DCIT 30(2), MUMBAI V. KISHORE KUMAR AGARWAL, MUMBAI

ITA 870/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8839 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 09-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMCHANDRAN
• Keywords: Reopening of assessment; Bogus purchase; Tangible material; Reason to believe
• Section: 143(3); 133A; 133(6); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NOS.870 & 871/MUM/2015 ( ASSESSMENT YEARS 2010-11 & 2011-12) DCIT, 30(2), ROOM NO.601, C-13, 6 TH FLOOR, B.K.C. BANDRA (E),MUMBAI 400 020 ...... APPELLANT VS. SHRI KISHORE KUMAR AGARWAL, 19/400/C-2, SEKSARIA INDL., ESTATE, S.V.ROAD, MALAD(WEST) MUMBAI 400 064 PAN:AAA PD4566E .... RESPONDENT CO.NO.132 & 133/MUM/2016 (ARISING OUT OF ITA NOS.870 & 871 /MUM/2015, ASSESSMENT YEARS - 2010-11& 2011-12) SHRI KISHORE KUMAR AGARWAL, 19/400/C-2, SEKSARIA INDL., ESTATE, S.V.ROAD, MALAD(WEST) MUMBAI 400 064 PAN:AAA PD4566E ...... CROSS OBJECTOR VS. DCIT, 30(2), ROOM NO.601, C-13, 6 TH FLOOR, B.K.C. BANDRA (E),MUMBAI 400 020 ....... APPELLANT IN APPEAL REVENUE BY : SHRI A. RAMCHANDR AN ASSESSEE BY : S/SHRI K. SHIVRAM & RA HUL HAKANI 2 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 DATE OF HEARING : 22/09/2016 DATE OF PRONOUNCEMENT : 25/0 1/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEALS FILED BY THE REVENUE AND CR OSS OBJECTIONS BY THE ASSESSEE PERTAINING TO ASSESSMENT YEARS 2010-11 & 2011-12 ARE DIRECTED AGAINST SEPARATE ORDERS PASSED BY CIT(A)-34, MUMBA I DATED 14/11/2014, WHICH IN TURN, ARISE OUT OF AN ORDERS PASSED BY TH E ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) DATED 28/02/2014. SINCE, COMMON ISSUES ARE INVOL VED IN THESE APPEALS/CROSS OBJECTIONS, THEY ARE BEING CLUBBED TOGETHER AND A C ONSOLIDATED ORDER IS PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. SINCE THE DISPUTE IN BOTH THE ASSESSMENT YEARS STAND ON A SIMILAR FOOTING, WE MAY TAKE UP THE CROSS APPEALS FOR ASSES SMENT YEAR 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. C.I.T (A) ERRED IN DELETING THE ADDITION OF RS. 4,70,32,085/- MADE ON ACCOUNT OF NON GENUINE PURCHASES FROM VARIOUS PARTIES AND DIRECTING THE AO TO DELETE THE ENTIRE ADDITION OF RS.4,70,32,085/- EVEN THOUGH SOME OF THESE PARTIES ARE INCLUDED IN THE LIST OF SUSPICIOUS AND/OR HAWALA DEALERS PROVIDED BY THE SA LES TAX DEPARTMENT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DEL ETE THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES IGNORING THE FACT THAT IT IS A SETT LED PROVISION OF LAW THAT THE ONUS IS UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE A LLEGED PURCHASES. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DEL ETE THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES RELYING ON THE DECISION OF THE HON' BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT 1, MUMBAI VS. NIKUNJ EXIMP ENTERPRISES PRIVATE LIMITED, THE FACTS OF WHICH ARE DISTINGUISHABLE FROM THE FACT OF THE PRESENT CA SE. 3 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 3.1. IN THE CASE OF M/S. NIKUNJ EXIMP ENTERPRISES PRIVATE LIMITED., THE HON'BLE HIGH COURT HAD GRANTED RELIEF TO THE ASSESSEE AS THE ASS ESSEE HAD PRODUCED THE STOCK