TaxTMI 
TaxTMI 
2012 (11) TMI 1340
X X X X Extracts X X X X
X X X X Extracts X X X X
....the case of your Appellant, the Ld. AO has erred in making the addition of Rs. 16,16,613/- as "Unexplained/uproved purchases / investment in purchases" as per section 69 of the I.t. Act, 1961 which the Ld. CIT(A) scaled down by Rs. 12,46,534/- thereby confirming to the extent of Rs. 3,72,079/-. 2. The appellant, therefore, prays that the addition made by the AO should be deleted in total." Revenue's Grounds of appeal:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of unexplained investment u/s. 69 to the tune of Rs. 3,31,622/- against the total addition of Rs. 16,18,613/-. 2. On the facts and in the circumstances of the case, the impugned order of the Ld. CIT(....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... from aforementioned concerns should not be treated as bogus. In response the assessee filed a letter dated 23/12/2009 in which it was submitted that all the purchases made by the assessee from the said parties are real, genuine and physically effected. It was submitted that the assessee has not received back any cash after realizing payment cheque to the said parties as alleged by them and no commission whatsoever has been paid. The purchases made by the assessee are real as the same is supported by delivery note, and the evidence regarding material sent through various transport agencies which establish the physical delivery of the goods. The AO also received letter dated 20/12/2009 from the said Shri Rakesh Kumar Gupta in response to sum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ering all these submissions held that entire purchases cannot be added back as unexplained because the assessee has already shown the sale proceeds against alleged purchases and in such cases if any addition is to be made then it is only on account of G.P rate or some adhoc addition. He referred to the decision of ITAT in the case of Balaji Textiles vs. ITO(49 ITD 177) in which it has been held that purchases were made through untraceable parties and assessee made sale to a party which is recorded in books of account of both the parties, then purchases have to be believed and deduction is to be allowed. Finding that GP rate of the assessee is around 2.44%, Ld. CIT(A) estimated the profit of Rs. 40,475/- on these sales. Further on account....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent has been retracted and the sales made by those concern to the assessee are genuine for which goods have been delivered and payments have been received through banking channels. Thus it was submitted by him that addition should be deleted in its entirety. 7. On the other hand, Ld. D.R submitted that without prejudice, in any case, if case of department is not accepted, the addition sustained by Ld. CIT(A) should be upheld. 8. We have carefully considered the rival submissions in the light of material placed before us. It will be relevant to reproduce the letter received by the AO from Shri Rakesh Kumar Gupta, which is also reproduced in the assessment order: "1 am in receipt of your summons u/s. 131 of the I.T.Act. 196....