2019 (4) TMI 195

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..../2016 (By Assessee): 1] The learned CIT(A) erred in confirming disallowance @ 20% amounting to Rs. 33,93,705/- out of the total purchases made by the appellant company of Rs. 1,69,68,524/- from M/s. Ajanta Enterprises on the ground that the said purchases were made from suspicious dealer and hence, disallowance to the extent of 20% on the basis of average gross profit declared by the appellant company was reasonable. 2] The learned CIT(A) failed to appreciate that the purchases made by the appellant company from M/s. Ajanta Enterprises were genuine and it had submitted all the documentary evidences to establish receipt and consumption of the material and therefore, such adhoc disallowance to the extent of 20% of the total purchases from the said party was not justified at all and the same should be deleted. 3] The learned CIT(A) erred in making disallowance on an adhoc basis on presumptions and surmises when he himself has accepted that the appellant has established the receipt and consumption of the material purchased from M/s. Ajanta Enterprises and accordingly, the disallowance confirmed by him may kindly be deleted. 4] Without prejudice to the above grounds, if at a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 1,69,68,524/- for the assessment year 2010-11 and Rs. 51,89,957/- for the assessment year 2011-12 respectively. The assessee was asked to explain the same by issue of show-cause notice. As the assessee did not reply to the said show-cause notice, the Assessing Officer finalized the assessment order u/s 143(3) of the Act and added the said addition of Rs. 1,69,68,524/- for the assessment year 2010-11 and Rs. 51,89,957/- for the assessment year 2011-12 on account of bogus purchases to the returned income of the assessee respectively. Aggrieved with the said decision of the Assessing Officer, the assessee carried the matter before the CIT(A). 5. The CIT(A) after considering the submission of the assessee and relying on various decisions of the Tribunal and the judgements of the Hon'ble High Court, restricted the addition of Rs. 33,93,705/- (20% of Rs. 1,69,68,524/-) instead of Rs. 1,69,68,524/- for the assessment year 2010-11 and the addition of Rs. 10,38,000/- (20% of Rs. 51,89,957/-) instead of Rs. 51,89,957/- for the assessment year 2011-12 respectively and partly allowed the appeals of the assessee. 6. Aggrieved with the said decision of the CIT(A), the assessee as well as the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....is case of passing of bills of sale and purchases, against which no VAT has been paid. Such bogus purchases are then to be added in the hands of assessee. Where the Assessing Officer had confronted the assessee with the information received, supplied copies of statements and where the persons have not been traced and no confirmation has been filed by the assessee in this regard, then the addition is to be made in the hands of assessee on account of such bogus purchases. In the facts and circumstances of some cases, the goods have been transferred by such hawala dealers to the respective purchasers, against which the assessee has to discharge onus of establishing the trail of goods which are transferred and further sold by them. Where the assessee is able to produce evidence of purchase of goods by way of weighment bridge receipts, transportation documents, payment of octroi and subsequent sale of goods to the respective parties and / or where the assessee has maintained complete quantitative details of purchase and sale of goods, then total bogus purchases cannot be added in the hands of assessee, but GP rate of 10% is to be applied on bogus purchases. Where the assessee does not e....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....arty, then the total purchases the hands of assessee. However, since the p ucracnhnaoste bs ea arde dmeda dine fhraonmd st hoef garsesye smseaer.k eTt,h es oTmreib eusntaiml ainti oMn/ sn. eCehdest aton bEen tmerapdrei siens tVhse. eAsCtIiTm a(stiunpgr ath) eh saasm ael r@e a1d0y% hofe ltdh et ahlalte gtehde haawddailtai opnu rbceh amseasd, eo vbeyr and above the GP shown by the respective assessee. V. Another set of cases where the statements recorded by the Sales Tax Department have been handed over to the assessee and the copies of same have been supplied to the assessee, then where the assessee established the case of receipt of goods and its onward transmission, then the factum of purchases by the assessee stands established in such circumstances. However, estimation is to be made in the hands of assessee because of purchases from the grey market and following the above said ratio, addition is to be made by estimating the same @ 10% of the alleged hawala purchases, over and above the net profit shown by the assessee. 41. Now, coming to the factual aspects of each of the appeal, which have already been referred to by the learned Authorized Representative for the assessee ....