ASST CIT CIR 6(2)(2), MUMBAI vs. EXIM TRADE LINKS (INDIA) P.LTD, MUMBAI

2. "On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that during the course of the assessment proceedings the assessee failed to furnish various details called for by the AO, that is whether parties from whom the above purchases were made were genuine and existed and were not mere entry providers, as recorded by the A.O. in para 6.9 of the order.

Rival contentions have been heard and record perused.

Facts in brief are that on the basis of information from sales tax department, the AO added entire amount of alleged bogus purchases amounting to Rs.56.56 lakhs. 5. By the impugned order, CIT(A) restricted the addition to the extent of 12.5% after having the following observation:- I have carefully perused the assessment order and the appellant's written submission. During the course of appellate hearing, that the appellant submitted all ledger accounts of the conceited parties, sale and purchase bills, delivery challans, details of transportation, the supporting vouchers and copy of bank statements. It is seen that nothing has been brought out on record by the A.O. to prove that the purchases are bogus. The A.O. is also ignoring, the fact that corresponding sales have been reflected in the books and A.O. has not negated this finding. Reliance is placed on the following judicial decisions of Hon. Apex Court, Hon. Gujarat High Court, Hon. Mumbai High Court and Hon. Mumbai IT AT wherein the Hon. High Courts, Hon. IT AT and Hon. Supreme Court has opined and deleted the additions in cases of bogus purchases :

Hon. Mumbai High Court decision in the case of Babulal C. Borana Vs ITO (2006) 282 ITR 251.

Hon. Gujarat High Court decision in case of CIT Vs MX Bros (1987) 163 ITR 249 11. Hon. Gujarat High Court decision in case of CIT Vs Nangalia Fabrics P. Ltd. (2014) 220 Taxman 17 12. Hon. Mumbai ITAT judgment date 17.6.2016 in the case of M/s. Om Shree International Vs ACIT in and ITA No. 4575/M/2012. 13. Kishanchand Chelaram Vs. CIT-125 ITR 713-SC. 14. H.R. Mehta Vs ACIT in ITA No.58 of 2001 (Bom) 15. CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. [372 ITR 619 (Bom)2015] 16. ACIT Vs. Ramila Pravin Shah (ITA I fo.5246/Mum/2013) 17. ACIT Vs.Tristar Jewellery Exports Pi. Ltd. (ITA No.7593/Mum/20ll) 18. ITO Vs. Deepak Popatlal Gala (I A No.5920/Mum/2013 and ITA No.6203/Mum/2013) 19. DCIT Vs.Rajiv G.Kalathil (ITA No.6,27/Mum/2012/RGR 20. Ramesh Kumar & Co. Vs. ACIT in ITA No.2959/MUM/2014 dt.28.11.2014. 21. Shri.Ganpatraj A.Sanghavi Vs. ACIT. in ITA No.2826/Mum/2013 dt.5.11.2014. 22. West Coast Paper Mills Vs.JCIT[100 TTJ 833(Mum)] 23. ITOVs.A.CExport[13DTR98(Mum) 24. Unitex Products [22 SOT 429(Mum)], • 25. Teletronics Dealing System Pvt, Ltd. 53 Taxmann.com20(Mum)]. 26. Free India Assurance Services Ltd. Vs. DCIT(132 ITD 60) Mumbai Tribunal. 27. Balaji Textiles Industries Pvt. Ltd.[49 ITD 177 (Mum).] Perusal of the appellant's written submission shows that the appellant has stated in Para 4 Page 9 as under;- "The appellant would also like to submit that at, per order u/s.l43(3) r.w.s.147 of the Income Tax Act, 1961 for A.Y. 2008-2009, the Ld. AO. has disallowed on alleged hawala purchases to the extent of 12.5% of the total purchase ,amount i.e. Rs.46,45,760/-. 12.5% is\ the proportion of additional profit on unapproved/non genuine purchases and added to the total income returned. Thus Without prejudice, following the principle of consistency, disallowance for above referred assessment year should be taken at 12.5% of the total purchase amount i.e. Rs.56,56,092/-," So the A.O. is directed to disallow only 12.5% of Rs.56,56,092/- as bogus purchases. Ground of Appeal No.l is partly allowed.