TaxTMI 
TaxTMI 
2019 (10) TMI 1424
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....s "the Act") dated 16/02/2015 relevant to Assessment Year (A.Y.) 2011-12. 2. The assessee has raised as many as 20 grounds of appeal but the effective issue relates to the purchases made by the assessee amounting to Rs. 55,61,085.00 only which were treated as bogus. For the sake of brevity and convenience, we are not inclined to reproduce the grounds of appeal raised by the assessee in the memo of appeal. 3. Briefly stated facts are that the assessee in the present case is an individual and engaged in the business of trading of ferrous and non-ferrous metals. The assessee is running his proprietorship firm under the name and style of M/s Dev metal Corporation. The assessee inter-alia has shown purchases during the year from the parties as....
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....ved with the assessee. But in case of purchases, all the notices remain unserved with the remark "unknown". Similarly, in case of other parties being sales parties and the transporters, either the notices were unserved or there was no response from any of them except in case of one transporter who sought the bilti detail from the AO. iii. There was also some difference between the amount of VAT paid by the assessee in the VAT return and shown in the income tax return. iv. As the purchases were not genuine and therefore the sales shown by the assessee is also doubtful. In view of the above, the AO issued a final show cause notice to the assessee dated 9th January, 2015 for seeking clarification on the observations as discussed above. 5. ....
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....section 133(6) of the Act from the parties were not made available for the rebuttal. 5.6 However, the AO disagreed with the contention of the assessee by observing that none of the purchase party was served the notice issued under section 133(6) of the Act. Therefore, the purchases as claimed are not genuine as these were made from the non-existent parties. 5.7 It was the duty of the assessee to collect the details of the notices issued and the replies in response to such notices issued under section 133(6) of the Act on making the payment of the requisite fees. 5.8 The payment against the purchases was not made in any of the case during the year under consideration. As such the payment was made in the subsequent year. In view of the ab....
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....e, the Ld. CIT(A) treated the entire amount as bogus purchases and confirmed the order of the AO. Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 8. The Ld. AR before us filed a paper book running from pages 1 to 60 submitted that the AO and the ld. CIT-A failed to appreciate that purchases made by assessee from the parties are absolutely genuine as evident from the books of accounts are duly audited and the tax audit report with the financial statement is placed at pages 43 to 50 of the paper book. 8.1 The documentary evidences amply prove the purchases made from the parties in question are absolutely genuine. Hence, question of making any disallowance in respect of the same does not arise at all. 8....
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....cumentary evidence. 10.2 From the preceding discussion we also note that the assessee has claimed to have made sales against such purchases which have been admitted by the Revenue. As such in our considered view, such sales cannot be executed without having the corresponding purchases. There was no defect pointed out by the authorities below insofar the sales made against such purchases. Moreover, there is also no allegation regarding the genuineness of the books of accounts which were duly audited under the Income Tax Act. 10.3 However, before parting we cannot ignore the practice prevailing in the business industries to purchase the goods from the grey market and subsequently justify such purchases by obtaining a purchase bill from the ....
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....nable under the facts and circumstances of the case. Therefore, for the above purposes we estimate Rs. 50,000 and accordingly the- order of the CIT(A) is modified and the addition to the extent of Rs. 50,000 is sustained and balance addition of Rs. 26,89,407 is deleted out of the total addition made of Rs. 27,39,407." In view of the above, we direct the AO to make the ad-hoc addition on such purchases as discussed above. Hence the ground of appeal of the assessee is partly allowed. 10.5 The assessee has raised the additional ground of appeal vide letter dated NIL which was received dated 19-3-2019 as detailed under: The appellant, through oversight, could not raise in the original appeal memo, the following legal ground of appeal and the....