TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 652
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....s before us:- A. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in restricting the disallowance of 15% of the total of bogus purchase transaction instead of 100% of the total amount of bogus purchase made by the AO for the A. Y. 2010-11?" B. " Whether on the facts and in the circumstances of the case and in law. the Ld. CIT (A) has erred in not considering that the addition was made on the basis of information received from DIT(Inv.), Mumbai and Sales Tex Department, Maharashtra with regard to bogus purchase made by the assessee from dealers without supply of actual goods?" C. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the hawala operators have admitted on oath before the Sales Tax Authorities that they have not sold any material to anybody?" D. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the assessee could not prove the genuineness and creditworthiness of purchase transactions during the course of assessment proceedings?" E. "Whether on the facts and circumstances of th....
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....,07,515 Not known 6 M/s Rashmi Enterprises Purchases 1,10,87,866 No reply 4. In the backdrop of the aforesaid facts the A.O directed the assessee to substantiate the genuineness and veracity of the purchases which were claimed by her to have been made from the aforementioned parties on the basis of supporting documents, viz. purchase bills, proof of delivery of goods, ledger accounts of the parties, bank statements etc. Also, the assessee was directed to furnish in a specified form the names and addresses of the aforesaid supplier parties, details of the goods purchased from them, as well as the details of the purchases that were made from them in the preceding years a/w the dates on which payments were made to them. In compliance, the assessee though placed on record the purchase bills and the delivery challans, however, she failed to file supporting documentary evidences say transport receipts etc. On a perusal of the details before him, it was observed that the A.O that there was a huge time gap between the date on which the impugned purchases were claimed by the assessee to have been made from the aforementioned parties and the respective dates on which correspondin....
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....r of fact borne from the record that the assessee had failed to substantiate her claim of having made genuine purchases aggregating to Rs. 3,54,86,396/- from the aforementioned six parties to the satisfaction of the A.O. Insofar the view taken by the CIT(A) that the assessee had failed to substantiate the genuineness and veracity of the impugned purchase transactions is concerned, the same not having been assailed any further in appeal by the assessee before us had thus attained finality. Our indulgence in the present appeal has been sought by the revenue, for adjudicating, as to whether or not the CIT(A) is right in law and the facts of the case in scaling down the disallowance of the entire amount of the impugned purchases of Rs. 3,54,86,396/- to an amount of Rs. 56,55,225/- i.e 15% of the value of the impugned purchases. 9. As is discernible from the order of the CIT(A), we find that he was of the view that as the assessee had purchased the goods/material though not from the aforementioned parties but from the open/grey market, therefore, the addition in her hands was liable to be restricted only to the extent of the profit which she would have made by procuring such goods at a....
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.... the AO. However, the alleged parties have not been produced before the AO despite communication that the notice u/s.133(6) issued. has been returned by the postal authorities. No confirmation of ledger account of the alleged panty has been submitted. The stock register and bank account statements of the afore-mentioned parties have not been to the AO. 7.2.8 In the given facts and circumstances, though to a large extent the appellant"s explanation are backed by documentary evidence, it does not mean that the appellant has established genuineness of the impugned purchases in. totality of the circumstances. Although appellant has produced documentary evidence to fairly establish that the goods in question were indeed consumed in the business activity of the appellant, it may be mentioned here that the Maharashtra Sales Tax Department had unearthed a large number of hawala dealers as mentioned in the assessment order. In a large number of cases who had purchased goods from such hawala dealers, the I.T Department has initiated proceedings and completed assessments treating such purchases as bogus. Such assessments have been challenged in appeals before the Hon'ble Tribunals and H....
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.... assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P, rate on purchases at the same rate of other genuine purchases, the decision of the Gujarat High Court in the case of N.K. Industries Ltd. (supra) cannot be applied without reference to the facts, In fact in paragraph 8 of the same Judgment the Court held and observed as, under in So far as the question regarding addition of Rs,3,70,78,125/- as gross profit on sales of Rs. 37.08 Crores made by the Assessing Officer despite the fact that the said sales had admittedly been recorded in the regular books during the Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6% gross profit is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We ....
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....6/Mum/2020 (AY 2010-11) 12. We shall now take up the appeal of the revenue which finds its genesis in the order passed by the A.O u/s 143(3) r.w.s. 147, dated 11.02.2016 in ITA No. 1526/Mum/2020. The revenue has assailed the impugned order on the following grounds before us : A. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in restricting the disallowance of 15% of the total of bogus purchase transaction instead of 100% of the total amount of bogus purchase made by the AO for the A. Y. 2010-11?" B. " Whether on the facts and in the circumstances of the case and in law. the Ld. CIT (A) has erred in not considering that the addition was made on the basis of information received from DIT(Inv.), Mumbai and Sales Tex Department, Maharashtra with regard to bogus purchase made by the assessee from dealers without supply of actual goods?" C. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the hawala operators have admitted on oath before the Sales Tax Authorities that they have not sold any material to anybody?" D. "Whether on the facts and in the circumstanc....
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....the Act, dated 11.02.2016 assessed her income at Rs. 4,93,79,011/-. 15. Aggrieved, the assessee carried the matter in appeal before the CIT(A). After deliberating at length on the issue under consideration, the CIT(A) was of the view that as the A.O had not doubted the sales corresponding to the impugned purchases in question, therefore, the addition in the hands of the assessee was liable to be restricted only to the extent of the profit which she would have made by procuring the goods at discounted value from the open/grey market. Accordingly, backed by his aforesaid observation, the CIT(A) after taking cognizance of the average GP rate of 15.88% of the assessee for the last 8 assessment years i.e. A.Y 2007-08 to A.Y 2014-15 worked out the profit element embedded in the impugned purchases at 15% of the value of such purchases of Rs. 20,12,513/-. In the backdrop of his aforesaid deliberations, the A.O restricted the addition in the hands of the assessee to an amount of Rs. 3,01,877/-. 16. The revenue being aggrieved with the order passed by the Ld. CIT(A) has carried the matter in appeal before us. Admittedly, the fact that the assessee had failed to substantiate the veracity of....