TaxTMI 
TaxTMI 
2016 (3) TMI 1088
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....s.) Assessment dt. Assessed Income(Rs.) Dt. of orders of CIT(A) 2007-08 04.10.2007 1,01,090/- 28/01/2014 28,88,380/- 29/04/2014 2008-09 23.09.2008 1,81,465/- 29.12.2010 96,02,730/- 29/08/2013 2009-10 28.07.2009 2,55,336/- 15.12.2011 1,02,07,430/- 29/08/2013 ITA/4629/Mum/13,AY.2008-09: 2. Effective ground of appeal,raised by the AO,is about deleting the addition of Rs. 84.79 lakhs,made by the AO u/s.69 of the Act,under the head unexplained/unproved purchase/investment in purchase.During the assessment proceedings,the AO found that a survey u/s 133-A of the Act was carried out on 13/14- 2-2009 in case of Rakesh Kumar Gupta (RKG),one of the suppliers of goods to the assessee-HUF.In his statement recorded during the course of survey,RKG stated that he was providing accommodation sales bills for purchases in the name of various proprietary concerns namely M/s Manoj Mills, M/s Astha Silk Industries,M/s.Sainath Textiles,Devvani industries and M/s Shree Ram Sales and Synthetics,belonging to him and his family members.It was found that the assessee had purchased goods worth Rs. 94.21 lakhs from the RKG Group.The AO asked t....
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....ific request made by it,that the assessee had submitted the day to day movement of material alongwith the corresponding sales/inventory of stock, that the books of account of the assessee were audited,there was no adverse comment by the auditors about completeness of the books of account or about the quantitative details, that if the sales were treated as genuine corresponding purchase cannot be considered bogus,that addition could be made only to the extent of some percentage. Finally,he held that the cause of justice would be served by making addition @10% of such purchase in order to fill in gap of difference of GP in recording the said purchase as well to plug any leakage of revenue.He upheld the addition of Rs. 9.42 lakhs and deleted the addition of Rs. 84.79 lakhs. 4. Before us,the Departmental Representative (DR) supported the order of the AO.Authorised Representative (AR) stated that assessee had produced all the necessary documents before the AO, that copies of purchase bills and bank statement, indicating the payment through banking channels were furnished, that AO had not doubted the sales shown by the assessee .He relied upon the cases of Nikunj Exim Enterprises Pvt.....
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....s. The explanation of the assessee did not find any favour from the AO who was of the opinion that the assessee has availed bogus bills amounting to Rs. 10,59,265/-. The AO went on to treat the purchases amounting to Rs. 10,59,265 from the said Shri Rakeshkumar M. Gupta and his family members as bogus and accordingly added the same to the returned income of the assessee and completed the assessment. 3. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A). Before the Ld. CIT(A), the assessee reiterated his submissions. After considering the facts and the submissions made by the assessee, the Ld. CIT(A) came to the conclusion that an adhoc addition of Rs. 1,35,000/- which is about 12.5% of the purchase in question would meet the ends of justice. The Ld. CIT(A) restricted the addition to Rs. 1,35,000/-. 4. Aggrieved by this, the assessee is before us. 5. The Ld. Counsel for the assessee reiterated that the AO has grossly erred in treating the purchases as bogus purchase. It is the say of the Ld. Counsel that the Ld. CIT(A) further erred in making an adhoc disallowance which has no basis. 6. Per contra, the Ld. Departmental Repres....
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....nt, i.e., reconciliation statement but also in view of the other facts. The Tribunal records that the books of account of the respondentassessee have not been rejected. Similarly, the sales have not been doubted and it is an admitted position that substantial amount of sales have been made to the Government Department, i.e., Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of bank statement all of which would indicate that the purchases were in fact made. In our view, merely because the suppliers have not appeared before the Assessing Officer or the Commissioner of Income-tax (Appeals), one cannot conclude that the purchases were not made by the respondent-assessee. The Assessing Officer as well as the Commissioner of Income-tax (Appeals) have disallowed the deduction of Rs. 1.33 crores on account of purchases merely on the basis of suspicion because the sellers and the canvassing agents have not been produced before them. We find that the order of the Tribunal is well a reasoned order taking into account all the facts before concluding that the purchases of Rs....