TaxTMI 
TaxTMI 
2015 (11) TMI 1671
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.... that the assessee is a Partnership Firm carrying on-business of trading of Shirtings (Textile). The assessee filed return of income for A. Y. 2002-03 on 21.10.2002 declaring total income of Rs. 1,25,962/-. Based on information gathered during survey operations at the premises of Shri Rakeshkumar M. Gupta (Prop. Manoj Mills) & group concerns, the case of the assessee was reopened u/s 147 of the I.T. Act and notice u/s 148, dated 19.03.2009 was issued and served on the assessee. The order u/s.143(3) r.w.s.147 was passed, wherein purchases made from these concerns amounting to Rs. 12,56,369/- was added by the AO in assessee's income. 3. In an appeal filed before the CIT(A), the addition of 10% of GP on such purchases were upheld and balance ....
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.... without bills; and to regularize such purchases in grey market, the appellant might have taken accommodation bills from the said parties for purchase of specified material. The AO has not denied such possibility by quoting the words "hawala purchases/or to accommodate the purchases made out of the books" in para 19 of the assessment order. In the remand report for AY 2003-04, the AO stated that mere submitting of sales bills corresponding to purchases made by the assessee does not mean that the purchases by the assessee from Gupta groups are genuine. The assessee could have purchased these items from someone else as well. In the absence of stock register/stock tally it cannot be said that the assessee must have purchased these goods from G....
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....ully gone through the orders of the authorities below and found that purchases made from three parties were added by the AO on the plea that assessee has just taken a purchase bill. The CIT(A) after verifying the records observed that as per the monthly quantitative details of purchase and sales, the assessee had sold goods so purchased, when the sale is not disputed, the addition on entire alleged purchase is also not justified. The CIT(A) also observed that as per elementary rule of accountancy as well as taxation loss/profit from business cannot be ascertained without deducting cost of purchase from the sales. Since the department has accepted the sales, the CIT(A) deleted the addition after sustaining the GP addition of 10% to plug the ....