M/S KARTEEK FERROMET PVT LTD, MUMBAI V. ITO- 5(2)(2), MUMBAI

ITA 967/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5737 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOURABH DESHPANDE
• Keywords: Reopening of assessment; Bogus purchase; Accommodation entries
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH M UMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBE R ITA NO.967 & 968/MUM/2019 ( ASSESSMENT YEARS: 2009-10 & 2011-12 ) KARTEEK FERROMET PVT.LTD. 2 ND FLOOR, PLOT NO.162 19, GANJAWALA BUILDING M.G.MAHIMTURA MARG KUMBHARWADA GIRGAON MUMBAI-400 004 VS. ITO-5(2)(2) ROOM NO.567, AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO. A ADCK4241K ( APPELLANT ) .. RE SPONDENT ) REVENUE BY SHRI SOURABH DESHPANDE, ADDL. CIT- DR ASSESSEE BY NONE DATE OF HEARING 06/02 /2020 DATE OF PRONOUNCEMENT 14 /02/2020 / O R D E R PER G.MANJUNATHA (A.M) : THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST, ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)10, MUMBAI, BOTH DATED 28/12/2018, FOR THE AY 2009-10 & 2011-12. SINCE, FACTS ARE IDENTICAL AND ISSUES ARE COMMON, F OR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED- OFF BY THIS CONSOLIDATED ORDER. 2. THE ASSESSEE HAS MORE OR LESS RAISED COMMON GROU NDS OF APPEAL FOR BOTH AYS. THEREFORE, FOR THE SAKE OF BR EVITY, GROUNDS OF APPEAL FILED FOR AY 2009-10 ARE REPRODUCED AS UNDER :- ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE ID. AO ERRED IN RE-OPENING THE ASSESSMENT U/S.147 O F THE INCOME TAX ACT, 1961 SINCE THE PRESCRIBED CONDITIONS THEREIN A RE NOT SATISFIED. THE RE-OPENING OF THE ASSESSMENT IS INCORRECT AND INVAL ID. 2.A) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE ID.CLT(A) ERRED IN CONFIRMING THE ADDITION TO THE E XTENT OF RS. 4,49,435/-( @ 12.5% OF THE IMPUGNED PURCHASES) MADE BY THE AO T O THE INCOME OF THE APPELLANT ON ACCOUNT OF POSSIBLE PROFIT ELEMENT OF RS. 7,47,860/- BEING @ 25% EMBEDDED IN PURCHASES MADE THROUGH ALLEGED NON - GENUINE PARTIES ON THE BASIS OF INFORMATION OF THE SALES TAX DEPARTMENT ABOUT AUSPICIOUS DEALERS AFTER ALLOWING SET OFF @4. 20% IN RESPECT OF GROSS PROFIT SHOWN IN THE BOOKS OF ACCOUNT. B) THE LD, C1T(A) FAILED TO APPRECIATE THAT :- I] ALL THE PURCHASES ARE GENUINE BEYOND DOU BT AND SUPPORTED BY SUFFICIENT MATERIALS; II) ALL THE GOODS PURCHASED FROM THESE PARTI ES HAVE BEEN BACKED BY CORRESPONDING SALES WHICH ARE ACCEPTED TO BE GENUIN E; III) THE GROSS PROFIT RATIO SHOWN BY THE APPEL LANT IS QUITE REASONABLE; IV} NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO THAT MONEY HAS EXCHANGED THE HANDS IN LIEU OF PAYMENT MADE FOR THE SE PURCHASES BY ACCOUNT PAYEE CHEQUE; AND VI) THE AO HAD NEITHER PROVIDED COPY OF MATE RIALS AND STATEMENTS RELIED UPON BY HIM NOR ALLOWED ANY OPPORTUNITY TO T HE APPELLANT