Tribunal limits purchase addition, shifts burden of proof to Assessing Officer.

The tribunal allowed the appeal in part, directing the Assessing Officer to restrict the addition to 5% of the purchases. The tribunal found that the assessee had demonstrated the sales of the alleged bogus purchases, shifting the burden of proof to the AO. The decision served the ends of justice, with the tribunal pronouncing the order on 16/05/2017.

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Issues:
1. Addition of alleged non-genuine purchases
2. Reopening of assessment
3. Burden of proof on the Assessing Officer

Analysis:
1. The appeal was filed against the order of CIT(A) confirming the addition of Rs. 2,99,134 on account of profit on alleged non-genuine purchases. The AO added 10.11% profit on purchases of Rs. 29,58,797. The CIT(A) partly confirmed the AO's action, leading to the appeal before the tribunal.

2. The tribunal examined the reasons for reopening the assessment and found that the AO correctly reopened it due to the escapement of income. During reassessment, it was discovered that the assessee had made bogus purchases, leading to an addition of 12.5% by the AO. The CIT(A) restricted the addition to 10.11%, which was further contested by the assessee.

3. The assessee provided various documents during the assessment proceedings to substantiate the genuineness of purchases. These included purchase bills, ledger accounts, bank statements, audit reports, and more. The tribunal noted that the primary onus was on the appellant to prove the genuineness of purchases, which was discharged by providing substantial evidence. The tribunal emphasized that the burden of proof then shifted to the Assessing Officer to disprove the authenticity of the documents.

4. Ultimately, the tribunal found that the assessee had demonstrated the sales of the alleged bogus purchases. Considering the nature of the business and the overall circumstances, the tribunal directed the AO to restrict the addition to 5% of the purchases, serving the ends of justice. As a result, the appeal of the assessee was allowed in part, with the tribunal pronouncing the order on 16/05/2017.

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