2019 (12) TMI 1222

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....y the Appellant when all the necessary supporting documents were submitted by the Appellant. C. The Ld Commissioner (Appeals) has failed to consider and appreciate the purchase of RS.737291/- as genuine purchase from M/s. Swastik Enterprises, in the light of the fact that vide letters dtd.27.6.2016, 31.5.2016 and 24.5.2016, the Appellants had filed confirmation of accounts duly signed by Prop. of M/s. Swastik Enterprises, produced adequate evidences i.e. sale bills, delivery challans and octroi receipts from M/s. Swastik Enterprises and submitted certificate dated 12.12.2013 given by M/s. Swastik Enterprises stating that they had delivered the textile auxiliary and submitted ledger confirmation accounts. D. The Ld Commissioner (Appeals) has failed to consider and appreciate that there were two different suppliers under the same name Ms. Swastik Enterprises, but having different addresses, different VAT Tin Number and the A.O. in his order dated 16.1.2014 in Para 6 only refers to one Affidavit of Shri Abdul Sari Jameer Ahmed Khan, Prop. of M/s. Swastik Enterprises having TIN NO.27610669252-V, this supplier is different and therefore the purchase of RS.737291 from M....

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....y assessee be treated as return in response to the said notice. The Assessing Officer after serving notice under section 143(2) dated 25.03.2013 proceeded for re-assessment. During the assessment, the Assessing Officer noted that the assessee has shown purchases from the following parties, which was declared as hawala dealers by the Sale Tax Department, Government of Maharashtra. Name of the parties Bill amount (Rs.) M/s Shreeji Commercial Corporation 1,43,000/- M/s Swastik Enterprises 7,81,491/- M/s Pawan Enterprises 44,200/- Total 9,68,691/- 3. The assessee was asked to substantiate the purchases and to furnish the name of dealers, Bills &, Vouchers, description of goods purchased, quantity, rate and amount, the date of dispatch of goods and the name of place along with mode of transportation by road or other mode, Vehicle Number, and payment details. The assessee was also asked to furnish the corresponding sales of goods. The Assessing Officer noted that the purchases reflected in the books of account of the alleged hawala parties, were not properly supported with the relevant document like transportation bills, delivery challan, goods receiving ....

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....eflected in the Tax Audit Report. The assessee also filed a certificate from Swastik Enterprises dated 12.12.2013 certifying that the goods/materials were delivered to the assessee. The assessee also furnished the VAT amount paid by assessee. The Assessing Officer and the ld. CIT(A) relied upon the statement/affidavit of three parties without giving any opportunity to the assessee. The ld. AR of the assessee submits that though the entire addition is liable to be deleted, however, to avoid the protracted litigation, the disallowance may be restricted to the reasonable percentage keeping in view the business activities of the assessee and the history of Gross Profit (GP) declared by the assessee in past years. In the AY 2007-08 the assessee declared GP @ 2.97%, in AY 2008-09 @ 5.20% and during the under consideration (AY 2009-10) @ 4.73%. for subsequent years the assessee declared GP @ 3.73% for AY 2010-11 and at 3.44% for AY 2011-12. The disallowances sustained by ld CIT(A) is on higher side. 6. The ld. AR further submits that there is delay of 13 days in filing the present appeal. In support of application for condonation of delay, the assessee has filed the affidavit of Shri S....

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....ed. 10. Now we are adverting to the merits of grounds of appeal. We have seen that the assessee has raised as many as seven grounds of appeals. Ground No.1 relates to rejection of books of accounts, we noted that the ld AR for the assessee has not argued in support of this ground, therefore, this ground is treated as not pressed and dismissed. Rest of the grounds of appeal are related to the disallowance of bogus purchases. The assessing officer made the additions/ disallowance by taking view that the assessee has shown purchases from the parties which are identified as hawala dealers by Sales Tax department of the State Government. The list of such hawala dealers was forwarded by the sales tax department to the investigation wing of Income -tax authorities and the assessee was shown as one of the beneficiary. And that during the assessment the assessee could not substantiate delivery of such purchases. The assessing officer made 100% disallowances of such purchases. However, on appeal the ld CIT(A) after considering the disallowance @ 25% of the bogus purchases noted that disallowance @ 25% of hawala purchases are is less than the suppressed GP, therefore, disallowance to the e....