TO CROSS EXAMINE THOSE PARTIES WHO HAVE BEEN ALLE GED TO HAVE PROVIDED THE ACCOMMODATION ENTRIES OF SUCH PURCHASES. C) IN REACHING TO THE CONCLUSION AND CONFIRMING SUCH ADDITION MADE BY THE AO, THE ID. CIT(A) OMITTED TO CONSIDER RELEVANT FACTORS, CONSIDERATIONS, PRINCIPLES AND EVIDENCES WHILE HE W AS OVERWHELMED, INFLUENCED AND PREJUDICED BY IRRELEVANT CONSIDERATI ONS AND FACTORS. D) WITHOUT PREJUDICE, THE RATE OR PERCENTAGE OF PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES AS AND CONFIRMED BY THE CIT(A) IS EXCESSIVE AND UNREASONABLE ON THE FACTS OF THE CASE. 3. THE ID. AO ERRED IN CHARGING INTEREST U/S.234B A ND 234C OF THE TAX ACT, 1961, 4. THE ID. AO ERRED IN INITIATING THE PENALTY PROCE EDINGS U/S,271(1)(C) OF THE INCOME TAX ACT, 1961, 5. THAT THE GROUND NOS. 1, 3 AND 4 ARE NOT RAISED B EFORE THE CIT(A) AND YOUR APPELLANT PRAYS THAT THESE GROUNDS BE ADMITTED IN THE FAIRNESS OF LAW. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF TRADING IN ALL TYPES OF FERROUS AN D NON FERROUS METALS, FILED ITS RETURN OF INCOME FOR AY 2009-10 O N 30/09/2009, DECLARING TOTAL INCOME AT RS. 1,37,330/- AND THE SA ME WAS PROCESSED U/S 143(1) OF THE I.T.ACT, 1961. SUBSEQUE NTLY, THE CASE ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 3 HAS BEEN REOPENED U/S 147 OF THE ACT, ON THE BASIS OF INFORMATION RECEIVED FROM DGIT, INVESTIGATION, MUMBAI, AS PER W HICH, SALES TAX AUTHORITIES OF GOVERNMENT OF MAHARASHTRA HAD TAKEN ACTIONS AGAINST NUMBER OF HAWALA DEALERS, WHO HAD ISSUED BOGUS PURC HASE BILLS TO VARIOUS PARTIES IN MUMBAI AND OTHER PLACES. AS PER LIST OF BENEFICIARIES, THE ASSESSEE IS ONE OF THE BENEFICIA RY, WHO HAD TAKEN ACCOMMODATION BILLS OF BOGUS PURCHASES FROM VARIOUS PARTIES AS LISTED BY THE AO IN PARA 5 OF HIS ASSESSMENT ORDER AMOUNTING TO RS. 35,95,479/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT HAS BEEN COMPLETED U/S. 143(3).R.W.S. 147 OF THE I. T.ACT, 1961 ON 27/02/2015 AND DETERMINED TOTAL INCOME OF RS. 8,90, 290/-, AFTER MAKING 25% PROFIT ADDITIONS TOWARDS ALLEGED BOGUS P URCHASE FROM THOSE PARTIES. HOWEVER, THE LD. AO HAS ALLOWED FURT HER DEDUCTIONS TOWARDS GROSS PROFIT DECLARED BY THE ASSESSEE AND M ADE ADDITIONS OF RS. 7,47,860/-. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESEE P REFERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESSE HAS REITRATED ITS ARGUMENTS MADE BEFORE THE LD. AO. THE SUM AND SUBSTANCE OF ARGUMENTS OF THE ASSESSEE BEFORE THE L D.CIT(A) ARE THAT PURCHASE FROM THE ABOVE PARTY IS GENUINE, WHIC H IS SUPPORTED BY NECESSARY EVIDENCES. THEREFORE, NO ADDITIONS COU LD BE MADE ON THE BASIS OF INFORMATION RECEIVED FROM THIRD PARTY. THE LD.CIT(A), AFTER CONSIDERING RELEVANT SUBMISSION OF THE ASSESS EE AND ALSO, BY FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COUR T, IN