TaxTMI 
TaxTMI 
2020 (4) TMI 853
X X X X Extracts X X X X
X X X X Extracts X X X X
....of disallowance u/s 69C / bogus purchases. Facts in all appeals are also common, therefore, with the consent of parties, all appeals were clubbed, heard and are decided by consolidated order. For appreciation of facts, the appeal for assessment year 2009-10 is treated as lead case. In this appeal, the assessee has raised the following grounds of appeal:- "I. REOPENING OF ASSESSMENT PROCEEDINGS U/S 147 BAD IN LAW 1. The assessment proceedings ought not to have been re-opened u/s 147 of the I. T. Act 1961. 2. The reopening u/s 147 is bad in law and the order is required to be quashed. II. ADDITION U/S 69C OF Rs. 15.10,042/- ON ACCOUNT OF NON GENUINE PURCHASES 1. The Learned CIT (A) erred in confirming total purchases amounting to Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ambeshwar Trading Pvt Ltd Rs. 33,282 Total Rs. 5,35,179 3. In order to verify the transaction, the AO issued notices u/s 133(6) to all the parties. The notices were returned unanswered with the remark by postal authorities "not found". The assessee was also given opportunity to prove the genuineness of transaction. The AO recorded that no response was made by assessee. The assessee ultimately filed its reply dated 21-10-2013 and furnished party-wise details of purchases. The assessee was again served notice dated 23-12-2014 to provide the details of purchases, copy of bills and other documentary evidence to substantiate the purchases. The AO noted that no further reply was furnished by assessee. The AO disallowed the entire purc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hed by the assessee. The AO has not rejected the books of account nor disputed the sale of assessee. The sales of assessee were not possible without purchases. The AO made disallowance of entire aggregate of purchases shown from the tainted / alleged hawala parties. The Ld. CIT(A) confirmed the addition by taking view that the assessee not complied with his notices. The Ld.AR of the assessee submits that assessee has shown gross profit @8.7%, 8.72% and 12.64% for assessment years 2009-10, 2010-11 and 2011-12, respectively. The Ld.AR furnished the copy of following 12 decisions and would submit that in all cases additions were made on gross profit ratio:- Sr.No List of Case Laws I List of Case Laws Relied Upon II Case Laws on GP ratios....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the assessee not provided sufficient documentary evidence to prove the genuineness of purchases. The assessee failed to substantiate that the material purchased by assessee was transported to the assessee as no receipt of transportation was furnished by assessee. The assessee has neither substantiated the genuineness of purchases before AO nor filed any substantive evidence before Ld. CIT(A). The Ld. CIT(A) passed the ex-parte order. The Ld. DR further submits that the sales-tax department as well as the Investigation Wing of income-tax department made full-fledged enquiry / investigation about the modus operandi of the hawala traders, who were indulging in providing accommodation entries without actual delivery of goods. The assessee is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on merit, the technical objection should not take precedence over the merit of the case; rather, we are of the view that when substantial justice and technical considerations are pitted against each other, substantial justice should prevail over the technical consideration. Therefore, considering this principle, we, instead of going into the controversy as to when the orders impugned were communicated, in absence of any evidence, we treat the submission of assessee in form 36 as prima facie, correct. 13. Now turning to the validity of addition on account of alleged bogus purchases. There is no dispute that in the re-assessment order, the AO made addition on account of bogus purchases. The AO made 100% of the alleged bogus purchases. The AO....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... number of decision as referred above including the recent decision of Honourable jurisdictional High Court in PCIT vs Rishabdev Technocable Ltd (supra) where the Hon'ble jurisdictional High Court in case of assessee, who was engaged in business of manufacturing and dealer of industrial power drilling instrument for AY 2010-11, while considering the question of law on disallowance of similar bogus purchases, upheld the addition on estimate basis by following the decision of Hon'ble Gujarat High Court in CIT vs Bholanath Poly Fab (P) Ltd 255 ITR 290 (Guj) wherein it was held that when purchases were not traceable, profit element embedded in such purchases would be subjected to tax and not the entire amount. 14. We are also of the view that ....