AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 798
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....ue in all these appeals is, in respect of the addition made towards bogus purchases by the Assessing Officer. The Assessing Officer in all these Assessment Years based on the information of the Sales Tax Department in their official website and the information from the Investigation Wing, noticed that several dealers have provided only accommodation entries for purchase of materials without supply of goods. In the course of Assessment Proceedings, A.O noticed from the ledger extract that the assessee purchased materials from several dealers who appeared in the website of the Sales Tax Department and required the assessee to substantiate the purchases made from such dealers. 3. Assessee made various submissions before the Assessing Officer ....
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....ales Tax Department's information doubted the genuineness of the purchases made by the assessee as the assessee purchased materials from some of the dealers who appeared in the Sales Tax Department's website as Hawala dealers. Learned Counsel for the assessee submitted that in the course of Assessment Proceedings assessee produced stock register, invoices, bank statements to prove the genuineness of the purchases made. The payments were made through account payee cheques. Therefore, the entire purchases cannot be treated as bogus. Learned Counsel for the assessee submitted that estimation of profit @25% by the Ld.CIT(A) is also on higher side. Referring to the Coordinate Bench decision in the case of M/s. Adeshwer Enterprise v. DCIT in ITA.....
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.... them as bogus. On a perusal of the Assessment Order, we see that the addition was made only based on the information kept in the Sales Tax Department website that some of the dealers have provided accommodation entries. The Assessing Officer has not brought any concreate evidence to prove that the assessee purchased materials from these hawala dealers. Assessee produced various evidences to establish the genuineness of the purchases. The Assessing Officer not considering the evidences produced treated the entire purchases as non-genuine and at the same time the sales made from such purchases were accepted by the Assessing Officer. The Ld.CIT(A) considering the submissions of the assessee and various case laws estimated the profit element @....
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....t be disallowed which was replied by the assessee vide letter dated 20.03.2012. The assessee submitted that it has made purchases from three parties aggregating to Rs..31,03,479/- and submitted the details of purchases, bills, vouchers, vehicle numbers and delivery challans, etc beside the details of payments. The assessee submitted that these purchases were made for the construction of various projects and the materials were duly consumed and the sales were also reflected in the books of account of the assessee. It was also stated that mere non payment of VAT/Sales Tax by the vendor do not mean that the assessee has not incurred any cost on the construction as the assessee has issued account payee cheques to various vendors who supplied ma....
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....rresponding sales were also shown in the books of account of the assessee. The learned A.R. submitted that the assessee is following project completion method wherein profits are offered to tax only after completion of the project whereas the AO had added 100% of the bogus purchase to the income of the assessee disregarding the said system of accounting followed by the assessee. The learned A.R. further submitted that despite producing all the evidences, the AO has not done any verification and merely added the entire purchase from three parties aggregating to Rs..31,03,479/- to the income of the assessee. The learned A.R. also submitted that the case of the assessee was covered under search action and the year under consideration has been ....