2019 (11) TMI 143

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....entical, therefore, both the appeals were clubbed, heard together and are decided by common order. For appreciation of fact, the appeal for Assessment Year 2009-10. Though the revenue has raised as many as seven grounds of appeal, however, in our considered view, the only substantial ground of appeal is whether the ld. CIT(A) was not justified in restricting the disallowance of bogus purchases to the extent of 12.5% of bogus/hawala dealers/non-existent vendors. 2. Brief facts of the case are that the assessee-firm is engaged in the business of Trading in Hardware, filed its return of income for Assessment Year 2009-10 on 30.09.2009 declaring total income of Rs. 16,32,700/-. The return of income was processed under section 143(1). The asse....

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....tice under section 133(6) to M/s Sachi Mercantile Pvt. Ltd. The notice sent through registered post was returned back with the remark "Left". The assessee was asked to produce the party and substantiate the purchases. The Assessing Officer after considering the report of Investigation Wing of Sale Tax Department disallowed the entire purchases shown from Sachi Mercantile Pvt Ltd. in assessment order dated 31.10.2014 passed under section 143(3) r.w.s 147. 4. On appeal before the ld. CIT(A), the ld. CIT(A) restricted the addition to the extent of 12.5%. The ld. CIT(A) while restricting the disallowances relied upon the decision of Hon'ble Gujarat High Court in case of Simith P. Seth (356 ITR 451). The ld. CIT(A) also concluded that assessee....

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.... bogus purchases. The Assessing Officer has not disputed the sales of the assessee. The Assessing Officer solely relied upon the report of Investigation Wing of Sale Tax Department. Before the ld. CIT(A), the assessee urged that the purchases shown by assessee are genuine. The payments of purchases were made through account payee cheques. The goods were received by assessee and quantitative details and corresponding sales were shown to the Assessing Officer. Though, the assessee fairly stated that they are unable to produce the supplier for verification. It was also urged that the assessee has paid sale tax on behalf of the dealers and relied upon the decision of Hon'ble Gujarat High Court in Simith P. Seth (supra). The ld. CIT(A) after con....