TaxTMI 
TaxTMI 
2011 (8) TMI 1101
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Rs. 1,75,24,213/as against the disallowance of the entire amount made by the Assessing Officer as bogus purchase?" " Whether the Appellate Tribunal is right in law and on facts in not adjudicating the applicability of section 40A(3) of the Act?" "Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT (A) in directing to adopt GP at 2% of the turnover instead of N.P. at @ 2% of the turnover adopted by the Assessing Officer resulting in addition of Rs. 10, 29, 867/?" 2.0 The central issue revolves around purchases of Rs. 1,75,24,213/with the Assessing Officer which is alleged as 'not genuine'. The Assessing Officer also of the opinion that payment of such purchases having been made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evenue further submitted that Delhi High Court in the case of Commissioner of IncomeTax vs. La Medica reported in [2001] ITR 575 had approached such an issue somewhat or differently. That High Court was of the opinion that once the purchases are found to be bogus, there was no question before the Tribunal as to from where purchases were made. What was under consideration was whether the purchases were made from K as was claimed by the assessee. Once it was accepted that the supplies were not made by K to whom payments were alleged to have been made, the question whether the purchases were made from some other source could not have weighed with the Tribunal as a factor in favour of the assessee. 6.0 Having heard learned counsel for the re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come conduit pipes between the assessee firm and the sellers of the raw materials. Under the circumstances, it was not impossible for the assessee to inflate the prices of raw materials. Accordingly an addition at the rate of 25% for extra price paid by the assessee than over and above the prevalent price is fair and reasonable and we accordingly confirm the finding of Commissioner of Incometax( Appeals)". "12 Thus, it is apparent that both Commissioner (Appeals) and the Tribunal have concurrently accepted the finding of the Assessing Officer that the apparent sellers who had issued sale bills were not traceable. That goods were received from the parties other than the persons who had issued bills for such goods. Though the purchases are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther the estimate should be at a particular sum or at a different sum, can never be an issue of law. 7.0 In the present case also, the Commissioner of Incometax (Appeals) had observed that, it can be logically presumed that the assessee was motivated to produce goods from unidentified parties who were not ready to account for the sales to save various levies and taxes, includint income tax to share the advantages. It was further observed that in absence of good and reliable evidence the plea, if raised, that the goods had to be purchased in this manner because they were not otherwise available could not have been discarded as out of total purchases of about Rs. 5.15 crores, purchases of Rs. 1.75 crores which is about 1/4th of the total p....