TaxTMI 
TaxTMI 
2022 (8) TMI 1019
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.... have been received by our office and same was handed over to our consultant and was under the impression that the matter has been resolved. The negligence or through oversight on account of the consultant, this remained to be unresolved. This fact came to our notice now, thereafter we searched out and immediately paid the appeal fees of the tribunal and got the relevant papers ready. I humbly pray to your honor to condone the delay in filing the appeal for which I shall be grateful to your honor. I always co-operate with the income tax department and once again request you please condone the delay in filing the above and accept the same." 3. In view of the above, the assessee has requested to condone the delay as the same is unintentional and due to circumstances beyond the control of the assessee. On the other hand, learned Departmental Representative ("learned DR') did not raise any serious objection against the application seeking condonation of delay. Having perused the application, which is also supported by an affidavit, we find that the impugned order dated 20/06/2019, was received by the assessee on same date. Thus, as per the provisions of section 253(3) of th....
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....erred in confirming the addition without appreciating the understated vital facts that the purchases are duly supported with necessary documentary evidences including quantitative tally of purchases and sales and there appears no sign of it being bogus and the learned officer accepted the books of accounts. (c) The Id. CIT(A) has erred in holding the impugned purchases to be bogus, in spite of voluminous evidences on record simply on the basis that the current addresses of vendors were not provided and the vendors were not produced before the Respondent. (d) The Appellant prays that the addition/ disallowance of entire 483079/- made in respect of Alleged purchases be deleted. 2. On the facts and circumstances of the case and in law, the CIT (A), erred in dismissing the ground for the appellant's plea of withdrawal of initiation of penalty proceedings u/s 271(1)(c)." 5. The brief facts of the case, as emanating from the record, are: The assessee is engaged in the business of trading in ferrous and non-ferrous metals under the name and style of M/s Prakash Industrial Corporation. For the year under consideration, assessee filed its return of income o....
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....D has med his views about the bogus nature of the purchases made by the appellant from the above parties on the basis of statements recorded by the Sales Tax Authorities as well as further inquiries carried out by him independently. The information received from the Sales Tax authorities was only a piece of evidence in depth independent investigation on the issue. It is not the case of the appellant that he has maintained a proper stock register. The appellant has not been able to establish one to one relationship/nexus between the purchases and sales. The assessee has not been able to produce the parties from whom purchases have been alleged to have been made. The appellant has also failed to produce corroborative evidence in the form of transportation bills etc. to establish that the alleged purchases were actually transported to its premises and entered in the stock register. It is also a fact that the AO has not confronted the assessee with all the information in his possession like statements of the alleged hawala operators. He did not go ahead with money trail of cheques debited in the appellant's bank account towards the alleged purchases though such investigation do not....
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....urchase price paid as mentioned on the invoices/bills cannot be accepted as the correct price paid for the goods purchased from such parties. In view of the same, the possibility of over-invoicing of the material purchased to reduce the profit cannot be ruled out. Therefore, the gross profit rate shown by the appellant for the year under consideration cannot be relied upon. In the circumstances, the correct approach in such transactions would be to estimate the additional benefit or profit earned these purchases and not to disallow the entire purchases from the aforesaid parties. In my view either the purchases from such parties is over invoiced or the purchases were actually made but not from the parties from which it was claimed to have been made and instead may have been purchased from grey market without proper billing or documentation. 4.3.3. In many judicial pronouncements on the test, the Courts have taken a consistent view that in case of non-existent parties from which the purchases are shown to have been made, only a part of such purchases can be disallowed, particularly in such cases where the corresponding sales are dot doubted Alternatively the profit embedded....
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.... "We are of the opinion that the Tribunal committed no error. Whether the purchases themselves were bogus or whether the parties from whom such purchases were allegedly made were bogus is essentially a question of fact. The Tribunal having examined the evidence on record came to the conclusion that the assessee did purchase the cloth and sell the finished goods. In that view of the matter, as natural corollary, not the entire amount covered under such purchase, but the profit element embedded therein would be subject to tax. This was the view of this court in the case of Sanjay Oilcake Industries v. CIT [2009] 316 ITR 274 (Guj). Such decision is also followed by this court in a judgment dated August 16,2011, in Tax Appeal No.679 of 2010 in the case of CIT v. Kishor Amrutlal Patel. In the result, tax appeal is dismissed." (emphasis supplied) 4.3.5 In view of the facts and circumstances of the case and the judicial pronouncements cited above, what can be disallowed or taxed in the instant case, is the excess profit element embedded in such purchases shown to have been made from aforesaid parties. As narrated earlier, the AO in this case has held that various parties from w....
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....see is in appeal before us. 7. During the course of hearing, learned Authorised Representative ("learned AR‟) submitted that in the present case assessee earned gross profit of 5.07% and, therefore, any addition should be restricted to the gross profit as earned by the assessee. 8. On the other hand, learned Departmental Representative vehemently relied upon the orders passed by the lower authorities. 9. We have considered the rival submissions and perused the material available on record. In the present case, addition has been made as the assessee could not produce evidence in support of the purchases made during the year, which are treated as non-genuine by the lower authorities. Assessee has claimed that addition, if any, be made considering the gross profit earned by the assessee, during the year under consideration. It is the claim of the assessee that it has earned gross profit of 5.07%. However, we find that this aspect was not raised and thus, was not considered by any of the lower authorities. Even in its appeal before the learned CIT(A), the assessee did not appear despite issuances of various notices. However, during the hearing before us, learned AR gave ....