2021 (10) TMI 3

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....assailed the impugned order on the following grounds of appeal before us: "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below: 1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in directing the A.O. to restrict the addition of bogus purchases to 12.5% as against 100% addition made by the Assessing Officer on account of bogus purchases without appreciating the fact that parties from whom theses purchases were made proven accommodation entry providers, as concluded by Sales tax Authorities pursuant to the investigation carried out by them'? ....

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.... MIHIR SALES PRIVATE LIMITED 14,55,449 2. 2010-11 SMARTLINK TRADEX PRIVATEE LIMITED 7,22,532 3. 2010-11 MOTION TRADERS PRIATE LIMITED 28,06,747 4. 2010-11 ABHLASH SALES P. LTD. 4,70,813 5. 2010-11 ASHLEY TRADES PRIVATE LIMITED 2,46,038 6. 2010-11 MERIDIAN SALES AGENCY PVT. LTD. 8,64,360 In order to verify the genuineness and veracity of the aforesaid purchase transactions the A.O issued notices under Sec. 133(6) of the Act to the aforementioned parties, which however were returned unserved by the postal authorities with the remarks "not known/left/not claimed". In the backdrop of the aforesaid facts, the A.O called upon the assessee to substantiate the genuineness on the afor....

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....ee firm. After inter alia making the aforesaid disallowance the income of the assessee was assessed by the A.O vide his order passed under Sec. 143(3) r.w.s 147, dated 17.03.2016 at an amount of Rs. 76,96,490/-. 4. Aggrieved, the assessee assailed the assessment order before the CIT(A). Observing, that the assessee had accounted for the sales corresponding to the impugned purchases, the CIT(A) was of the view that as the assessee had purchased the goods at a discounted value from the open/grey market and not from the aforementioned parties, thus, only the profit element embedded in procuring such goods at a discounted value was liable to be disallowed. Backed by his aforesaid observation, the CIT(A) restricted the addition to the extent ....