STATEMENT, STOCK RECONCILIATION STATEMENT AND OTHER EVIDENCES WHEREAS IN THE PRESENT CASE NO SUCH EVIDENCE SUCH AS STOCK STATEME NT, STOCK RECONCILIATION STATEMENT, WERE PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE QUANTITATIVE DETAILS WERE ALSO NOT FURNISHED IN THE AUDIT REPORT U/S 44AB OF THE LT. ACT. 3.2 IN THE PRESENT CASE, THE SALES TAX DEPARTMENT OF GOVT OF MAHARASHTRA AFTER EXHAUSTIVE INVESTIGATION AND RECORDING STATEMENT OF VARIOUS HAWALA DEALERS HAVE PREPARED A COMPREHENSIVE LIST OF TRADERS WHO WERE P ROVIDING BOGUS PURCHASE BILL WITHOUT ANY DELIVERY OR TRANSFER OF GOODS AND THE A SSESSEE HAD NEVER CHALLENGED THE EXISTENCE OF THE LIST PUBLISHED BY THE SALES TAX DE PARTMENT. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DEL ETE THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES WITHOUT TAKING INTO CONSIDERATION T HE DECISION IN THE CASE OF JUGGILAL KAMLAPAT VS CIT 73 ITR 702 (SC), WHEREIN IT WAS HEL D THAT THE ASSESSING OFFICER COULD GO BEHIND THE LEGAL FORM AND FIND OUT SUBSTANCE HAV ING REGARD TO THE ECONOMIC REALITIES BEHIND THE LEGAL FACADE. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DEL ETE THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES WITHOUT TAKING INTO CONSIDERATION T HE DECISION OF THE HON'BLE ITA T DELHI BENCH IN THE CASE OF DCIT VS. SMT. PHOOLWATI DEVI (2009) 314 ITR AT1(DELHI), WHEREIN IT IS HELD THAT 'DESPITE THE DOCUMENTATION SUPPORTING THE CLAIM OF THE ASSESSEE SUPERFICIALLY, THE EVIDENCE COULD NOT BE A CCEPTED IN VIEW OF THE SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES. THERE WERE C ERTAIN FEATURES OF THE CASE WHICH BELIE THE DOCUMENTARY EVIDENCE. 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DEL ETE THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES WITHOUT TAKING INTO CONSIDERATION T HE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE SUMATI DAYAL VS. CIT (199 5) 214 ITR 801, WHEREIN IT HAS BEEN HELD THAT A SUPERFICIAL APPROACH TO THE PROBLE M SHOULD BE ESCHEWED AND THE MATTER HAS TO BE CONSIDERED IN THE LIGHT OF HUMAN P ROBABILITIES AND FURTHER THAT ANY TRANSACTION ABOUT WHICH DIRECT EVIDENCE IS RARELY A VAILABLE SHOULD BE INFERRED ON THE BASIS OF CIRCUMSTANCES AVAILABLE ON THE RECORD. IN THAT CASE, THE MAJORITY OPINION OF THE SETTLEMENT COMMISSION WAS APPROVED AS IT WAS TA KEN AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES. 2.1 GROUNDS OF CROSS OBJECTION RAISED BY THE ASSESS EE FOR 2010-11 READ AS FOLLOWS:- 4 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 1. THE LD. CIT CA) ERRED IN UPHOLDING REOPENING OF ASSESSMENT U/S 148 WITHOUT APPRECIATING THAT: I) THE ASSESSMENT WAS REOPENED ON THE BASIS OF IN FORMATION RECEIVED FROM DGIT (LNV), MUMBAI WITHOUT FORMING ANY BELIEF AS TO INCO ME HAS ESCAPED ASSESSMENT. THEREFORE, AS PER SECTION 147, SUCH REOPENING IS IN VALID. II) THERE WAS NO 'REASON TO BELIEVE' AS THERE WAS NO LIVE LINK OF TANGIBLE MATERIAL WITH FORMATION OF BELIEF THAT INCOME HAS ESCAPED AS SESSMENT, HENCE, INVALID. 2. THE RESPONDENT PRAYS THAT REOPENING OF ASSESSME NT MAY BE QUASHED AND HELD TO BE VOID AB-INITIO. 3. THE RESPONDENT CRAVES LEAVE TO ADD, ALTER OR AM END ANY OR ALL THE ABOVE GROUNDS OF CROSS-OBJECTION AT THE TIME OF HEARING OR BEFORE . 3. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE SOLITARY GRIEVANCE ARISES FROM THE ACTION OF THE CI T(A) IN HOLDING THAT THE AMOUNT OF RS.4,70,32,085/- COULD NOT BE ADDED TO TH E TOTAL INCOME ON ACCOUNT OF NON-GENUINE PURCHASES. 4. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESS EE IS AN INDIVIDUAL, WHO IS, INTER-ALIA, ENGAGED IN THE BUSINESS OF GOVERNMENT S UPPLIES AND CONTRACTING FOR DEVELOPMENT AND MAINTENANCE OF GARDENS THROUGH HIS PROPRIETARY CONCERN M/S. VARAD VINAYAK GARDENS. IT HAS BEEN EXPLAINED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS UNDERTAKEN THREE ACTIVITIES, NAMELY EXECUTING CONTRACTS FOR SECURITY; GARDEN DEVELOPMEN TS & MAINTENANCE; AND, OTHER GOVERNMENT SUPPLIES. IN THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER HAD NOTED THAT ASSESSEE HAD MADE PURCHASES FROM CERTAIN PARTIES, WHOSE NAMES APPEARED IN THE LIST PROVIDED BY THE SALES TAX DEPARTMENT OF MAHARASHTRA, WHICH WERE PROVIDING O NLY ACCOMMODATION BILLS. A SURVEY UNDER SECTION 133A OF THE ACT WAS ALSO CAR RIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 07/01/2013. THE IMPUGN ED ASSESSMENT HAS BEEN CARRIED OUT AS A CONSEQUENCE OF A NOTICE ISSUED UND ER SECTION 148 OF THE ACT 5 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 DATED 26/03/2013, AFTER RECORDING REASONS THAT CERT AIN INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. IN THE ENSURING ASSESS MENT, THE ASSESSING OFFICER SHOW CAUSED THE ASSESSEE AS TO WHY PURCHASE S MADE THROUGH 26 PARTIES TOTALLING TO RS.4,75,06,338/- BE NOT CON SIDERED AS BOGUS AND IT WAS BASED ON THE INFORMATION COLLECTED FROM THE SALE TA X DEPARTMENT OF MAHARASHTRA AND DURING THE COURSE OF SURVEY ON THE ASSESSEE. IN THE ENSUING ASSESSMENT, THE ASSESSING OFFICER HELD THE PURCHASE S MADE BY THE ASSESSEE FROM 25 PARTIES, TOTALING TO RS.4,70,32,085/- AS B OGUS ON THE GROUND THAT THE NOTICES ISSUED TO SUCH PARTIES UNDER SECTION 133(6) OF THE ACT COULD EITHER NOT BE SERVED OR WHERE SERVED, IT WAS NOT RESPONDED B Y THE CONCERNED PARTIES. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CI T(A), MAKING DETAILED SUBMISSIONS. THE CIT(A) NOTICED THAT THE ASSESSEE HAD SUBMITTED COMPLETE DOCUMENTARY EVIDENCES SUCH AS LEDGER ACCOUNT OF THE PARTIES, CONFIRMATION FROM THE PARTIES, BANK STATEMENTS REFLECTING PAYMEN TS TO PARTIES THROUGH ACCOUNT PAYEE CHEQUES, COPY OF INVOICES, PURCHASE O RDER, ETC. THE CIT(A) ALSO NOTE THAT ASSESSEE WAS INVOLVED IN THE BUSINESS OF EXECUTING GOVERNMENT CONTRACTS AND HAD SUBMITTED COPIES OF WORK ORDER IS SUED BY THE MUNICIPAL CORPORATION AND OTHER DOCUMENTS, WHICH SUPPORTED TH AT THE PURCHASES WERE GENUINE. THE CIT(A) HAS FURTHER COME TO A FINDING THAT THERE WAS NO EVIDENCE TO SAY THAT THE PAYMENTS MADE BY THE ASSESSEE THROU GH ACCOUNT PAYEE CHEQUES HAD BEEN RECEIVED BACK IN THE FORM OF CASH. THE CIT(A) ALSO NOTICED THAT NONE OF THE PARTIES HAVE MADE ANY STATEMENTS T HAT THE PURCHASES BY THE ASSESSEE WERE IN-GENUINE. FOR ALL THE ABOVE REASON S, THE CIT(A) HELD THE PURCHASES TO BE GENUINE AND NOT BOGUS. HOWEVER, T HE CIT(A) FURTHER OBSERVED THAT EVEN IF, SOME OF THE PURCHASES