TaxTMI 
TaxTMI 
2019 (3) TMI 1874
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....s erred in restricting the addition to Rs. 6,43,466/- out of the total addition of Rs. 71,95,000/- on account of bogus purchases. ii) On the facts and in the circumstances of the case, the Ld .CIT(A) erred in ignoring the factum of bogus purchases of Rs. 1,45,23,400/- from M/s Rajasthan Metals which was specified in the remand report submitted by the Assessing Officer before the ld. CIT(A)." 3. Briefly stated, the facts of the case are that as per information, a search action was carried out in the case of Shri Navneet Kumar Jain and his son, Shri Vaibhav Jain alongwith Jaguar Group on 26.04.2010 from which it came to the notice of the department that these persons were engaged in providing accommodation entries in the form of b....
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....s with respect to confirmations. 6. In spite of the specific requisition, the assessee did not file the requisite details. The Assessing Officer was of the opinion that the assessee has nothing to say and treated the transaction of purchases of Rs. 71.95 lakhs as bogus and added back the same to the total income of the assessee. 7. The assessee strongly agitated the matter before the ld. CIT(A) and pointed out that the purchases made from Rajasthan Metals were to the tune of Rs. 1.45 crores and the Assessing Officer has doubted only purchases to the extent of Rs. 71.95 lakhs which means that the Assessing Officer has accepted the genuineness of the purchases from the same supplier for the balance amount. It was further contended that ....
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....ppellant. Therefore in my considered view addition of Rs. 1,45,23,400/- as proposed by the AO in the remand report cannot be made in its entirety since the sales could not be made without making purchases. At the same time, it cannot be denied that there could have been leakages in this process and therefore it would be in the fitness of things to estimate the income of the appellant having regard to the industry's barometers and the trading results in the case of the appellant in the subsequent years. In order to arrive at a fair estimate of income further inquiries were made and following information was called from the appellant in terms of provisions contained in section 250(4) of the Act: i) G.P rate offered by the appellant f....
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....it would be fair to apply G.P rate of 5% on the turnover declared by the appellant and an addition to the extent of Rs. 6,43,466/- is upheld as calculated below:- Sales (accepted by AO) Rs. 5,54,49,023 23/- Gross Profit (estimated @ 5%) Rs. 27,72,451/- Less: Gross Profit declared (@ 3.83%) Rs. 21,28,985/- Difference to be taxed Rs. 6,43,466- 6.5.9 Hence the addition on account of accommodation entries in the form of bogus purchases will be restricted to Rs. 6,43,466/- as against Rs. 71,95,000/- made by the AO and the AO is directed accordingly to restrict the addition to Rs. 6,43,466/-and the appellant gets relief of Rs. 65,51,534/-. This ground of appeal is partly allowed." 9. Aggrieved....
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.... 13. It is a fact that during the year, the assessee has made total purchases from Rajasthan Metal to the tune of Rs. 1.45 crores which is about 26% of the total turnover of Rs. 5.54 crores, though, in his remand report, the Assessing Officer had requested the ld. CIT(A) to enhance the additions to Rs. 1.54 crores. Assuming that the entire purchases from Rajasthan Metals was bogus, then it would be commercially impossible for the assessee to sell Rs. 5.54 crores of goods. Moreover, sales effected by the assessee has been accepted by the Sales Tax Department. 14. Further, we find that the assessee has given complete quantitative details in the form of stock register of raw material as S.S. Patti which is exhibited at page E-3/81 ....