2018 (11) TMI 1974

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....nt of non-genuine purchases from Rs.1,15,56,443/- to Rs.23,11,280/- 3. The brief fact of the case is that assesee has filed its return of income on 08/08/2013, declaring total income at Rs.10,62,310/-. Subsequently, the case was selected for scrutiny by issuing of notice u/s.143(2) of the Act, on 30/09/2014. In the instant case the ld.AO has received information from the Investigation Wing that search and seizure action u/s.132 of the Act, was carried out in the case of Bhanwarlal Jain & others on 07/10/2013, it was stated that above group was involved in providing accommodation entries of purchases etc. and the assessee was one of the beneficiary who have received accommodation entries pertaining to bogus purchases from the following pa....

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.... profits for the year under consideration. Subsequently, 25% of such purchases amounting to Rs.1,15,56,443/- for want of non-verification was treated as bogus and added to the total income of the assessee. 6. Aggrieved assessee has filed an appeal before the ld.CIT(A). The ld.CIT(A) has restricted the disallowance upto 5% of the bogus purchases which works out to Rs.23,11,280/-. The relevant part of the decision of ld.CIT(A) is reproduced as under: 8.6 The Id AO has not discussed these details and evidence in the assessment order. Apparently, he has neither examined nor found any defects so as to discredit them. The appellant has also produced day - today stock register. As per the stock register, if one reduces the impugned pur....

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....ore Id Assessing Officer. However, the purchase bills, invoices , the daily inventory register, tally with the purchases and sales made. This shows that the purchasers have been made, but may not be from the parties, from whom purchase invoices have been obtained. The only possibility is that the appellant might have inflated his purchases by taking the invoices from the suppliers of bogus bills9S) In view of this, it is not just or reasonable to treat the entire purchases as bogus or to treat as 25 % as bogus when corresponding sales have not been doubted by the Id Assessing Officer. No need to stress that there cannot be sales without corresponding purchases. In a case, where regular books of accounts are maintained and the books of accou....

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....ed as integral part of this order. 8.11 Respectfully following the binding decision of Hon 'bleGujarat High Court, and above mentioned judicial precedents, I am of the considered opinion that disallowance of 5 % pf the impugned purchase would be reasonable and would meet the ends of justice. Hence, the disallowance is restricted to 5% of the impugned purchases for the Astt Year 2013-14. The disallowance works out to Rs. 23,11,280/- for Assessment Year under appeal. 7. During the course of appellate proceedings before us the ld.DR, has supported the order of the AO. On the other hand, nobody has attended the hearing from the side of the assessee and the adjournment request filed by the ld.counsel is rejected as considered to ....