TaxTMI 
TaxTMI 
2022 (5) TMI 508
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....ectively. As common issue of dispute is involved in these appeals, therefore same were heard together and disposed off by way of this consolidated order for convenience. 2. In the grounds raised, the assessee is aggrieved with two additions. The first addition being the addition under section 69C of the Act for bogus purchases, where the Ld. CIT(A) has restricted the addition at the rate of 12.5% of the bogus purchases, which has been worked out to Rs.20,55,638/- for assessment year 2007-08; Rs.45,80,975/- for assessment year 2008-09 and Rs.45,79,432/- for assessment year 2009-10. The second addition is under section 68 of the Act, which is in respect of negative cash balance in the cash flow statement prepared by the assessee for justif....
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....ved information from the Sales Tax department that the appellant has shown purchases from 10 bogus concerns. The name of the concerns is mentioned in para 3 of the assessment order. The A.O. extracted information from the Sales Tax Department website. The assessee was asked to show cause as to why the entire amount of Rs. 1,64,45,105/- should not be treated as unexplained expenditure U/s.69C of the Act, 1961. In reply to the show cause issued the assessee submitted that the purchase transactions are genuine and he had received actual delivery of goods. The A.O. however did not accept the contention of the appellant and added Rs.1,64,45,105/- u/s.69C of the Act. 4.2 During the course of appeal proceedings, the appellant filed writte....
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....n able to establish the genuineness of purchases in dispute. The main arguments of the AO on the basis of which he had formed his opinion were- 1. The assessee was not able to submit any lorry receipts or any details regarding transportation of goods. 2. The suppliers from whom the disputed purchases have been made are included in the list of hawala operators prepared by the Sales Tax Department. 3. The suppliers from whom the disputed purchases have been made, were not produced before the AO. 4. The suppliers from whom the disputed purchases have been made, did not comply to notice u/s 133(6). 4.4 The appellant is a trader. The AO in his order has dealt exclusively with the purchases of the appe....
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.... 254 ITR 259 (Supreme Court) that when the sales have not been doubted then there was no question to doubt the purchases and the addition should have been made only to the extent of gross profit. To this extent, I am in agreement with the appellant that if the appellant has fulfilled his onus of making the payments by banking channels and has supplied the address of the sellers, then it cannot be presumed that the sellers were bogus simply because the sellers were not found at the given addresses. However, at the same time it cannot be said that the information provided by the sales tax department should not be taken cognizance of by the A.O. Therefore, after considering the totality of facts and after following the ratio of Saraswathi Oil ....
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....cordingly, uphold the addition for bogus purchases in all the three assessment years. 4.2 As far as second issue of negative cash balance is concerned, we find that the Ld. CIT(A) has duly considered the cash flow statement submitted by the assessee and after calling for remand report from the Assessing Officer, upheld the addition. The Ld. CIT(A) also provided opportunity to the assessee to comment on the remand report of the Assessing Officer, however no compliance was made by the assessee. The relevant finding of the Ld. CIT(A) on the issue of negative cash balance for assessment year 2007-08 is reproduced as under: "5.1 The relevant facts are like this. There was a survey operation in the premises of the appellant on 24.01.2....
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....flect the closing balance of AY 2006-07. The AO further stated that the cash book submitted by the authorized representative of the appellant showing positive cash balance is not correct and there is negative cash balance for AYs 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12. In the concluding remarks the AO wrote the following: "The daily cash register prepared by the assessee through computer and furnished cannot be relied upon as the same was prepared by assessee through computer system as per their convenience and no original cash book furnished for verification with details. 5.3 After the receipt of remand report the case of the appellant was re-fixed for hearing on 30.01.2017. Copy of the remand report was also sent b....