2017 (3) TMI 948

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....r appellant prefers this appeal, among others, on the following grounds of appeal, each of which is without prejudice to, and independent of, the other: 1. On the facts and in the circumstances of the case, and also in law, the learned CIT(A) erred in upholding the disallowance of Rs. 73,84,489/- made by the learned Assessing Officer out of the purchases, holding the same to be bogus. Your appellant, therefore, prays that the said disallowance be deleted. 2. Without prejudice to Ground No.1 above, the Ld. CIT-A also erred in not appreciating the appellant's contention that since the aforesaid purchases were debited to the profit & loss account net of MVAT of Rs. 2,84,019/- the disallowance should have been reduced to that extent. Your a....

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....s. 11,02,501/-, Rs. 10,47,506/-, Rs. 30,46,745/-, Rs. 15,81,209/- and Rs. 6,07,528/- respectively, together totaling to Rs. 73,84,489/-. 4. The assessing officer further observed that: In order to verify these purchases and to confirm movement of goods or receipt of goods, summons u/s. 131 of the Act, was issued to the Managing Director of the assessee Company. The assessee company was asked to substantiate purchases from these five parties by producing transportation bills, delivery challans, stock register, inward register, goods receiving notes etc. Shri Nitin S. Shembekar, Managing Director of the Company attended in response to the summons. Statement of Shri Nitin S. Shembekar was recorded u/s. 131(1) of the Act on 17.12.13. Shri Nit....

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....o do so as already discussed in above paras iii) The Managing Director of the Appellant company agreed for addition u/s.131 of the J.T. Act, 1961 after confronting for failure to produce the relevant documents to support the genuineness of the purchases. Therefore, the MD confession is not a General Confession as it supported by information and evidence received from Sales Tax Department and after giving adequate opportunity to the appellant at the time assessment proceedings. Even in the assessment proceedings, no relevant documents were filed to prove the genuineness of purchases. Finally, the MD had to admit for agreed addition u/s.131 of the I.Tax Act. The reasons given by the appellant at Sl. Nos. 1.5, 1.6 and 1.7 cannot be accepted. T....

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.... upon the sales tax Department investigation assessing officer has not made any examination of his own. He further submitted that no opportunity has been granted to the assessee to cross examine the said suppliers. Per Contra learned departmental representative supported order's of the authorities below. 7. Up on careful consideration we note that the purchases to the tune of Rs. 73,84,489/- have been treated as bogus, however the sales contract receipts have not been disputed. The disallowance has resulted in a gross profit margin of 56%, which is unrealistic and not supported by the industry average or the past performance of the assessee. Further more it is also settled law that when sales are not doubted the entire corresponding pu....