THE CASE OF CIT VS. SIMITH P. SHETH (356 ITR 451) HAS SCALED DO WN ADDITION MADE BY THE AO TOWARDS ALLEGED BOGUS PURCHASES TO 1 2.50% GROSS PROFIT ON TOTAL PURCHASES FROM THOSE PARTIES. THE R ELEVANT FINDINGS OF THE LD.CIT(A) ARE AS UNDER:- ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 4 8.13 IN THE PRESENT CASE, THE ADVERSE EVIDENCE AN D MATERIAL, RELIED UPON IN THE ORDER. TO REACH [HE FINALITY, WERE DISC LOSED TO THE ASSESSEE. HOWEVER, THE APPELLANT COULD NOT ESTABLISH [HE GENU INENESS OF THE TRANSACTION EITHER AND THE BASIS EVIDENCE IN SUPPOR T OF DELIVERY OF GOODS, OR BY PRODUCING THE PARTIES FROM WHOM THE PU RCHASE WERE MADE. HENCE THE PURCHASE TRANSACTION CANNOT BE CONSIDERED AS GENUINE. 8. 14 NONETHELESS, FROM THE FARTS RECORDED ABOVE IN THIS CASE. A HAS EMERGED THAT THE MATERIAL IN QUESTION WAS REALTY RE CEIVED BECAUSE WITHOUT RECEIVING SUCH MATERIAL THE CORRESPONDING S ALES WOULD NOT HAVE BEEN POSSIBLE/E HOWEVER, THE MATERIAL WAS NOT RECEI VED FROM THE PARTIES FROM WHOM IT IS SHOWN TO HAVE BEEN PURCHASED AS TH ERE IS NO INDEPENDENT THIRD PARTY EVIDENCE ON RECORD WHICH CA N SUPPORT THE TRANSACTION. THUS, AN INFERENCE CAN BE DRAWN THAT S UCH MATERIAL WERE PURCHASED FROM DIFFERENT SOURCES WHICH WERE EXCLUSI VELY WITHIN THE KNOWLEDGE OF APPELLANT AND NONE ELSE IT IS WELL KNO WN THAT IF PURCHASES A/E MADE FROM OPEN MARKET WITHOUT INSURING 'REIN TH E GENUINE BIFFS, THE SUPPLIERS MAY BE WILLING TO SELL THOSE PRODUCTS AT A MUCH LOWER RATE AS COMPARED LO THE RATE AT WHICH THEY MAY CHARGE IN CA SE THE DEALER HAS TO GIVE A GENUINE SALE INVOICE IN RESPECT OF THAT SALE AND SUPPLY THE GOODS. THERE MAY BE VARIOUS FACTORS DUE TO WHICH THERE IS BOUND TO BE A SUBSTANTIAL DIFFERENCE BETWEEN THE PURCHASE PRICE O F UNACCOUNTED MATERIAL AND RATE OF PURCHASE OF ACCOUNTED FOR GOO DS THERE MAY BE A SAVING ON ACCOUNT OF SALES-TAX AND OTHER TAXES AND DUTIES WHICH MAY BE LEVIABLE M RESPECT OF MANUFACTURE OF SALE OF GOODS IN QUESTION. THE SUPPLIERS OR THE MANUFACTURERS MAKE A SUBSTANTIAL SAVING IN THE INCOME- TAX IN RESPECT OF INCOME FROM SALE OF UNACCOUNTED G OODS PRICED AND SOLD BY THEM. THIS MAY ALSO BE ONE OF THE FACTORS DUE TO WHICH THE SELLER MAY BE WILLING TO CHARGE LOWER RATES FOR UNACCOUNTED GO ODS AS COMPARED TO ACCOUNTED FOR GOODS 8.15 APPARENTLY, THE MOTIVE BEHIND OBTAINING BOGUS BILLS IS INFLATION OF PURCHASE PRICE SO AS TO SUPPRESS THE PROFITS AND TH E PROFIT FROM SUCH TRANSACTIONS VARIES WITH NATURE OF BUSINESS AND NO UNIFORM YARDSTICK CAN BE ADOPTED FOR ESTIMATION OF SUCH PROFIT THEREFORE, IN LIGHT OF THE ABOVE DECISIONS, LADING IN TO ACCOUNT THE TOTALITY OF THE FACTS, IT WILL BE REASONABLE TO ESTIMATE THE PROFIT EMBEDDED IN THE A CCOMMODATION ENTRIES OF BOGUS PURCHASES AS UNDISCLOSED PROFIT OF THE APPELLANT 8.16 THE ESTIMATIONS OF PROFIT EMBEDDED IN ACCOMMO DATION ENTRIES OF BOGUS PURCHASES TRANSACTIONS 12.5% OUT OF PURCHASE PRICE ACCOUNTED THROUGH BOGUS INVOICES HAVE BEEN UPHELD AS THE FAIR PROFIT RATE OUT OF THE BOGUS PURCHASES BY THE HONBLE COURTS AND TRIBUNALS . 