2017 (3) TMI 1731

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....f the Act, determining its income at Rs. 33.99 lakhs. Brief Facts: 2.Survey proceedings were initiated under section 133A of the Act at the business premises of Rakesh Kumar Gupta group concerns (Manoj Mills, Shree Ram Sales and Synthetics and Astha Silk Industries). During the survey, it was found that the group companies were engaged in the activity of issuing accommodation bills and that they were not a trading activity. Statement of Rakesh Kumar Gupta (RKG) were also recorded who admitted before the survey team that he and the other group concerns were engaged in activity of issuing bills for the past 9 years and were earning a commission of 1% on accommodation bills. As the assessee had purchased goods worth Rs. 25.64 lakhs from abo....

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....s to the total income of the assessee. 3.Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA).Before him the assessee challenged the reopening of the assessment u/s.147 of the Act and the additions made by the AO. Referring to his own order for the earlier AY., the FAA held that the AO had rightly invoked the provisions of section 147 and had reopened the assessment on valid grounds. With regard to the purchases made from RKG group, the FAA again referred to his order, dated 15/10/2012 for the AY. 2006-07. In that order, he had held that no survey action or any further enquiry was carried out in the case of the assessee, that any meaningful enquiry/ investigation was not carried out ....

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....n record that payments made by the assessee had come back to it in cash. Finally, he upheld the addition of 10% of the disputed purchases. Following the order for the AY. 2006-07, he confirmed profit at the rate of 10% of the purchase in question and restricted the addition to Rs. 2. 20 lakhs. 3.Before us, the Authorised Representative (AR)argued that the purchases made were genuine, that there was no possibility of any leakage, that the revenue authorities had not disturbed the gross profit shown by the assessee, that the statement of RKG were of general nature. The Departmental Represnetative (DR)supported the order of the FAA and stated that he had already given substantial relief to the assessee. 4.We have heard the rival submissions ....