Per G Manjunatha, AM : This appeal filed by the revenue is directed against the order of the CIT(A)-30, Mumbai dated 30-01-2017 and it pertains to Ay 2009-10. The revenue has raised the following grounds of appeal:-

1 "On the facts and circumstances of the case and in law, whether the Ld.CTT(A) was justified in sustaining only an addition @12.5% profit rate on total purchases of Rs.71,19,439/-made from 13 parties of a group concern of M/s Bhanwarlal group of companies, who were in the business of providing accommodation entries as established by the investigation wing consequent to search action u/s 132 of the I. T.Act. 1961" ITA 2457/Mum/2017 2 "On the facts and circumstances of the case and in law, whether the Ld. CTT(A) was justified in sustaining only an addition@12.5% profit rate on total purchases of Rs.71,19,439/-made from 13 parties as the assessee failed to prove the genuineness of said purchases when by AO to provide day wise stock register & details of sales corresponding the said purchases" 3 The appellant prays that the order of the Learned CFT(A) on the above grounds be set -side and that oftheAO be restored.

2. The brief facts of the case are that the assessee is engaged in the business of trading in ferrous and non ferrous metals under the name and style M/s Rajendra Steel & Alloys, filed his return of income for AY 2009-10 on 30- 09-2009 declaring total income of Rs.2,09,450. Subsequently, the assessment has been reopened u/s 147 of the, on the basis of information received from the DGIT(Inv), Mumbai as per which the assessee is one of the beneficiaries of accommodation entries provided by certain hawala dealers / suspicious dealers as per the report of Sales-tax department. The case has been selected for scrutiny and the assessment has been completed u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 on 13-03-2015 where the AO, after considering relevant submissions of the assessee and also taking note of information gathered during the course of assessment proceedings, made addition towards total purchases from certain parties u/s 69C of the. The relevant observations of the AO are as under:-

6.1 In the circumstances, following the principle of natural justice, the asses see was given an opportunity for establishing the genuineness of these parties and the purchases made from them with adequate supporting evidences and also requested to produce the parties before the undersigned along with their books of accounts as these parties were ITA 2457/Mum/2017 found to be prima facie non-existent. However, the assessee could not produce these parties nor furnish any new addresses of these parties but simply furnished ledger accounts in the books of the assessee, copies of purchase bills and his bank statement showing the payment made through bank. Under the above circumstances, the assessee was asked to explain as to why the purchases shown to have made from the aforesaid non genuine dealers should not be treated as unexplained expenditure and the same should not be added to the total income of the assessee, as the identity of said parties could not be established and the genuineness of the transactions was not proved. The Assessee was also asked to explain why the book results should not be rejected U/s 145(3) of the.

6.2 In response, the AR of the assessee contended that he has submitted copy of purchase bills received from above said parties & copy of bank statement covering payment made to above said parties to prove genuineness of purchase parties.

6.3 It is a settled position in law that, when an expenditure is claimed to have been incurred and debited to the Trading/ Profit & Loss Account, the onus is on the assessee to substantiate and prove the genuineness of the claim and the commercial expediency of incurring such expenditure, Furthermore, it may be submitted at this stage itself that the sales tax department of Maharashtra Government has been involved in detailed investigation in the affairs of dealers who have been issuing bogus purchase bills and as a result thereof, , publicly displayed a list of of nearly persons/dealers on the website of the sales tax department, who have admitted to issuing non genuine purchase bills showing sales. As the notices U/s. 133(6) were returned back by the postal authorities, the assessee was given opportunity to produce the said parties. Inspite of having been provided specific opportunity, the assessee could not produce the above said parties with the documents called for from the said parties nor furnish their new addresses.

6.4 The submissions made by the AR of the assessee have been carefully examined. It may however be stressed here that the Sales Tax information, about hawala billers is not considered as the sole basis and the investigation has also been carried out under the Income Tax Act, 1961 and the assessee was duly confronted with the same. Evidently, the assessee had adopted a modus operandi to decrease its true profits by inflating its expenses including purchase expenses by taking accommodation entries from such hawala parties.

6.5 Especially, in the light of categorical admission by alleged sellers before the Sales Tax department regarding issuing of bogus purchase and sale bills, the documents including the purchase bills or bank statements do not prove the genuineness of the parties. Merely filing the copy of purchase bills is not sufficient to prove the genuineness of the parties and also considering the fact that, no response has been received from the above said hawala parties, in ITA 2457/Mum/2017 response to the information called for U/s. 133(6) of the,1961. Therefore, the genuineness of the said parties was not proved by the assessee.

