TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 641
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....in the books of account apart from VAT paid on such purchases. 1.2 The learned CIT(A) while confirming the addition to the extent of 10% of alleged bogus purchases on account of profit which the appellant could have saved has failed and/or ignored the fact that the appellant had already offered about 5% profit on such purchases in the books of account and had also paid VAT of Rs. 1,16,987/- on the said purchases as reflected in the books of account and hence the learned CIT(A) ought to have given credit of the same. 2. The learned CIT(A) erred in law and on facts in confirming the addition of Rs. 14,18,613/- on account of disallowance of interest merely on surmises and assumptions as well as without proper consideration and appreciation of the facts of the case. In view of facts and submissions filed as well as legal position, the impugned addition of Rs. 14,18,613/- requires to be deleted. 2.1 The learned CIT(A) failed to appreciate the fact that the appellant was having sufficient interest free funds available at its disposal and thus as held by various courts of law including the Hon'ble ITAT, Ahmedabad Bench, no addition is warranted. 3. The learned CIT(A) erred in ....
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....discussed while adjudicating these grounds of appeals:- Ground No. 1 (Confirming addition @ 10% of bogus purchases) 4. During the course of assessment, the assessing officer stated that assessee has not furnished the complete address of the following 10 parties from whom the assessee had claimed to have purchased gold jewelry:- Sr. No. Name Purchase shown (Rs.) 1. Mahendrabhai K. Shah 989768/- 2. Roopesh Rameshchandra Soni 951475/- 3. Manoj B. Soni 935984/- 4. Lalo Babulal Soni 978587/- 5. Jayaniilal mandalia 1006995/- 6. Tinabhai Jayantiial 1047888/- 7. Dharmendra Babulal 1006880/- 8 Batukbhai Kanjibhai Soni 916781/- 9. Bipinbhai Chimanlal Chokshi 917650/- 10. Girish Himmatlal 9,52,140/- 11. Narendra Babulal 1052175/- 12. Rakesh Chandulal Chokshi 942424/- The assessee has explained that he had made purchases from the aforesaid parties through account payee cheque only and the name of these parties were reflected in the bank statement. Thereafter, the assessing officer has asked the assessee to submit the detail of cheque payment and name of the bank etc. On the basis of information received from the assessee, the ....
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....dered the facts of the case, assessment order and appellant's submission. Assessing officer disallowed purchases of gold jewellery in the name of certain persons on the grounds that the purchases are not verifiable and the payments for the same were made otherwise than account payee cheques. Appellant' had disclosed purchases from certain parties as mentioned in the assessment order quoted above however on verification of these parties, AO found that these parties do not exist at the given address and appellant also could not produce these parties or provide their current whereabouts. Therefore purchases disclosed by the appellant in its books are clearly unverifiable. Appellant also agreed that he is not able to verify the purchases. Appellant mentioned the prevailing practice in jewellery market. Appellant also submitted that as per quantity tally, jewellery purchased were sold and therefore even if purchases are from unverifiable parties, appellant would have purchased from somewhere else otherwise sales should also not be considered. It is not in dispute that appellant sold the gold jewellery claimed to have been purchased from aforesaid parties. Since sales of these gold....
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....T(A) as cited above in this order that assessing officer has found that parties from whom the assessee has made purchases were not existed at the given addresses and the assessee also could not produce those parties for verification and also could not provide their current location and addresses. Even the notices issued u/s. 133(6) by the assessing officer could not be served on the addresses given as per the bills produced by the assessee. Looking to the above facts and circumstances, the ld. CIT(A) has given a substantial relief to the assessee on the ground that sale of gold jewelry items were reflected in the P & L account and the addition of entire purchases cannot be made. Considering the above, we observe that ld. CIT(A)'s decision to restrict the disallowance to 10% of such purchases on the reasoning that assessee has earned extra profit from the purchases made from un-registered parties is justified. Therefore, we do not find any merit in the appeal of the assessee and the same is dismissed. Ground No. 2 (Disallowance out of interest Rs. 14,18,613) 7. During the course of assessment, the assessing officer noticed that assessee has given interest free advances to various ....