE PURCHASES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE ITS CLAIM OF ALLEGED PURCHASES AND ALSO THE FACT THAT ALLEGED SUPPLIERS WERE NON - EXISTENT AND WERE IDENTIFIED AS HAWALA DEALERS BY THE OFFICIAL WEBSITE OF THE SALE TAX DEPARTMENT,GOVERNMENTOF MAHARASHTRA, WWW.MAHAVAT.GOV.IN . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN RESTRICTING THE DISALLOWANCE ON ACCOUNT OF GROSS PROFIT FROM 4% TO 2% OF THE ALLEGED PURCHASES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE I TS CLAIM OF ALLEGED PURCHASES AND ALSO THE FACT THAT ALLEGED SUPPLIERS WERE NON - EXISTENT AND WERE IDENTIFIED AS HAWALA DEALERS BY THE OFFICIAL WEBSITE OF THE SALE TAX DEPARTMENT,GOVERNMENTOF MAHARASHTRA, WWW.MAHAVAT .GOV.IN . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN COMING TO A CONCLUSION THAT THE GOODS ALLEGEDLY PURCHASED FROM THE HAWALA DEALERS WERE EITHER UTILIZED IN THE PROCESS OF MANUFACTURING OR ARE LYING IN STOCK - IN - T RADE ON THE BASIS OF INSPECTION & TESTING REPORT OF MATERIAL PURCHASED AND STOCK FLOW STATEMENTS SUBMITTED DURING THE APPELLATE PROCEEDINGS WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE SAME IN VIOLATION OF RULE 46A OF THE INCOME - TA X RULES, 1962. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN RESTRICTING THE COMMISSION ON BOGUS PURCHASES TO 0.25% AS AGAINST 1% MADE IN THE ASSESSMENT ORDER WITHOUT BRINGING ANYTHING ON RECORD TO SHOW THAT THE SAME I S FIXED AT THE PREVAILING MARKET RATE WHEREAS IN THE ASSESSMENT ORDER IT WAS MENTIONED THAT THE PERCENTAGE OF COMMISSION APPLIED IS BASED ON THE STATEMENT OF SOME OF HAWALA DEALERS BEFORE THE SALES - TAX AUTHORITIES. 6. BEFORE US, THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) RELYING ON THE ASSESSMENT ORDER SUBMITTED THAT THE LD.CIT (A) HAS WRONGLY DELETED THE ADDITION OF THE TOTAL AMOUNT OF BOGUS PURCHASES WITHOUT APPRECIATING THE FACT 5 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE PURCHASES IN QU ESTION . THE LD. DR FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF 4% ON ACCOUNT OF GROSS PROFIT FROM BOGUS PURCHASES AND ADDITION OF 1% MADE ON COMMISSION ON BOGUS PURCHASES TO 2% AND 0.25% RESPECTIVELY WITHOUT APPRECIATING THAT THE ASSESSEE HAS FAILED TO SUBMIT QUANTITATIVE TALLY OF THE GOODS IN QUESTION AND ALSO FAILED TO PRODUCE THE PARTIES BEFORE THE AO . SINCE, THE FINDINGS OF THE LD. CIT(A) ARE NOT BASED ON THE EVIDENCE ON RECORD AND NO T IN ACCORDANCE WITH THE SETTLED PR INCIPLES OF LAW, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE RELYING ON THE FINDINGS OF THE LD. CIT(A) SUBMITTED THAT THE LD. CIT (A) HAS RIGHTLY DELETED THE ADDITION OF TOTAL AMOUNT OF BOGUS PUR CHASES AND RESTRICTED THE ADDITION MADE ON ACCOUNT OF G ROSS P ROFIT AND COMMISSION ON BOGUS PURCHASES . THE ASSESSEE HAD MADE PURCHASE S IN THE ORDINARY COURSE OF BUSINESS. TO PROVE THE GENUINENESS OF THE TRANSACTIONS, THE ASSESSEE HAS SUBMITTED PARTY - WISE D ETAIL OF PURCHASES, LEDGER ACCOUNTS OF THE PARTIES PAN OF THE PARTIES, BILLS, DETAILS OF STATEMENTS OF BANK ACCOUNTS AND CHEQUE NUMBERS, GOODS RECEIPT NOTE AND INSPECTION AND TESTING REPORT. RELYING ON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT DELIVERED IN CIT VS. NIKUNJ EXIMP ENTERPRISES PVT. LTD. 372 ITR 619 (BOM) , THE LD. COUNSEL SUBMITTED THAT MERELY BECAUSE THE SUPPLIERS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE CIT (A) ONE COULD NOT CONCLUDE THAT THE PURCHASES WERE NOT MADE. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE FINDINGS OF THE LD. CIT(A) ARE BASED ON THE EVIDENCE ON RECORD AND IN ACCORDANCE WITH THE SETTLED PRINCIPLES OF LAW, THERE IS NO MERIT IN THE REVENUES APPEAL AND THE SAME IS LIABLE TO BE DISMISSED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ENTIRE RECORD AND ALSO GONE THROUGH THE CASES RELIED UPON BY THE AUTHORITIES BELOW AS WELL AS 6 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 REFERRED BY THE PARTIES BEFORE US. THE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT (A) HAS WRONGLY DELETED ADDITION OF TOTAL AM OUNT OF BOGUS PURCHASES MADE BY THE AO . FURTHER , THE LD. CIT(A) HAS WRONGLY RESTRICTED THE ADDITION OF 4% MADE ON ACCOUNT OF GROSS PROFIT FROM BOGUS PURCHASES TO 2% AND THE ADDITION OF 1% MADE ON THE COMMISSION OF BOGUS PURCHASES TO 0.25% MADE BY THE AO . WE NOTICE THAT THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT AND ACCEPTED THE SALES SHOWN BY THE ASSESSEE. SINCE, THE AO HAS NOT REJECTED THE SALES SHOWN DURING THE RELEVANT YEAR, THE ENTIRE AMOUNT OF PURCHASES CANNOT BE ADDED TO THE INCOME OF THE ASSESSE E AS THERE CANNOT BE SALE WITHOUT ANY PURCHASE. IF THE ASSESSEE HAD NOT PURCHASED THE GOODS IN QUESTION FROM THE PARTIES CONCERNED, IT MIGHT HAVE PURCHASED FROM THE PARTIES OTHER THAN THOSE MENTIONED IN THE BOOKS OF ACCOUNT WITHOUT PAYING VAT AND OTHER TAX ES AP PLICABLE DURING THE RELEVANT PERIOD . THEREFORE, THE AO SHOULD HAVE MADE ADDITION KEEPING IN VIEW THE PROFIT ELEMENT EMBEDDED IN THE PURCHASES IN QUESTION. BUT , THERE IS NO JUSTIFICATION IN MAKING ADDITION OF THE ENTIRE AMOUNT OF BOGUS PURCHASES DETER MINED BY THE ASSESSEE . ON THE OTHER HAND , THE LD CIT(A) HAS NOT GIVEN ANY COGENT REASON AS TO HOW 4% ADDITION IS JUSTIFIED. THE LD. CIT(A) HAS NOT HELD THAT THE PURCHASES IN QUESTION ARE GENUINE. SINCE, THE PURCHASES HAVE BEEN TREATED AS BOGUS, THE LD. CIT (A) OUGHT TO HAVE DETERMINED THE ADDITION AS PER THE LAW LAID DOWN BY THE VARIOUS HIGH COURTS AND THE VARIOUS BENCHES OF THE TRIBUNAL. HENCE, WE FIND MERIT IN THE CONTENTIONS OF THE LD. DR. 9. THE HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ EXIMP ENTERP RISES PVT. LTD. 372 ITR 619 (BOM) , WHILE UPHOLDING THE DECISION OF MUMBAI TRIBUNAL, HAS OBSERVED THAT MERELY BECAUSE THE SUPPLIERS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE CIT (A) ONE COULD NOT CONCLUDE THAT THE PURCHASES WERE NOT MADE BY THE R ESPONDENT/ASSESSEE. THE HONBLE GUJRAT HIGH COURT IN CIT VS. SIMIT P. SETH 356 ITR 451(GUJ) UPHELD THE DECISION OF THE TRIBUNAL AND SUSTAINED THE ADDITION 12.5% OF THE TOTAL BOGUS PURCHASES HOLDING THAT ONLY 7 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES CAN BE ADDED TO INCOME OF THE ASSESSEE. HENCE, FOLLOWING THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE HIGH COURTS OF BOMBAY AND GUJARAT, DISCUSSED ABOVE, WE PARTLY ALLOW THE APPEAL OF THE REVENUE AND MODIFY THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO MAKE ADDITION @ 12.