6.6 The AR of the assessee has stated that the stock register is not maintained. The assessee is neither able to produce the parties nor he is able to provide the whereabouts of the said parties. The assessee is also unable to provide any other proof like delivery challans, detailed stock register having specific inward and outward entries, any other documents/submissions for substantiating the genuineness of the said transactions.

6.7 The submission/details furnished by the assesse have been carefully perused and considered, but not accepted. Since, all the above said hawala parties have confessed in the statement recorded on oath before Sales tax Authorities that they have not done any genuine business as well as there was no actual delivery of goods to the purchase parties . The onus is always on the assessee to evidently prove before the Assessing officer that what he stated /accounted in his books of accounts is true as well as genuine. Accordingly, considering the nature of business, the assesse should have produced the parties along with the inward stock register 8& outward stock register, correlating the said purchases with subsequent sales etc. However, the assessee has failed to prove the onus relied upon him by producing the aforesaid particulars. The above discussion can be summarized as follows: (i) The Sales Tax Department has conducted independent enquires in each of the non-genuine Parties and conclusively proved that these parties are engaged in the business of providing accommodation entries only. The parties are issuing bills without delivering any goods and services. (li) Independent enquiries / investigations have been carried out by this office under the I. T. Act and the assessee has been duly confronted with the same. Evidently, the assessee had adopted a modus operandi to reduce his true profits by inflating expenses including purchase expenses by taking accommodation entries from such parties. (iii) The assessee was asked to produce the said non-genuine dealers for examination, but the assessee failed to do so. Thus, in the books of accounts of the assessee, the purchases to the extent made from the above said parties remained unverifiable and hence I arrive at a conclusion that the purchases shown by the assessee in the books of accounts are inflated and non-genuine purchases are debited to trading account to suppress the true profits to be disclosed to the department. (iv) The assessee could not file the vital documents such as delivery challans, transport receipts, octroi receipt for payment of Octroi duty, receipt of weighbridge for weighing of goods, excise gate pass, goods inward register maintained at godown/ warehouse/ storage house etc. Whatever documents placed on record is not capable of sustenance. The items shown to have purchased from the said parties are of such in nature that they require separate transportation. Hence the mode of transportation is not explained properly. (v) The onus was upon the assessee to establish the genuineness of purchases made by the assessee. ITA 2457/Mum/2017 (vi) Mere filing of evidences in support of purchases and payment through account payee cheque cannot be conclusive in a case where genuineness of transaction is in doubt. : : (vii) The contention that the payments are made by account payee cheque is not a full proof method of substantiating the assessees claim, as it was already accepted by the persons, who have given statement, deposition of affidavit before the Sales tax authorities that cash is given back after deduction of commission/ brokerage once the cheque is realized. Hence, payment by account payee cheques itself is not sacrosanct. (viii) The Sales Tax Department certified that the aforesaid parties are non- genuine operators after conducting independent enquiries. It is evident that the assessee did not make any effort to confront the finding recorded by the DGIT(Inv.) and it made no efforts to produce the seller parties. (ix) If all the evidences point to the fact that no actual goods were supplied by the above parties, then the argument of assessee that it . purchased goods in good faith is not tenable.

6.8 The above discussions are leading to the following facts : (a) The said purchase parties were non-existent at the address provided. Inspite of providing opportunity, the assessee has neither produced the said : parties nor provide the whereabouts of the said parties. . (b) The assessee has failed to discharge the onus of proving the genuineness of purchases. This view is supported by the decision of Honble Raj. High Court of India (2002) 178 CTR (Raj) 420 MP High Court in the case of VISP(P) vs. CIT Indore (2004) 186 CTR 218 (MP). (c) The payment made by account payee cheque itself is not sacrosanct and it would not make an otherwise non-genuine transaction into a genuine transaction as held by the Calcutta High Court in the case of CIT Vs Prashant (P) (1994) 121 CTR (Cal) 20 and the view was supported by the Hon^ble ITAT, Jaipur in the case of M/s Kachwala Gems vs. JCIT ITA No 134/ JP /2002 dt. 10.12.2003 and affirmed by the Supreme Court in the case of M/s. Kachwala Gems vs. JCIT (2006) 206 CTR (SC) 585, 288 ITR 10 (SC). (d) The genuineness of transaction is not proved on the basis of primary facts on record. In this case there is uncontroverted evidence from an impeccable source which has the primary duty of taxing a purchase-sale transaction in the form of admission of the so-called seller about issuing bogus bills of purchase/sale which was held in the case of CIT vs Golcha properties Pvt. Ltd. (in liquidation) (1996) 136 CTR 222 (Raj.) it is held that the Department is not required to lead a clinching evidence to prove that purchases are bogus.