WERE NOT VERIFI ABLE, YET HAVING REGARD TO THE GROSS-PROFIT DECLARED BY THE ASSESSEE, IN THE S EGMENT OF GARDEN 6 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 DEVELOPMENTS AND MAINTENANCE, IT COULD NOT BE SAID THAT IT WAS INSUFFICIENT LOOKING AT THE NATURE OF THE BUSINESS CARRIED OUT B Y THE ASSESSEE. IN THIS CONTEXT, SO FAR AS THE ASSESSMENT YEAR 2010-11 IS C ONCERNED, THE CIT(A) NOTICED THAT ASSESSEE HAS DECLARED G.P RATE OF 11.67% IN T HE GARDEN DEVELOPMENT AND MAINTENANCE SEGMENT AND THAT THE SAME WAS ADEQUATE CONSIDERING THE NATURE OF BUSINESS. THEREFORE, SO FAR AS THE ASSES SMENT YEAR 2010-11 IS CONCERNED, SHE HAS DELETED THE ENTIRE ADDITION. 4.1 IN SO FAR AS THE ASSESSMENT YEAR 2011-12 IS CON CERNED, THE CIT(A) NOTICED THAT THE G.P RATE DECLARED WAS 8.60%, WHICH ACCORDI NG TO HER WAS LOWER THAN THE NORMALLY ACCEPTABLE G.P RATE OF 10% IN ASSESSEE S LINE OF BUSINESS. THEREFORE, FOR ASSESSMENT YEAR 2011-12, THE CIT(A) CONFIRMED AN ADDITION TO THE EXTENT OF RS.17,27,223/- BEING THE DIFFERENCE I N G.P ACTUALLY DECLARED BY THE ASSESSEE AT 8.60% AND 10.00%, WHICH WAS CONSIDE RED AS AN ACCEPTABLE LEVEL OF G.P. AS A CONSEQUENCE, FOR ASSESSMENT YEA R 2011-12, THE CIT(A) RETAINED A DISALLOWANCE OF RS.17,27,223/- AS AGAINS T THE ADDITION OF RS.2,32,86,685/- MADE BY THE ASSESSING OFFICER. O STENSIBLY, THE CIT(A) NOT ONLY DIFFERED WITH THE ASSESSING OFFICER ON THE ISS UE OF BOGUS PURCHASES, BUT ALSO CHANGED THE BASIS OF THE PART ADDITION RETAIN ED BY HER. 5. IN THE ABOVE BACKGROUND, WE HAVE HEARD THE RIVAL PARTIES AND THE RELEVANT MATERIAL HAS BEEN PERUSED. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE HAS VEHEMENTLY POINTED OUT THAT THE CIT(A) HAS WRONGLY PROCEEDED TO MAKE AN ADDITION BASED ON THE GROSS PR OFIT RATE, WHEREAS THE ASSESSING OFFICER HAD MADE A SPECIFIC ADDITION ON ACCOUNT OF UNVERIFIED PURCHASES UNDER SECTION 68 OF THE ACT. 7 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 5.1 ON THE OTHER HAND, LD. REPRESENTATIVE FOR THE R ESPONDENT ASSESSEE HAS POINTED OUT THAT THE ASSESSING OFFICER WAS NOT JUST IFIED IN MAKING THE ADDITION MERELY BECAUSE THE PARTIES DID NOT RESPOND, WHEREAS THE MATERIAL ON RECORD SHOWED THAT THE PURCHASES WERE SUPPORTED BY RELEVAN T BILLS, ENTRIES IN THE BOOKS OF ACCOUNT AND THE PAYMENTS WERE MADE BY ACCO UNT PAYEE CHEQUES. IT WAS ALSO POINTED OUT THAT THE CIT(A) HAS MADE A CAT EGORICAL FINDING THAT THE PURCHASES WERE EFFECTED INASMUCH AS THE MATERIAL WA S INDEED USED FOR THE EXECUTION OF CONTRACT FOR THE LOCAL GOVERNMENT AUTH ORITIES. IN SO FAR THE PLEA OF THE LD. DEPARTMENTAL REPRESENTATIVE, BASED ON T HE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF LA MEDIC A, 250 ITR 575(DEL) IS CONCERNED, IT WAS POINTED OUT THAT THE SAID DECISIO N IS INAPPLICABLE IN THE FACTS OF THE PRESENT CASE INASMUCH AS IN THE INSTANT CASE CIT(A) HAS MADE A CATEGORICAL FINDING THAT THERE WAS NO EVIDENCE TO S UGGEST THAT PAYMENTS MADE BY THE ASSESSEE TO THE SUPPLIERS THROUGH ACCOUNT P AYEE CHEQUES HAD BEEN RECEIVED BACK IN THE FORM OF CASH. IN SUM AND SUBS TANCE, THE ORDER OF THE CIT(A) HAS BEEN SOUGHT TO BE DEFENDED, QUA THE APP EALS OF THE