TaxTMI 
TaxTMI 
2016 (11) TMI 328
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....f 15% on un verified purchases through the provisions of Section 145(3) without giving any comparable case. (2) That the ld. CIT(A) erred in not following the past history of the cases wherein the G.P. rate was applied. 2. In respect of ground No.1 of Revenue's appeal and the assessee's cross objection, the facts of the case are that the assessee had made purchases from some parties which were bogus entry providers as per surveys/ enquiries conducted by the BCT wing in the month of March, 2008 and in these enquires it was noticed that these concerns were issuing bogus bills. Further to verify the genuineness of the purchases, summons u/s 131 of the IT Act, 1961 were issued and the same were either received back with the post remarks 'Not known' or no reply was filed. Further, the AO had sent the the Notice Server as well as his Inspector of the circle to find out that whether any such business concern exist at the given address. He reported that no such business concern exists on the given addresses. This fact was appraised to the assessee vide order sheet entry dated 05.12.2011 and was also asked to personally produced the following parties for verification, but the as....
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....e not available at the addresses mentioned (ii) the assessee was unable to produce these sellers and (iii) inquiries conducted by the Investigation Wing showed that the above concerns were merely issuing bogus bills. The contention of the appellant that address, PAN, Sales tax registration number, confirmations, mode of payment, purchase bills have been submitted, does not discharge the onus from the assessee in view of the fact that these concerns are now untraceable and these documents do not show that delivery of goods have taken place. Therefore the finding of the AO that these purchases are unverifiable, is upheld. Also the action of the AO is rejecting the books of accounts u/s 145(3) is therefore, upheld. The AO has disallowed 25% of the above unverifiable purchases by relying on the decision of the Gujarat High Court in the case of Sanjay Oil Cake Industries (2008) 10 DTR 153 and the decision of the ITAT, Ahmedabad in the case of Vijay Proteins Ltd. 58 ITD 428. The ITAT, Jaipur Bench in ITA No. 241/JP/2012 dated 22.10.2014 has recently held, on pages 67-69 of the consolidated order as under: "We have heard the rival contentions of both the parties and peru....
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....urchases from the parties have been claimed to be made by him. The assessee also could not be able be lead any evidence in furthermore of filing of confirmatory letter or merely showing that the payments were made by account payee cheque. The assessee was aware of the whereabouts of the parties and he should have produced these parties, therefore, the AO for verification or purchases, which could not be done at the stage of assessment proceedings. The addition on account of unverifiable purchases were made in A.Y. 2006-07. Thus, past history of the assessee is not reliable and doctored. This funding is also got support from the recent decision of Hon'ble Rajasthan High court in the case of Venus Arts & Gems order dated 20.08.2014 wherein it has been held that order passed by the ITAT for confirming GP after rejection of books of accounts on the basis of various discrepancies found by the AO, there is no question of law involved in such profit estimates. Even the assessee may be 100% exporter with does not preclude the AO from enquiring into the genuineness of the purchases. Therefore, we are of the considered view that 15% NP on unverifiable purchase is reasonable in this case. Acc....
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....oned on page 3 of AO. However, the assessee filed confirmation. The AO has accepted the sale. The AO rejected the books of accounts and added Rs. 21,99,622/- calculated at the rate of 25% of the unverified purchases of Rs. 87,98,686/-. The AO applied this rate of 25% on the basis of judgement of High court in the case of Sanjay Oil Cake Industries vs. CIT (10 DTR 153 Guj) & ITAT Ahmedabad 'C" Bench in the case of Vijay Proteins Ltd. vs. ACIT (38 ITR 428). The facts of these cases are totally different. The ratio cannot be applied in the case of the assessee. In A.Y. 2005-06 & 2007-08, Hon'ble ITAT, Jaipur in assessee's own case has held that the facts of the above cases relied by the AO do not exist in the case of the assessee but applied rate of 24% as against 23% shown by the assessee. The GP rate of current year is 25.21% as against 23.11% in immediately preceding year. Thus, the GP is better than the past year. The ld. CIT(A) on page 6 following the ITAT order in ITA No. 241/JP/2012 dated 22.10.2014 applied the rate of 15% on unverified purchases. These findings are the findings of fact. The finding of the case in one case could not be applied universally in all the cases. It c....
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....fiable purchases @ 15% based on decision of the Coordinate Bench in case of Anuj Kumar Varshney (supra). We accordingly, confirm the order of the ld CIT(A). The respective grounds of appeal taken by the Revenue and the assessee are dismissed. 5. In respect of ground No.2 of the revenue's appeal, the relevant facts and the the finding of the ld. CIT(A) as under: " The assessee has debited a sum of Rs. 75,00,000/- on account commission on sales to Travel Corporation of India (TCI). The AO has disallowed Rs. 15,00,000/- out of the above expenditure on the ground that it relates to the prior period of 30.12.2007 to 31.03.2008. the AO has arrived at this conclusion on the basis of a copy of agreement between the assessee and TCI which states that this commission on sales pertains to the period 30.12.2007 to 31.03.2009. This agreement is signed only by TCI and not the assessee. The appellant has claimed that this expenditure pertains wholly to this previous year. In support thereof, he has submitted a copy of confirmation of TCI showing that this expenditure pertains to the period from 01.04.2008 to 31.03.2009. The appellant has also denied entering into any such agreement wi....