6.9 Therefore, considering the material on record, conclusion can be drawn on relying on the judgment of Delhi High Court in the case of CIT vs La Medica, 117 Taxman 628 (2001). In this case, the assessee was a manufacturer of allopathic medicines. The ITO treated certain purchases of the assessee as bogus as the genuineness of these parties could not be ITA 2457/Mum/2017 proved by the assessee. The Court noted that the alleged sellers have been found to be persons wither means efiect purchases pr to carry, on business. Once it is accepted that the supplies were not made by the bogus party to whom payments were alleged to have been made, the question whether the purchases were made from some other source ought not to have weighed with the Tribunal as a factor in favour of the assessee. The court thus confirmed the addition made by the Assessing Officer.

6. 10 Reliance is also placed on the judgement of Honble High court(Kerala) in the case of Sree Rajvel & Co. v. Commissioner of Income tax, 268 ITR 267 (kerala)(2003). Where in the assessee had made gross purchase of copra and sold completely to the sister concern only, but, there is a difference in the quantity purchased and sold. There was no possibility of any driage when the copra purchased on particular day was transferred to the sister concern on the same day or the next day, and so difference must have been accounted by the assessee as bogus purchases. The difference in the quant.ity is considered as bogus purchases from Karukaran & sons and of other sundry parties. Honble High court has held that it is not disputed that Shri karunakaran & sons were regular suppliers of copra to the assessee. When the assessing officer finds that there was no such purchase, the onus was on the assessee to rebut that finding and prove that in spite of the denial by the persons concerned, there was infact such purchases effected from them. But, instead of making any attempt to prove that there were genuine purchases, the assessee was not bothered as to whether they had accounted for the sales or not.

6. 1 1 After carefully going through the legal instances available on this issue the onus lay upon the assessee to prove the genuineness of the transaction when it claimed that the purchases are genuine. From the above case laws and the discussion on investigation, it is crystal clear that: (a) The primary onus is on the assessee to establish the genuineness of the purchases claimed by it; (b) Since the primary facts are in the knowledge of the assessee it is his duty to produce the alleged supplier with the confirmation; (c) If the investigation done by the Department leads to doubt regarding the genuineness of the purchases it is incumbent on the assessee to produce the parties along with necessary documents to establish the genuineness of the transaction. (d) Payment by account payee cheque itself is not sacrosanct.

6.12 Thus, in sum, from analysis of the facts in the case of assessee it is crystal clear that the purchases made by the assessee from the aforesaid parties which were claimed in its profit & Loss account are not genuine. Their names also appear in the list of Hawala dealers put up on the website by the Maharashtra Sales Tax Department. The facts indicate that the suspected sales tax hawala parties are non genuine business organizations and never supplied any material to the assessee or any other persons and therefore the purchases made from the said parties are not genuine. ITA 2457/Mum/2017 Therefore, from the facts, material and evidence brought on record, it is absolutely clear that the onus on the assessee to prove the genuineness of the said purchases is not fulfilled by the assessee. Since the purchases to that extent remain unverifiable, I am not satisfied about the correctness and completeness of the accounts of the assessee. I, therefore, reject the books of accounts of the assessee by invoking the provisions of section 145(3) of the I.T. Act.

6.13 In view of the above discussion and relying on the above case laws, the non genuine purchases of Rs. 71,19,439/- are treated as unexplained expenditure incurred by the assessee during the year and this amount is added to the total income of the assessee. Penalty proceedings U/s. 271(l)(c) of the are separately initiated against the assessee for furnishing inaccurate particulars leading to concealment of income.

