2017 (9) TMI 1097

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....39; of Rs. 44,44,0221- with respect to expenditure incurred on purchase of raw material used for trading and/ or manufacture of goods.: 1.1 The Learned AO has invoked and the CIT (A) has confirmed the addition/ disallowance on account of 'Bogus Purchase u/s. 69C' for 'Unexplained Expenditure, etc' of Rs. 44,44,022/- with respect to expenditure incurred on purchase of raw material used for trading and/ or manufacture of goods. 1.2 In that respect, the appellant would like to state as under:- a. The appellant maintains his books of accounts as prescribed u/s 44AB of the IT Act, 1961 and Rule 6F. For the AY 2009-10, the books of accounts are audited as per S. 44AB of the IT Act, 1961 and the AO and / ....

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....see is one of the beneficiaries of the accommodation bills in the form of purchase bills. The AO opened the assessment proceedings by issuing a notice u/s 148 of the Act and proceeded to assessee the income of the assessee u/s 147 of the Act at an income of Rs. 68,41,222/- after disallowing the bogus purchases of Rs. 44,44,022/- u/s 69C of the Act. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties dismissed the appeal of the assessee. Now before us, the assessee has preferred the present appeal by raising the above grounds. Ground No. 1(1.1 to 1.3) 3. Since all the ground raised by the assessee are inter related and inter connected and relates ....

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....en e.g. to or from government bodies or agencies etc no addition may be made. If however, the purchases are bogus but the direct sales are proved, the assu4iptions are that the purchases were made from unknown parties and the AO can apply a profit rate tb determine the liability of the assessee. It is also seen that putting an onus on the AO to trace the n4oney trail or verify the withdrawals from the banks etc may give more pointers but it is not by itself and the ITAT has not accepted such an argument in the case of Shri Ganpatraj A (supra). If the bogus purchases are for use of the assessee itself in its trading, ng or non-trading consumption, the entire addition can be made as it only goes to the expenses of the assessee. Lastl....

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....essee. In the present case also, the assessee was allowed full opportunity in the assessment as well as the appeal proceedings to justify, and prove its purchase but it has failed to do so. The assessee could not substantiate its own sellers. The onus never left the assessee. The assessee could not match its sale and the purchase. The facts mentioned above indicate that the assessee has taken accommodation entries in order to inflate its purchase. Therefore it is held that the addition of Rs. 44,44,022/- is required to be made u/s 69C of the Act only. The addition is confirmed and the ground of appeal No. 2.1, 2.2 & 2.3 are dismissed. After analyzing the orders passed by Ld. CIT(A) and hearing the counsels at length, we find tha....

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....mitted PAN in respect of the parties to whom the material was purchased. It was also argued that while passing the order, the AO totally ignored the fact that the sales are genuine which prove that the assessee had actual position of goods. The assessee has also supplied copy of sale invoices. 5. On the other hand Ld. DR appearing on behalf of the revenue relied upon the orders passed by the Assessing Officer. 6. After considering the arguments of both the parties and also considering the material placed on record as well as the orders passed by the revenue authorities, we find that the assessee has placed on record the documents pertaining to purchase of material from the parties. We have noticed that the AO has not issued notice u/s....