2019 (1) TMI 738

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....d bogus purchases. 3. The facts relating to the issue are stated in brief. The assessee is a trader in iron, steel and hardware and is conducting business under the name and style of M/s.S.S.Traders. The Revenue received information from Sales-tax Department, Government of Maharashtra, that certain dealers were only providing accommodation bills without actually supplying materials. From the information furnished by the Sales-tax Department, it was noticed that the assessee has purchased goods from some of such dealers aggregating to Rs. 1,48,79,887/- during the year under consideration. Hence, the Assessing Officer reopened the assessment and asked the assessee to prove the genuineness of the purchases. The assessee furnished copies ....

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....ence, there was no justification for rejecting the books of account and estimating the profit. She further submitted that the assessee has also paid the sales tax payable on the impugned purchases subsequently to the Sales-tax Department. Accordingly she submitted that the entire addition should have been deleted by Ld CIT(A). In the alternative, the learned AR submitted that an identical issue was considered by the learned CIT(A) in the case of sister-concern of the assessee, i.e., in the case of Shri Sunil B.Vorani, wherein the learned CIT(A) vide his order dated 27.12.2016, has upheld the addition to the extent of GP rate declared by the said assessee. The learned AR submitted that the GP rate declared by the said assessee was 3.34% only....

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....s, the tax authorities have rejected the books of account. Though the Assessing Officer estimated the GP at the rate of 25% on the entire sales turnover declared by the assessee, yet the learned CIT(A) has restricted the addition to 25% of the value of bogus purchases. 8. It is an admitted fact that the assessee could not reconcile the purchases with the sales. The assessee also could not produce the stock register. Hence it cannot be said that the assessee has proved that the sales declared by it included sale of materials purchased from hawala dealers. However, since the Ld CIT(A) has estimated the addition on purchases, it can be presumed that the first appellate authority has accepted that the sales declared by the assessee included ....