TaxTMI 
TaxTMI 
2022 (1) TMI 728
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....g Officer on account of bogus purchases, without appreciating the fact that the assessee had failed to produce bills, vouchers and other documentary evidences in support of his claim and without considering the latest Apex Court decision in the case of N.K. Proteins Ltd. wherein it is held that once it is proved that the purchases are bogus then addition should be made on entire purchases and not on profit element embedded in such purchases. (ii) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in estimating the profit from Hawala purchases by disallowing only Rs. 50000/-, being 12.5% of the bogus purchases as even the basic onus of producing delivery challans, transportation details etc. wer....
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....nditure. In order to ascertain the claim of purchases made by the appellant, the AO conducted enquiries by issuing notice u/s.133(6) of the Act to the above referred party calling for copies of ledger account of appellant in their books, nature of goods sold along with sample copies of bills issued, copy of delivery challans for goods dispatched alongwith transport bills, copy of bank statement showing the relevant receipts and outstanding payment received and copy of their return of income for the relevant year. As the notice returned unserved, the appellant was asked by the Assessing Officer to produce the party alongwith the documents for verification. However, the appellant failed to produce the party, brokers or transporters in spit....
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....ister and sold to M/s,Akshay Enterprises. Hence, the sales remain uncontroverted and it cannot be said that purchases have not been made. Neither is the A.O. saying so. What he has outlined in para 4.4 is that the goods are purchased from someone else in cash while the bills are taken from Hawala operators. In consideration thereof, it is also observed that the appellant has been unable to prove the purchase of goods from the identified bogus billers by either producing the parties, brokers, transporters or any other documentary evidences. It is also seen that the appellant had not made payment for the purchases during the year. The claim of payment of Rs. 4,00,000/- to M/s.Sumeet Sales vide cheque No.772039 is made on 05.10.2009 i....
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....et the ends of justice. Therefore, I direct the AO to estimate profit @ 12.5% of the alleged bogus purchases, which works out to Rs. 50,000/- (@12.5% of Rs. 4,00,000/-) and restrict the addition to Rs. 50,000/-. The appellant gets a relief for the balance amount of Rs. 3,50,000/- on this account and also of Rs. 5,04,800/-on account of having offered this amount to tax in A.Y. 2012-13, subject to verification of the same by the Assessing Officer. With regard to the second aspect of the ground i.e. the addition having been made u/s.69C as unexplained expenditure. It is observed that Section 69C is for unexplained expenditure which is incurred by an appellant i.e. out of books expenditure. It is not for bogus expenditure made in cash ....