3. Aggrieved by the assessment order, assessee preferred appeal before the CIT(A). Before the CIT(A), assessee has filed elaborate written submissions on the issue which has been reproduced at para 4 on pages 4 to 6 of order Ld.CIT(A). The sum and substance of arguments of the assessee before the Ld.CIT(A) are that purchases from the parties are supported by necessary evidence including purchase bills and payments for such purchases have been made through proper banking channels. The AO has made addition only on the basis of report of DGIT (Inv) which is further supported by information collected from sales-tax department ignoring all evidences filed by the assessee during the course of assessment proceedings. Although, the AO has issued 133(6) notices to parties, but service of notice and attendance to such notices was not within the knowledge of the assessee because non availability of the parties after a lapse of six years cannot be attributed to the assessee. The Ld.CIT(A), after considering relevant submissions of the assessee and also ITA 2457/Mum/2017 by relying upon various judicial precedents including the decision of Honble Gujarat High Court in the case of CIT vs Simit P Sheth (2013) 356 ITR 451 (Guj) scaled down addition made by the AO towards alleged bogus purchases to 12.5% of such purchases. The relevant observations of the Ld.CIT(A) are as under:-

8.3 I have carefully considered the rival contentions on the issue on hand. On perusal of the material on record it is noticed that, in the appellants case, Ld. AO, made independent verifications by issuing notices u/s. 133(6) of the, which were returned unserved, and there was an overwhelming evidence in the form of statements of some of the suppliers given before the Sales tax authorities that it was engaged only in issuing hawala bills and no goods were ever supplied by them. ,

8.4 After weighing the evidence pros and con, 1 find that the appel/ant has not reconciled the purchases with the items sold and failed to reconcile 1:1 of the 1 items purchased and sold. Onus was always on the appellant to prove as to how the material purchased was firstly obtained. I record a finding of fact here that no proof of delivery of purchases has been filed either before the Ld. AO or before me. During the present proceedings also, one more opportunity was given to the AR, who was asked to produce the parties for verification before the AO and in response, AR expressed his inability to do so. Thus, it can be safely presumed that either they are non-existent or even if they do exist, they were not backed by sufficient evidence to undergo the test of scrutiny.

8.5 The suppliers were in fact the appellants witness and the Ld. AO was not required to force their attendance. It was for the appellant to produce them as per Civil Procedure Code which applies on all fours to the income-tax proceedrngs. It is trite that once a transaction is shown to be of the nature of income, the onus shifts to the assessee to show that the same was not taxable. It can thus be safely assumed that the appellant has grossly failed in its duty to mitigate the burden cast upon it in so far as proving the genuineness of the transaction from the said party is concerned.

8.6 In this regard it is also pertinent to mention that while dealing with the concept of burden of proof, onus of proving is always on the person who makes the claim and not on the Revenue. While dealing with the issue of deciding the burden of proof, Honble Supreme Court in the cases of CIT Vs. ITA 2457/Mum/2017 Durgaprasad More 82 UR 540 and Sumati Dayal Vs. CIT 214 ITR 801 has held that the apparent must be considered real until it is shown that there are reasons to believe that the apparent is not real and that Taxing Authorities are entitled to look into surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. The Honble court also held that, it is no doubt, true that in all cases in which a receipt is sought to be taxed as income, the burden lies on the department to prove that it is within the taxing provision and if a receipt is in the nature of income, the: burden to prove that it is not taxable because it falls within exemption provided by the, lies upon the assessee. In the case of Durgaprasad More (Supra), the Honble Court went on to add that a party who relies on a recital in a Deed has to establish the truth of this recital, otherwise it will be very easy to make self serving statements in documents either executed or taken by a party who relied on those recitals. If all that an assessee who wants to evade tax has to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. The Honble Court further held that the Taxing Authorities were, not required to put on blinkers while looking at the documents produced before them. They were entitled to look in to the surrounding circumstances to find out the reality of the recitals made in those documents. .

8.7 The onus to prove that apparent, is not the real one, is on the party who claims it to be so, as held by the Honble Supreme Court in the case of CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349and CIT v. Durga Prasad More (supra).It is also a > settled legal proposition that if no evidence is given by the party on whom the burden is cast, the issue must be found against him. Therefore, onus is always on a person who asserts a proposition or fact, which is not self evident. The onus, as a determining factor of: the whole case can only arise if the Tribunal, which is vested with the authority to determine, finally all questions of fact, finds the evidence pro & con, so balanced that it-can come to no conclusion; then, then the onus will determine the matter. There cannot be any doubt that onus as a determining factor comes into play where, either there is no evidence on either side, or where it is equally worthless or where it is equally balanced. It is imperative to mention here that where such is not the case and all available evidence is considered, without reference to the onus and without relying on the circumstances that onus lies on a particular party, the issue is determined on facts and the onus cannot be said to have influenced the decisions. However, in the instant case, the appellant has miserably failed to lead evidence and hence, onus is a determining factor. ITA 2457/Mum/2017