8.17 IN THE CASE OF CIT V SI/NIL P SHETH |30T3) 356 ITR 451 (GUJ){HC), THE HON'BLE HIGH HAS UPHELD DISALLOWANCE @12. 5% OF SUCH PURCHASES. 8.18 THE APPELLANT IS A DEALER AND UNDER IDENTICAL FACTS, THE HONBLE ITAT, BOMBAY TRIBUNAL HAS UPHELD DISALLOWANCE @12.5% OF S UCH PURCHASES IN THE DECISION DATE 4 TH APRIL, 2017 IN THE CASE OF RATNAGIRI STAINLESS PVT .LTD ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 5 VS INCOME TAX OFFICER IN ITA NO.4463/MUM/2016 AS WE LL AS IN INCOME TAX OFFICER 5(3)(1) VS. M/S RBS COPPER PRODUCTS PVT .LTD. IN ITA NOS 1057 & 1058 DATED 04/07/2017. THEREFORE, IN LIGHT O F THE ABOVE DECISIONS, TAKING INTO ACCOUNT THE TOTALITY OF THE FACTS, IT W ILL BE REASONABLE TO ESTIMATE THE PROFIT EMBEDDED IN THE ACCOMMODATION ENTRIES OF BOGUS PURCHASES @12.5% OF THE PURCHASE AMOUNT. AS IT IS A N ESTIMATE OF THE PROFIT EMBEDDED IN PURCHASE, IT CANNOT BE SUBJECT T O ANY ADJUSTMENT ON ACCOUNT OF ANY SUBSEQUENT PROFIT ARISING FROM THE S ALE OF THE MATERIALS AS HELD BY THE HONBLE ITAT, MUMBAI BENCH IN THE DECIS ION IN ITA NO.6555/MUM/2017 FOR AY 2009-10 IN THE CASE OF M/S MUHTA MARKFIN (P) LIMITED VS ITO 5(2)(3) HAS HELD AS UNDER:- WE ARE OF THE CONSIDERED VIEW THAT AS THE PROFIT E LEMENT ACCOUNTED FOR BY THE ASSESSEE IN ITS REGULAR BOOKS OF ACCOUNTS PERTAINS TO THE PROFIT WHICH IT WOULD HAVE MADE FRO M SELLING THE GOODS UNDER CONSIDERATION, THEREFORE, THE SAME WOUL D HAVE NO BEARING ON THE QUALIFICATION OF THE MONETARY BENEFI T INVOLVED IN MAKING OF PURCHASES BY THE ASSESSEE AT A LOWER PRIC E FROM THE OPEN/GREY MARKET, AS IN COMPARISON TO PURCHASE MADE FROM REGISTERED DEALER. 8.19 IN VIEW OF THE ABOVE, THE PROFIT EMBEDDED IN THE ACCOMMODATION ENTRIES OF BOGUS PURCHASES AMOUNTING T RS. 35,95,47 9/- IS ESTIMATED @12.5% ON SUCH PURCHASES AND AN ADDITION OF RS. 4, 49,435/- IS SUSTAINED FOR AY 2010-11. THE APPELLANT GETS RELIEF OF RS. 2,98,425/- ( RS. 7,47,860/-) MINUS 4,49,435/-). 8.20. FOR AY 2011-12, THE PROFIT EMBEDDED IN THE A CCOMMODATION ENTRIES OF BOGUS PURCHASES AMOUNTING TO RS. 1,20,70 ,170/- IS ESTIMATED !12.5% ON SUCH PURCHASES AND AN ADDITION OF RS. 15, 08,771/- IS SUSTAINED FOR AY 2011-12. THE APPELLANT GETS RELIEF OF RS. 290,892/- (RS. 17,99,663/- MINUS 15,08,771/-). 8.21 ACCORDINGLY, ALL THE ABOVE GROUNDS OF APPEAL ARE PARTLY ALLOWED. 