2017 (12) TMI 573

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....dding peak purchases of the total purchase value amounting of Rs. 19320247/- ignoring the detailed evidences brought on record and further erred in levying interest thereon and ignoring the judicial precedents brought to his knowledge. 2. Learned Assessing Officer erred in disallowing the purchases on the basis of information received from Sales Tax Authorities which contrary to the material fact on record and more particularly is contrary to the provisions of Section 69C since the source is in dispute and not the purchase expenditure. 3. In this case, the return of income was filed on 16.09.2009 declaring total income at Rs. 8,13,210/-. The Assessing Officer in the assessment order has stated that assessment in this case was initiated o....

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....rnished. The assessee further admitted that the concerned parties are not available at their last known addresses nor does he know the current whereabouts of the parties. The assessee confirmed that it has sold the goods which have been purchased from the alleged hawala dealers and has realized the sale proceeds. Therefore, it was pleaded that the purchases have to be treated as genuine. The Assessing Officer however, relying on the decision of the Hon'ble ITAT, Ahmedabad in the case of Vijay Proteins worked out the peak credit for the purchases made from the alleged hawala parties. The peak credit worked out to Rs. 90,13,127/- which has been added u/s.69C of the income-tax Act by the Assessing Officer. 4. Against the above order, the ....

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.... such parties. The Hon'ble High Court of Gujarat in the case of CIT vs. Simit P. Sheth 356 ITR 0451 held that once the sale is accepted by the AO, the very basis of purchases could not be questioned. Not the entire purchase price could be disallowed but only the profit element embedded in such purchases could be added to the income of the assessee. The estimation varies with the nature of business and no uniform yardstick could be adopted. Given the facts and circumstances of the instant case, I find it reasonable to estimate the profit at 12.5% of the alleged purchases of Rs. 1,93,20,247/-. 5. Against the above order of ld. Commissioner of Income Tax (Appeals), the assessee is in appeal before the ITAT. 6. We have heard both the coun....

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....ese parties. In such circumstances, there is no doubt that these parties are non-existent. We find it further strange that assessee wants the Revenue to produce assessee's own vendors, whom the assessee could not produce. The purchase bills from these non-existent/bogus parties cannot be taken as cogent evidence of purchases. In light of the overwhelming evidence, the Revenue authorities cannot put upon blinkers and accept these purchases as genuine. This proposition is duly supported by Hon'ble Apex Court decision in the case of Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC) and CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC). In the present case, the assessee wants that the unassailable fact that the suppliers are non-existent and, thus, b....