2018 (12) TMI 974

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....ion 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in making addition of profit rate at the rate of 12.5% of the bogus purchases. For this assessee has raised the following ground No. 1: - "1. The Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT (A)'] has erred in partly upholding the order of the Ld. Assessing Officer and in restricting the allowance to the extend of gross profit already declared by the appellant on purchases amounting to Rs. 1,66,70,967/- termed as non-genuine purchases, as against addition made on estimate by AO @ 12.5% on non-genuine purcha....

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....erving in Para 3.3. to 3.3.2 as under: - "3.3 The submissions of the Ld. Counsel for the appellant have been carefully considered. It is the contention of the Ld. Counsel that the AO has not afforded an opportunity of cross examination of the alleged bogus parties. The AO tried to verify the genuineness of the purchases by issue of notice u/s.133(6) which was returned unserved. When his efforts to verify the genuineness were failed, he made the parties from whom the assessee was supposed to have made the purchases as the assessee's witnesses and asked the appellant to produce the parties for verification which he failed to do. The Ld. Counsel argued that the AO has wrongly shifted the onus of producing these parties to the appe....

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....s of the purchases, he only doubted the transactions of the alleged parties mentioned supra. As the parties were not traceable, the genuineness of the purchases from these parties could not be established beyond doubt. Also, no confirmations have been obtained by the appellant from these parties. Therefore, the AD presumed that the purchases have been made from some other parties in the grey market, probably at a lesser rate. The AO has only estimated the additional profit margin which the assessee would have been made on account of these purchase which was 12.5% of the alleged bogus purchases 3.3.1. The Hon'ble ITAT, Ahmedabad 'C' Bench in the case of Vijay Proteins Ltd. vs. ACT 58 lTD 0428 held that in similar circumstanc....