2019 (9) TMI 1256

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ction 143(3) 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) directing the AO to restrict the addition made by AO being estimating profit percentage at the rate of 25 % on bogus purchases. For this assessee has raised following ground: - "1. The Hon. CIT(A) erred in not appreciating that the re-opening of assessment u/s 147 of the I. Tax Act 1961, by issue of the notice u/s 148 on 26.03.2013, was without any independent and valid belief held by the Id AO that any income chargeable to tax had escaped assessment, thereby making the re-opening bad-in law and meriting the assessment order allowing therefrom to be quashed. 2. The Hon. CIT (A) er....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..../- 2. Maulik Steel Corporation 1,00,000 3. Centurian Sales Corporation 5,00,063 4. Mahavir Enterprises 3,00,283 5. V.M. Udyog 3,00,387 6. Hiten Enterprises 13,61,130   Total 28,61,859 4. During the course of assessment proceedings and during appellate proceedings, the assessee submitted documentary evidences such as payment received against such sales, receipt of material purchases, account payee cheque. According to the AO, the assessee failed to establish the genuineness of the purchase and accordingly, he made addition of unproved purchase at 28,61,859/- to the returned income of the assessee. Aggrieved, assessee preferred the appeal before CIT(A), who restricted the disallowa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....7.6 In this case, the AO has not disputed the sales made by the appellant, therefore the corresponding purchases cannot be ruled out. This is not the case where entire cash has been siphoned off by debiting the bogus purchases. In my considered opinion, this is a case where the expenses, at the most, might had been inflated, by booking unverifiable purchases. From the above details it is seen that the OP rate, in the year under appeal, has gone down substantially low i.e. 1.94% from 3.27% in A Yr 2007-08. This shows that the appellant is capable of harvesting OP @3.2%. from the items traded by him. In compliance, the Ld. AR, could not substantiate the fall in OP with supporting documents. From the above chart, it is crystal clear that the a....