ITO 20(3)(5), MUMBAI vs. VISION ENTERPRISES, MUMBAI

आदेश / O R D E R

Per Sandeep Gosain, Judicial Member:

3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has failed to appreciate that the hawala dealers have admitted on oath before the Sales Tax Authorities that they not sold any material to anybody."

Vision Enterprises 2. At the very outset, it is noticed that none has appeared on behalf of assessee and even no application for adjournment was moved. On the other hand Ld. DR is present in the court and is ready with arguments. Therefore we have decided to proceed with the hearing of the case ex-parte with the assistance of the Ld. DR and the material on record.

Vision Enterprises Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee. Now before us, the revenue has preferred the appeal by raising the above grounds.

Ground No. 1 to 4. 4. All the grounds raised by the revenue are inter connected and inter related and relates to challenging the order of CIT(A) in restricting the additions to 5.18% of the bogus purchases from hawala parties, therefore we thought it fit to dispose of the same thorough this common order.

5. We have heard Ld. DR and we have also perused the material placed on record as well as the orders passed by revenue authorities. We find that Ld. CIT(A) after appreciating the facts of the present case has categorically held that the assessee is not in a position to prove the existence of the supplier and there is enough circumstantial evidence casting doubt on the nature of the transaction. The Ld. CIT(A) has not controverted the fact that the assessee has taken only accommodation bills for explaining the Vision Enterprises purchases and at the same time ld .CIT(A) restricted the additions @ 5.18% by estimating profit on the total bogus purchases. Therefore cosindering the peculiar facts and circumstances of the present case and while relying upon the following judgments:- 1) ClT vs Bholanath Poly Fab Ltd. (2013) 355 ITR 290 (Guj). (HC),

2. CIT v Simit D, Sheth (2013) 356 ITR 451 (Guj)-(HC) and 3. CIT vs. Sanjay Oil Cake Industries (2009) 316 ITR 274 (Guj) (1C) and taking into consideration the facts of the present case, and to account for the profit element embedded in these purchase transactions to factorize profit earned by assessee against purchase of material in the grey market and undue benefit of VAT against bogus purchases, we are of the considered view that restricting the additions @ 5.18% of purchases by Ld. CIT(A) is unreasonable. The ends of justice would be met in case the additions are restricted @ 12.5 % of bogus purchases. Consequently orders passed by Ld. CIT(A) are set aside. Hence we direct the AO to restrict the additions to the extent of 12.5% of the bogus purchases made from the parties. Accordingly this ground raised by the revenue is partly allowed.