5. NONE APPEARED FOR THE ASSESSEE. WE HAVE HEARD TH E LD. DR, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE T HROUGH ORDERS OF THE AUTHORITIES BELOW. IN SOFAR AS LEGAL GROUND CHA LLENGING REOPENING OF ASSESSMENT, WE FIND THAT THE AO HAS REOPENED ASS ESSMENT ON THE BASIS OF FRESH MATERIALS IN FORM OF INFORMATION FROM DGIT(INV) WHICH WAS FURTHER SUPPORTED BY REPORT OF MVAT, DEPA RTMENT, GOVT. OF MAHARASTRHA WHICH CONSTITUTES FRESH MATERIAL TO FORM REASONABLE BELIEF OF ESCAPMENT OF INCOME. WE, THEREFORE ARE OF THE VIEW THAT ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 6 THERE IS NO MERIT IN LEGAL GROUND TAKEN BY THE ASSE SSEE CHALLENGING REOPENING ASSESSMENT AND HNCE, THE SAME IS REJECTED . 6. AS REGARDS ADDITIONS TOWARDS ALLEGED BOGUS PURC HASEE, WE FIND THAT THE LD. AO HAS MADE ADDITION OF 25% PROFI T LESS GROSS PROFIT DECLARED ON ALLEGED BOGUS PURCHASES ON THE GROUND T HAT THE ASSESSEE IS ONE OF THE BENEFICIARY OF ACCOMMODATION ENTRIES OF BOGUS PURCHASE BILLS ISSUED BY HAWALA DEALERS. ACCO RDING TO THE LD. AO, ALTHOUGH ASSESEE HAS FILED CERTAIN BASIC EVIDEN CES, BUT FAILED TO FILE FURTHER EVIDENCE IN THE BACKDROP OF CLEAR FIND ING BY THE SALES TAX DEPARTMENT, MAHARASHTRA THAT THOSE PARTIES ARE INVO LVED IN PROVIDING ACCOMMODATION ENTRIES WITHOUT ACTUAL DELIVERY OF GO ODS. THE LD. AO HAD ALSO TAKEN SUPPORT FROM THE INVESTIGATION CONDU CTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS PER WHICH NOTI CE ISSUED U/S 133(6) TO THE PARTIES WERE RETURNED UN-SERVED BY TH E POSTAL AUTHORITIES. THEREFORE, HE CAME TO THE CONCLUSION T HAT PURCHASES FROM THE SAID PARTIES ARE BOGUS IN NATURE. IT IS TH E CONTENTIONS OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES THAT PURCHASE S FROM THE ABOVE PARTY ARE SUPPORTED BY NECESSARY EVIDENCES. IT HAS FURNISHED ALL POSSIBLE EVIDENCES, INCLUDING BOOKS OF ACCOUNTS; ST OCK DETAILS AND BANK STATEMENT TO PROVE THAT PAYMENT AGAINST SAID P URCHASES HAVE BEEN MADE THROUGH PROPER BANKING CHANNELS. 7. HAVING CONSIDERED ARGUMENTS OF THE LD. DR AND AL SO, MATERIAL AVAILABLE ON RECORD, WE FIND THAT BOTH THE SIDES HA VE FAILED TO PROVE THE CASE IN THEIR FAVOUR WITH NECESSARY EVIDENCES. ALTHOUGH, ASSESSEE HAS FILED CERTAIN BASIC EVIDENCES, BUT FAI LED TO FILE FURTHER EVIDENCES TO CONCLUSIVELY PROVE PURCHASES TO THE SA TISFACTIONS OF THE LD.AO. FURTHER, MERE PAYMENT BY CHEQUE DOES NOT PRO VE THE ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 7 GENUINENESS OF PURCHASE, MORE PARTICULARLY WHEN OTH ER CIRCUMSTANTIAL EVIDENCE SAYS OTHERWISE. AT THE SAME TIME, THE LD. AO HAD ALSO FAILED TO TAKE THE INVESTIGATION TO A L OGICAL CONCLUSION BY CARRYING OUT NECESSARY ENQUIRES, BUT HE SOLELY RELI ED UPON INFORMATION RECEIVED FROM INVESTIGATION WING, WHICH WAS FURTHER SUPPORTED BY INFORMATION RECEIVED FROM MAHARASHTRA SALES TAX DEPARTMENT. THE AO NEITHER POINTED OUT ANY DESCREPA NICES IN BOOKS OF ACCOUNTS NOR MADE OUT A CASE OF SALES OUTSIDE BO OKS OF ACCOUNTS. IN FACT, THE AO DID NOT DISPUTED SALES DECLARED FOR THE YEAR. UNDER THESE