2020 (7) TMI 792

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....0 vide order dated 30.4.2019. 2. Brief facts of the case are that assessee in this case is engaged in the business of trading in steel. The Assessment in this case was reopened upon receipt of information from the sales tax Department that assessee has made bogus purchases. The assessee submitted the purchase vouchers and the payments were made through banking channel. However the suppliers were not produced before the assessing officer. Sales in this case were not doubted. The assessing officer made the disallowance at the rate of 12.5% of the bogus purchases. The assessing officer did not make any enquiry of his own with the alleged bogus suppliers. However the assessing officer noted that assessee has provided Stock statement and the ....

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....e. 6. Upon careful consideration we find that addition in this case has been solely made by the assessing officer on the reasoning that upon enquiry by the sales tax Department it has been found that assessee is beneficiary of bogus purchases from the parties mentioned. Assessing officer has not issued any notice to these parties. He has noted that assessee has furnished the Ledger accounts and the purchase invoices. He has also noted that assessee has furnished stock statement wherein the purchases as duly entered. The assessing officer has not doubted the sales. In these circumstances the assessing officer concluded that assessee has made the purchases through grey market and hence following the honourable Gujarat High Court decision C....

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....t assessee submitted that no stock register was maintained the purchases to sales cannot be tallied item-wise. We find that this observation of the learned CIT is in direct contrast with the finding of the assessing officer. Assessing officer has found that assessee has duly maintained the stock statement the purchases are duly mentioned therein. Be as it may when learned CIT is giving a finding that assessee has not been able to tally the sales to the purchases and as per the learned CIT the purchases are hundred percent bogus, then the natural corollary was that learned CIT should have rejected the sales as well. Since learned CIT has not done so the observations of the learned CIT do not support the case for 100% disallowance. Moreover, ....