REVENUE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IT IS QUITE CLEAR THAT AT THE LEVEL OF THE ASSESSING OFFICER, THE PURCHASE S HAVE BEEN HELD TO BE UNVERIFIABLE PRIMARILY FOR THE REASON THAT THE NOTI CES ISSUED BY THE ASSESSING OFFICER UNDER SECTION133(6) OF THE ACT WERE EITHER NOT SERVED OR IF THEY WERE SERVED, THE SAME WERE NOT RESPONDED TO BY THE RESP ECTIVE PARTIES. IN CONTRAST, THE CIT(A) HAS RECORDED A CATEGORICAL FINDING IN PARA 6.29 TO 6.30 OF HER ORDER AND HAS OBSERVED THAT THE PURCHASES WERE LIABLE TO BE HELD AS GENUINE AND NOT BOGUS. IN THE CONTEXT OF ASSESSMEN T YEAR 2010-11, WE FIND THAT THE SAID FINDINGS OF THE CIT(A) HAVE NOT BEEN ASSAILED BY THE REVENUE AND CANNOT BE SAID TO BE BASED ON IRRELEVANT MATERIAL. EVEN BEFORE US, THE LD. 8 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 DEPARTMENTAL REPRESENTATIVE HAS MERELY REITERATED THE STAND OF THE ASSESSING OFFICER, WHICH IN OUR OPINION CANNOT BE SUSTAINED I N THE FACE OF THE FINDINGS OF THE CIT(A). THE CIT(A) HAS OBSERVED THAT THE PAYME NTS MADE ARE SUPPORTED BY CONFIRMATION OF THE PARTIES, COPIES OF INVOICES, BA NK STATEMENTS AND FURTHER THAT NONE OF THE PARTIES HAVE NAMED THE ASSESSEE IN THEIR STATEMENTS. CONSIDERING THESE CIRCUMSTANCES, WE HEREBY AFFIRM THE ORDER OF THE CIT(A) IN PRINCIPLE THAT THE PURCHASES CANNOT BE TREATED AS B OGUS. 6.1 THE OTHER LIMB OF THE CONCLUSION OF THE CIT(A) IS THAT EVEN IF, SOME OF THE PURCHASES WERE NOT VERIFIABLE, THE ADDITION, IF ANY , COULD BE MADE ONLY FOR THE EMBEDDED PROFIT. IN THIS CONTEXT, FOR ASSESSMENT Y EAR 2010-11, THE CIT(A) HAS EXAMINED THE G.P RATE DECLARED BY THE ASSESSEE @11. 67% AND NOT THAT CONSIDERING THE NATURE OF ASESSEES BUSINESS, THE G .P RATE OF 10% IS QUITE ACCEPTABLE. SINCE THE DECLARED PROFIT OF 11.67% WA S MORE THAN THE RATE OF 10%, THE CIT(A) HAS CHOSEN TO DELETE THE ENTIRE ADD ITION. IN THE ABSENCE OF ANY INFIRMITY IN THE ACTION OF THE CIT(A), THE SAME IS AFFIRMED. 6.2 IN ASSESSMENT YEAR 2011-12 ALSO THE CIT(A) HA S DELETED THE ADDITION ON ACCOUNT OF PURCHASES ON THE SAME GROUND AS IN ASSES SMENT YEAR 2010-11. THE ONLY DIFFERENCE IS THAT IN ASSESSMENT YEAR 2011-12, ASSESSEE HAS DECLARED A G.P RATE OF 8.60%, WHICH ACCORDING TO THE CIT(A) WA S LESS THAN THE NORMAL ACCEPTABLE G.P RATE OF 10% IN SUCH LINE OF BUSINESS . TO THE EXTENT OF THE DIFFERENCE, SHE HAS RETAINED AN ADDITION OF RS.17, 27,223/-. ON THIS ASPECT ALSO, WE FIND NO REASON TO INTERFERE WITH THE DECIS ION OF THE CIT(A), WHICH IS QUITE REASONABLE AND IS BASED ON A PLAUSIBLE REASON ING. THUS, IN ASSESSMENT YEARS 2010-11 AND 2011-12, THE ORDERS OF CIT(A) A RE AFFIRMED AND ACCORDINGLY REVENUE FAILS IN BOTH THE ASSESSMENT YEARS. 9 ITA NOS.870 & 871/MUM/2015 CO.NO.132 & 133/MUM/2016 7. IN SO FAR AS THE RESPECTIVE CROSS OBJECTIONS ARE CONCERNED, THE SAME ARE ALSO DISMISSED IN THE ABSENCE OF ANY SERIOUS PERSUA SION BY THE LD. REPRESENTATIVE FOR THE ASSESSEE. 8. RESULTANTLY, THE APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTIONS FILED BY ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/01/201 7 SD/- SD/- ( RAM LAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 25/01/2017 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