CIRCUMSTANCES, IT IS DIFFICULT TO ACCEPT ARGU MENTS OF BOTH THE SIDES. FURTHER, IN A CASE WHERE PURCHASES ARE CONSI DERED TO BE PURCHASED FROM SUSPICIOUS/HAWALA DEALERS, VARIOUS H IGH COURTS AND TRIBUNALS HAD CONSIDERED AN IDENTICAL ISSUE IN LIGH T OF INVESTIGATION CARRIED OUT BY THE SALES TAX DEPARTMENT AND HELD TH AT IN CASE OF PURCHASES CLAIMS TO HAVE MADE FROM ALLEGED HAWALA D EALERS, ONLY PROFIT ELEMENT EMBEDDED IN THOSE PURCHASES NEEDS TO BE TAXED, BUT NOT TOTAL PURCHASE FROM THOSE PARTIES. THE HONBLE GUJARAT HIGH COURT, IN THE CASE OF CIT VS SIMITH P.SHETH 356 ITR 451 HAD CONSIDERED A SIMILAR ISSUE AND HELD THAT AT THE TIM E OF ESTIMATION OF PROFIT FROM ALLEGED BOGUS PURCHASES NO UNIFORM YARD STICKS COULD BE ADOPTED, BUT IT DEPENDS UPON FACTS OF EACH CASE. TH E ITAT, MUMBAI, IN NUMBER OF CASES HAD CONSIDERED AN IDENTICAL ISSU E AND DEPENDING UPON FACTS OF EACH CASE, DIRECTED THE LD.AO TO ESTI MATE GROSS PROFIT OF 10% TO 15% ON TOTAL ALLEGED BOGUS PURCHASES. IN THIS CASE, CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE THE LD. AO HAS MADE ADDITION OF 25% GROSS PROFIT LESS GP DECLARED BY THE ASSESSEE, WHEREAS THE LD. CIT(A) HAS SCALED DOWN AD DITIONS TO 12.50% PROFIT ON ALLEGED BOGUS PURCHASES. ALTHOUGH, BOTH AUTHORITIES HAVE TAKEN DIFFERENT RATE OF PROFIT FOR ESTIMATION OF INCOME ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 8 FROM ALLEGED BOGUS PURCHASE, BUT NO ONE COULD SUPPO RT SAID RATE OF GROSS PROFIT WITH NECESSARY EVIDENCES OR ANY COMPAR ABLE CASES. THEREFORE, CONSIDERING FACTS AND CIRCUMSTANCES OF T HIS CASE AND CONSISTENT WITH VIEW TAKEN BY THE CO-ORDINATE BENCH IN NUMBER OF CASES, WE ARE OF THE CONSIDERED OPINION THAT THE LD . CIT(A) HAS TAKEN A FAIR VIEW AND ESTIMATED 12.50% GROSS PROFIT ON A LLEGED BOGUS PURCHASES TO SETTLE DISPUTE BETWEEN THE PARTIES AND HENCE, WE ARE INCLINED TO UPHOLD ORDER OF THE LD. CIT(A) AND DISM ISS APPEAL FILED BY THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE ASSESEE IS DI SMISSED. ITA NO.968/MUM/2019:- 9. THE FACTS AND ISSUES INVOLVED IN THIS APPEAL ARE IDENTICAL TO THE FACTS AND ISSUES, WHICH WE HAD CONSIDERED IN ITA NO . 967/MUM/2019 FOR AY 2009-10. THE REASONS GIVEN BY U S IN PRECEDING PARAGRAPHS IN ITA NO. 967/MUM/2019 FOR AY 2009-10 SHALL MUTATIS MUTANDIS APPLY TO THIS APPEAL, AS WELL. THEREFORE, FOR SIMILAR REASONS, WE ARE INCLINED TO UPHOLD THE FIND INGS OF THE LD.CIT(A) AND DISMISS APPEAL FILED BY THE ASSESSEE . 10. IN THE RESULT, BOTH APPEALS FILED BY THE ASSES SEE FOR AYS 2009-10 AND 2011-12 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 /02/ 2020 ITA NOS.967 & 968/MUM/2019 KARTEEK FERROMET PVT.LTD. 9 SD/- ( SAKTIJIT DEY ) SD/- ( G. MANJUNATHA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 14/02/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//