8.8 With regard to the claim of the appellant that the parties are not offered for cross-examination by the appellant, it is to be noted that the right of cross-examination is not automatic, but it would be incumbent only in a situation where the appellant is able to prima facie demonstrate that the onus cast on him to establish his version of affairs is based on primary evidence. In this case, the appellant had failed to lead any primary evidence, viz. GRNs, octroi receipts, deliver/ challanrs, etc. which would show that the supplies were indeed made. In such a situation, the AO is justified in drawing the inference that the purchases aggregating to 71,19,439/- are not genuine. As regards the issue of the denial of the cross examination, in the case of GTC Industries Ltd. vs. Assistant Commissioner of Income-tax [1998] 65 ITD 380 (BOM), it was held as under: . "105. In our opinion right to cross-examine the witness who made adverse report, is not an invariable attribute of the requirement of the dictum, "audlalterampartem. The principles of natural justice do not requireformal cross-examination. Formal cross-examination is a part of procedural justice. It is governed by the rules of evidence, and is the creation of Court. It is part of legal and statutory justice, and not a part of natural justice, therefore, it cannot be laid down as a general proposition of law that the revenue cannot rely on any evidence which has not been subjected to cross-examination."

8.9 Coming to the issue of bogus purchases made from the thirteen parties, Ld, AO stated in the assessment order that parties in question are non-existent and the transactions entered with them are non- genuine transactions. In view of the same, AO rejected the books of accounts of the appellant and the total amount of purchases made from those thirteen parties was added to the total income. When the completeness and correctness of the books of accounts is questioned and the books of account we rejected, instead of adding the profit element embedded in such purchases Though the purchases are shown to have been made by making payment thereof by account payee cheques, the cheques have been deposited in hank accounts ostensibly in the name of the apparent sellers, thereafter the entire amounts have been withdrawn by bearer cheques and there is no trace or identity of the person withdrawing the amount from the bank accounts. In the light of the aforesaid nature of evidence it is not possible to record a different conclusion, different from the one recorded by the Commissioner (Appeals) and the Tribunal concurrently holding that the apparent sellers were not genuine, or were acting as conduit between the assessee-firm and the actual sellers of the raw materials. Both the Commissioner (Appeals) and the Tribunal have, therefore, come to the conclusion that in such circumstances, the likelihood of the purchase price being inflated cannot be ruled out and there is no material to dislodge such finding. The issue is not whether the purchase price reflected in the books of account matches the purchase price stated to have been paid to other persons. The issue is ITA 2457/Mum/2017 whether the purchase price paid by the assessee is reflected as receipts by the recipients. The assessee has, by set of evidence available on record, made it possible for the recipients not being traceable for the purpose of inquiry as to whether the payments made by the assessee have been actually received by the apparent sellers. Hence, the estimate made by the two appellate authorities does not warrant interference. Even otherwise, whether the estimate should be at a . particular sum or at a different sum, can never be an issue of law.

8.12 Similarly, in yet another decision of Honble Gujarat High Court in the case of CIT vs. Simit Sheth (2013) 38 Taxmann.com 385 (Guj), Honble Court was seized with a similar issue where the AO had found that some of the alleged suppliers of steel to the assessee had not supplied any goods but had only provided sale bills and hence, purchases from the said parties were heid to be bogus. The AO, in that case ,added the entire amount of purchases to gross profit of the assessee. Ld. CIT(A) havinq found that the assessee had indeed purchased though not from named parties but other parties from grey market, partially sustained the addition as probable profit of the assessee. The Tribunal however, sustained the addition to the extent of 12.5%. Taking into account the above facts, the Honble Gujarat High Court held that since the purchases were not bogus, but were made from parties other than those mentioned in books of accounts, only the profit element embedded in such purchases could be added to the assessees income and as such no question of law arose in such estimation. While arriving at the above conclusion, the Honble Court also relied on the decision in the case of Vijay M. Mistry Construction Ltd. 355 ITR 498 (Guj) and further approved the decision of Ahmedabad Bench, ITAT in the case of Vijay, Proteins 58 ITD 428.

8.13 The motive behind obtaining bogus bills thus, appears to be inflation of purchase price so as to suppress true profits. Considering the facts of the case as well as the various case laws cited (supra) and also considering the fact that the appellant . himself made the alternative plea in the submissions that profit element embedded on such purchases should be considered for addition instead of adding the total amount of purchases, I feel that if profit element embedded on such purchases is added to the total income, that will meet the ends of justice.

