TaxTMI 
TaxTMI 
2017 (11) TMI 321
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....of the case and in law, the CIT(A) ought to have upheld the entire addition of Rs. 2,09,49,678/- made on account of bogus purchases. Assessee's Appeal in ITA No.1460/Ahd/2012 - AY 2008-09 3. Likewise, grounds of appeal raised by the assessee is also reproduced hereunder: 1. The Assessing Officer has erred in law as well as on facts by making addition amounting to Rs. 2,09,49,678/- on account of bogus purchases and the Ld.CIT(Appeals) has also erred in law as well as on facts by confirming the additions to the extent of Rs. 52,37,420/- @25% of the total addition made by the Assessing Officer. 2. The Assessing Officer has erred in law as well as on facts by accepting the statement recorded by the third party as a evidence for the bogus purchase and again the CIT(Appeals) has erred in law by confirming the same as a valid evidence. 3. The Ld.CIT(Appeals) has erred in law as well as on facts by applying the rate of 25% of the alleged bogus purchases for confirming the bogus purchases without any specific evidence or law. 4. The Assessing Officer has erred in law as well as on facts by initiation of penalty proceedings u/s.271(1)(c) for concealment of income without any s....
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....rawal thereafter is seen. The AO observed that such a pattern of deposit and immediate withdrawal in cash is untypical of business of any concern which is really engaged in manufacturing/trading related to edible oil business. It was thus held that the statement of the supplier was thus substantiated by continuous pattern of deposit and withdrawal. The AO further observed that the statement of proprietor was confirmed in the statement of Shri Madanlal L.Shah dated 22/09/2010. In the aforesaid statement intermediary Shri Madanlal L.Shah has stated that he had introduced various traders to purported supplier who only issued bogus adjustment bills without any delivery of goods. In this regard, the statement of Shri Kamleshbhai G.Thakkar (Power of Attorney holder of the assessee) dated 10/10/2008 was also taken into account by the AO whereby it was stated by the POA does not possess any proof to support supply such as gate pass - LR receipts, challans or vouchers in respect of goods purchased. The claim of Assessee is dependant only on bill issued by supplier. The AO also noticed that in spite of several opportunities thereafter, the assessee could not produce any evidence to corrobora....
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....A). While the AO, on one hand, has challenged the direction to delete 75% of the bogus purchases made from M/s.Vishal Traders, the assessee was impugned the sustenance to the extent of 25% of alleged bogus purchase. 9. The Ld.DR for the Revenue submitted at the outset that the facts of the case are gross, worse and peculiar. It is a matter of fact on record that the so-called supplier M/s.Vishal Traders is found to have issued accommodation bills to the assessee and is a bogus supplier. The facts were unraveled due to strenuous action of survey under s.133A of the Act and consequent unequivocal statement deposed by the suppliers as well as the introducer Shri Madanlal L.Shah. Shri M.L.Shah was also cross-examined by the representative of the assessee without any success. The assessee could not substantiate the alleged fact of purchase from supplier M/s.Vishal Traders by producing lorry receipts etc. The payment made by the assessee towards the purported supply was found to be withdrawn immediately in cash. These facts when read together gives an unambiguous and unflinching impression of assessee indulging in camouflaging the book results by introducing bogus bills. The Ld.DR submi....
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....t the purchases per se are not bogus. This implies that the AO himself has admitted the fact of existence of purchase albeit from unregistered dealers who do not have bill books. Simultaneously, the corresponding sales have also not been disputed. Noticeably, the assessee has recorded total sales to the tune of Rs. 323.43 lakhs during the year and recorded purchase of Rs. 401.88 lakhs including impugned purchases of Rs. 209.49 lakhs from M/s.Vishal Traders. Apparently, in the absence of actual purchases made from unknown unregistered dealers, it will not be possible to record the staggering sales. Thus, the fact of purchases made from unidentified other source cannot be denied on wholesome basis. Therefore, in our view, the CIT(A) has correctly appreciated the facts and granted relief towards actual purchases. 12. The second limb of the dispute is towards estimation and quantification of inflated purchases element. The CIT(A) has estimated 25% towards possible inflation of the quantum of purchase and drew support for such estimation from the decision of the Hon'ble Gujarat High Court in the case of Sanjay Oilcake Industries(supra). The assessee, on the other hand, seeks lower esti....