2011 (11) TMI 843

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....nt's case was selected for scrutiny and assessment was completed making certain additions and disallowances. As against this the appellant had preferred an appeal before the learned CIT (A)- IX. The learned CIT (A) allowed all the grounds but restricted the disallowance on account of sundry creditors for purchases to 10% of Purchases. 3. The Learned CIT (A) failed to appreciate the fact that the appellant had duly provided all the details for purchase and sales, even the complete quantitative details of the purchases, sales, opening and closing stock were also furnished. 4. The Learned CIT (A) failed to justify adhoc disallowance of 10% of total purchases, when the genuineness of the transaction were not disputed. ....

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....d rate per piece. For the reasons stated above, even though the purchases made through the local shandies the sundry creditors appear in the books of the assessee bogus. The assessee has stated that all the sundry creditors are related to purchases made during March 2008. As per the details provided by the assessee, total purchases made during the month of march is Rs. 1,05,73,194. At the same time total quantum of sundry creditors (related to four purchasing center at Delhi, Ahemadnagar, Miraj, Sholapur) is Rs. 4,19,65,277/-. I have accepted the theory of the assessee that all the sundry creditors are related to purchases made during March 2008. Even though we will consider the assessees contention, still outstanding sundry credit....

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....or the outstanding balance as on 31.03.2007. iv. All the payments are made by cash only. Therefore genuineness of the purchases cannot be verifiable. v. Since the address is not available we could not verify number of pieces purchased and rate per piece. 8.9 During the course of appellate hearing, the AR of the appellant represents that it Is true that all the purchases are made through the above 4 centers in cash only through the local shandies who are doing trade in that shandies regularly but not having permanent establishment. The AO has called for certain details and the appellant has provided them to a great extent, but since the very nature of this trade which is unorganized, furnishing complete and precise....

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....on on suspicion and surmises and the ld. CIT(A), although arriving at the conclusion that the purchases shown by the assessee was genuine, but made addition on ad-hoc basis at 10% of the total purchase of four centres without bringing any material on record, such as, the gross profit shown in the present year was lower than that shown by the assessee in the immediately preceding year or that the cost of goods sold to the total turnover of the assessee as compared to the cost of goods sold to the total turnover of the assessee in the current year was higher than that in the immediately preceding assessment year. The ld. AR also submitted that it will be seen from the assessment order that the valuation of the closing stock with the quantitat....