8.14. The facts and the line of business of the present case are very much similar to the facts of the case decided by the Honble Gujarat High Court of CIT vs. Simit P. Sheth (supra). In view of the same, respectfully following the decision in that case with regard to the estimation of profit, AO is directed to restrict the addition to 12.5% of the non-genuine purchases of ^ 71,19,439/-, made from the said thirteen parties. Accordingly, Ground No. 3 to 5 raised on the issue of bogus purchases is treated as Partly Allowed. ITA 2457/Mum/2017

4. The Ld.DR submitted that the Ld.CIT(A) was erred in sustaining only 12.5% profit rate on total alleged bogus purchases of Rs.71,19,439 made from 13 parties of a group concern of M/s Bhanwarlal Jain group of companies, ignoring the fact that those companies are involved in providing accommodation entries as per the admission of Shri Bhanwarlal Jain and his associates during the course of investigation u/s 132(4) of the. The Ld.DR further submitted that the AO has brought out clear facts in light of report of DGIT(Inv) and report of sales-tax department, but the Ld.CIT(A) brushed aside observations of the AO without assigning any reasons as to how purchases from those parties are genuine which are supported by necessary evidence.

5. None appeared on behalf of the assessee.

6. We have heard the Ld.DR and perused the material available on record alongwith the orders of the lower authorities. The AO has made addition towards alleged bogus purchases on the ground that the assessee has failed to file necessary evidence to justify purchases in the backdrop of clear findings from the DGIT (Inv), Mumbai which was further supported by the report of sales-tax department. The AO has also taken support from the fact that 133(6) notices issued to the parties were returned unserved. Therefore, he came to the conclusion that purchases from the parties belonging to Shri Bhanwarlal Jain group of companies are bogus in nature which are not supported by ITA 2457/Mum/2017 necessary evidence. It was the claim of the assessee before the lower authorities that purchases from parties belonging to Shri Bhanwarlal Jain group and associates are supported by necessary evidence and payment against such purchases have been made through proper banking channel. The AO neither pointed out any discrepancy in books of account or stock register filed for the relevant year nor made out a case of sales outside the books of account. In absence of any incorrectness in books of account, no adverse inference could be drawn so as to treat purchases from certain parties only for the reason that the names of said parties were appearing in the list of hawala dealers prepared by the sales-tax department. The assessee also contested the observation of the AO with regard to non service of 133(6) notices and argued that service of notices and attendance of such parties was not within the control of the assessee, that too, after a lapse of six years. Therefore, only on that basis, no adverse inference could be drawn.

7. Having considered relevant materials on record, we find that both sides failed to make out a case in their favour with necessary evidence so as to reach to a conclusion that purchases from above parties are non genuine. Although the AO has conducted necessary enquiries to ascertain correct nature of purchases by issuing 133(6) notices, but the parties neither attended nor filed any details. Therefore, merely for the reason of non service of notice / non ITA 2457/Mum/2017 attendance by the parties, no adverse inference can be drawn so as to treat purchases from the above parties when the assessee has filed complete details including purchase bills and stock details to justify above purchases. It is not the case of the AO that the books of account maintained by the assessee are not susceptible to verification. There is no observation regarding incorrectness in books of account or sales outside the books. Under these facts, it is very difficult to accept arguments of the AO as well as the assessee to hold that purchases from the above parties are fully supported by necessary evidence; hence, we are of the considered view that in order to settle the dispute between the parties, a reasonable percentage of profit needs to be estimated on alleged bogus purchases. The Honble Gujarat High Court in the case of CIT vs Simit P Sheth (supra) held that where the purchases considered to be bogus, then profit element embedded in those purchases needs to be taxed and such profit percentage depends upon facts of each case. The co- ordinate benches of Mumbai Tribunal, in a number of cases, have taken a consistent view and directed the AO to estimate profit of 12.5% to 15% depending upon facts of each case. In this case, the assessee is in the business of trading in ferrous and non ferrous metals. The Ld.CIT(A), considering the nature of business of the assessee and other facts has scaled down addition made by the AO towards bogus purchases to 12.5% of such purchases. We do ITA 2457/Mum/2017 not find any error in the order of the Ld.CIT(A); hence, we are inclined to uphold findings of Ld.CIT(A) and dismiss appeal filed by the revenue.

8. In the result, appeal filed by the revenue is dismissed. Order pronounced in the open court on 24-05-2019. Sd/- sd/- (Sandeep Gosain) (G Manjunatha) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dt : 24 th May, 2019 Pk/- Copy to :

1. Appellant

2. Respondent

3. CIT(A)

4. CIT

5. DR /True copy/ By order Asstt. Registrar, ITAT, Mumbai