2017 (5) TMI 1525

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....s precious and semi precious stones, stated to have purchased goods worth Rs. 4,63,704/- from M/s. Tanvi Gems, Rs. 3,92,102/- from M/s. Laxmi Jewellers, Rs. 5,95,703/- from M/s. S.R. Gems and Rs. 20,946/- from M/s. S. Exports totaling Rs. 14,72,455/-. 2.1 Since the assessee failed to produce these parties before the AO and since the first three concerns were not found existed at the given address, the AO doubted the claimed purchases from them, the AO held the books of accounts defective. 2.1 The AO also noted that the wages claimed by assessee were not fully vouched. He accordingly rejected the books of account. The AO also observed that there was steep fall in G.P. rate as compared to preceding year. 2.2 During the year on the turno....

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....pplication different G.P. rates by the lower authorities against the G.P. rate shown by the assessee was just and proper. Considering the above submissions, we do not find reason to interfere with the first appellate order so far as application of provisions of section 145(3) is concerned. There is no doubt that we have initially given full relief on such cases on the basis that the assessee had furnished all the necessary information supported with documents which could have been expected from a prudent purchaser to establish the genuineness of the claimed purchases from the named parties thus genuineness of the same cannot be doubted merely because those parties could not be produced or not found later on during the period of assessmen....

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....icient relief by restricting the application of G.P. rate from 15% to 12% and against 11.39% shown by the assessee to cover up the possible leakage, if any, due to the defects pointed out by the AO. The first appellate order is thus upheld. The grounds of the appeals preferred by the parties are thus rejected." 4.1 The observations of CIT(A) which reads as under:- "The contention of the A/R is considered. So far as unverified purchases are concerned, by not producing the suppliers the appellant failed to prove purchases of precious and semi precious stones to the extent of Rs. 14,72,455/-. By filing confirmations and copy of accounts, TIN and PAN and RST/CST No. etc at the most the existence of the suppliers could be proved on p....