TaxTMI 
TaxTMI 
2014 (6) TMI 605
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....urchases to the extent of Rs. 24,05,035/- by treating them as non- genuine purchases. The appellant prays that the addition made on account of non-genuine purchases being unwanted, unwarranted, bad in law, illegal be deleted. ALTERNATE GROUND NO : II :- GROUND II:- On the facts and in the circumstances of the case, the appellant without prejudice to the earlier Grounds alternatively prays that the Assessing Officer may be directed to make a further addition based on Net Profit Margin @ 10% of the alledged non genuine purchases in view of non verifiability. The appellant prays that the addition made on account of non-genuine purchases being unwanted, unwarranted, bad in law, illegal be suitably reduced based in Net Profit Margin shown in....
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....AO from the said part. Accordingly the AO treated the purchase from these two parties as bogus and consequently the purchases from these two parties amounting to Rs. 24,05,035/- is added to the total income of the assessee. 4. On appeal, the assessee submitted before CIT(A) that the purchases made from these parties were genuine as the goods were supplied by these parties against the duly issued invoice. It was further contended that as per the Government of Maharashtra Sales Tax Department N B Enterprises was not shown as "Hawala Dealer" for the year ended 31.03.2009 and was actively filing six monthly returns in time and duly paid the VAT. The confirmation was also filed from M/s Excellent Aluminium Centre saying that they have supplied ....
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.... parties is otherwise not justified when the assessee's net profit margin is more than the prevailing margin rate in the industry. Thus the Ld. AR has pleaded that the AO could at the best have made the addition based on net profit margin at 10% of the alleged non-genuine purchases in view of non verifiability. He has further submitted that the payment to these parties were made by Account Payee cheques and goods were duly received by the assessee. He has relied upon the decision of Hon'ble Jurisdictional High Court in the case of Nikunj Eximp Enterprises Pvt. Ltd., wherein it has been held that if the sale has been accepted the purchase cannot be treated as non genuine. Thus the Ld. AR submitted that when the assessee has made the payment ....
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....amely M/s N B Enterprises and M/s Maa Chamunda Sales Pvt. Ltd received back with the postal remark "Not Known". In those circumstances it was incumbent upon the assessee to produce the relevant evidence in support of genuineness of the purchase transactions from these parties. The AO however verified the status of these parties from the official website of Maharashtra Sales Tax Department and found that M/s N B Enterprises was notified as "Hawala Dealer" who issues bill without delivery of goods. Thus there was enough information and fact came to the knowledge of the AO to doubt the genuineness of the transactions. The assessee produced the confirmation certificate from a third party namely M/s Excellent Aluminium Centre who claimed to have....
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....the non genuineness of the purchase transactions in respect of these two parties. Hence, we do not find any error or illegality in the orders of authorities below qua this issue. 8. The alternative plea of assessee in ground no. 2 that the addition should be restricted to 10% of the alleged non-genuine purchases cannot be accepted because the purchase in question has the impact of full value on the income of the assessee by deflating the profit to that extent and, therefore, there is no question of taking any percentage of purchases treated as non-genuine. 9. Ground no. 3 is regarding addition in respect of unaccounted sales to the extent of Rs. 32,87,529/-.. During the course of assessment proceedings the AO asked the assessee to submit ....
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....fore, the addition cannot be made on the entire sale amount but the profit element in the sale can be added. The Ld. AR has further contended that the work was executed in the subsequent year, therefore, the assessee has recognized the sale only in the next year. In respect of the other two parties there may be mistake in the AIR information because the assessee has not booked the TDS of these amounts. It was further submitted that in case of M/s Dosti Corporation the amount pertains to the excess bill booked by the supplier and the assesee has received the amount of outstanding bill only to the extent of work done by it and, therefore, the said amount was not due from the said party. 12. On the other hand, Ld. DR has relied upon the order....