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES TO THE INCOME OF THE ASSESSEE. ITA NO. 7346 /MUM/2016 (ASSE SSMENT Y EAR: 2010 - 2011 ) SINCE, THE FACTS LEADING TO THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE ASSESSEES OWN APPEAL PERTAINING T O THE ASSESSMENT YEAR 2009 - 2010, DISCUSSED ABOVE EXCEPT THE AMOUNT OF BOGUS PURCHASES AND THE CONSEQUENTIAL ADDITIONS MADE BY THE AUTHORITIES BELOW, WE DO NOT CONSIDER IT NECESSARY TO REPRODUCE THE FACTS OF THE CASE HERE. IN THIS CASE ALSO THE AO MADE ADDI TION OF TOTAL AMOUNT OF BOGUS PURCHASES AND FURTHER MADE ADDITION OF 4% ON GROSS PROFIT AND 1% ON COMMISSION AND IN APPEAL THE LD. CIT(A) DELETED THE ADDITION OF TOTAL AMOUNT OF BOGUS PURCHASES, HOWEVER, RESTRICTED THE ADDITION MADE ON ACCOUNT OF GROSS PRO FIT FROM 4% TO 2 AND ON COMMISSION FOR ARRANGING BOGUS PURCHASES FROM 1% TO 0.25%. AGAINST THE SAID ORDER THE REVENUE HAS PREFERRED THE PRESENT APPEAL. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED B Y THE LD. CIT (A): - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN DELETING THE ADDITION OF RS. 87,48,319/ - MADE ON ACCOUNT OF DISALLOWANCE OF NON - GENUINE PURCHASES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS N OT ABLE TO SUBSTANTIATE ITS CLAIM OF ALLEGED PURCHASES AND ALSO THE FACT THAT ALLEGED SUPPLIERS WERE NON - EXISTENT AND WERE IDENTIFIED AS HAWALA DEALERS BY THE OFFICIAL WEBSITE OF THE SALE TAX DEPARTMENT,GOVERNMENTOF MAHARASHTRA, WWW.MAHAVAT.GOV.IN . 8 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN RESTRICTING THE DISALLOWANCE ON ACCOUNT OF GROSS PROFIT FROM 4% TO 2% OF THE ALLEGED PURCHASES WITHOUT APPRECIATING THE FACT THAT THE AS SESSEE WAS NOT ABLE TO SUBSTANTIATE ITS CLAIM OF ALLEGED PURCHASES AND ALSO THE FACT THAT ALLEGED SUPPLIERS WERE NON - EXISTENT AND WERE IDENTIFIED AS HAWALA DEALERS BY THE OFFICIAL WEBSITE OF THE SALE TAX DEPARTMENT,GOVERNMENTOF MAHARASHTRA, WWW.MAHAVAT.GOV.IN . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN COMING TO A CONCLUSION THAT THE GOODS ALLEGEDLY PURCHASED FROM THE HAWALA DEALERS WERE EITHER UTILIZED IN THE PROCESS OF MAN UFACTURING OR ARE LYING IN STOCK - IN - TRADE ON THE BASIS OF INSPECTION & TESTING REPORT OF MATERIAL PURCHASED AND STOCK FLOW STATEMENTS SUBMITTED DURING THE APPELLATE PROCEEDINGS WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE SAME IN V IOLATION OF RULE 46A OF THE INCOME - TAX RULES, 1962. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS ERRED IN RESTRICTING THE COMMISSION ON BOGUS PURCHASES TO 0.25% AS AGAINST 1% MADE IN THE ASSESSMENT ORDER WITHOUT BRINGING ANYTH ING ON RECORD TO SHOW THAT THE SAME IS FIXED AT THE PREVAILING MARKET RATE WHEREAS IN THE ASSESSMENT ORDER IT WAS MENTIONED THAT THE PERCENTAGE OF COMMISSION APPLIED IS BASED ON THE STATEMENT OF SOME OF HAWALA DEALERS BEFORE THE SALES - TAX AUTHORITIES. 3. SINCE, WE HAVE PARTLY ALLOWED THE APPEAL OF THE REVENUE IN ASSESSEES OWN APPEAL FOR THE ASSESSMENT YEAR 2009 - 2010 AND MODIFIED THE ORDER OF THE LD. CIT(A), WE ALSO PARTLY ALLOW THE PRESENT APPEAL OF THE REVENUE FOR THE SAME REASONS AND DIRECT THE AO MAKE ADDITION OF 12.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES MADE BY THE ASSESSEE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. 9 ITA NO S . 7345 & 7346 /MUM/2016 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 IN THE RESULT, APPEALS FILED BY THE REVENUE FOR ASSESSMENT YEAR S 2009 - 10 AND 2010 - 11 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH NOVEM BER , 2017 . SD/ - SD/ - ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBA I ; DATED: 10 / 1 1 / 2017 ALINDRA 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
