9911796707
TMI Blog2015 (7) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... see is engaged in the business of trading of electrical/electronic accessories. On perusal of the records, the Assessing Officer (AO) noticed that the assessee had made purchases amounting to Rs. 15,34,416/- from M/s Ankit Electronics, 9/2830, Kailash Nagar, Delhi-31 in the months of May and June, 2006. This amount was seen to have been paid in cash in small installments between July, 2006 to March, 2007. No payment was made through cheques or drafts. To ascertain the genuineness of these purchase transactions, the AO issued summons u/s 131 of the Incometax Act, 1961 (hereinafter called 'the Act') on M/s Ankit Electronics for personal attendance along with books of account. The summons were received back with the postal remarks to the effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 19,500/- and no Permanent account of this party was given, the AO proceeded to conduct further inquiry. On going through the invoices claimed to have been issued by Ankit Electronics, it was seen that phone no. 22544222 was mentioned thereon. On inquiry from MTNL, it transpired that this phone no. belonged to M/s Cipla Industries and was installed at a different address. When a call was made at this phone number, the respondent confirmed that it belonged to M/s Cipla Industries and not to M/s Ankit Electronics. Considering all these facts, the AO held the purchases amounting to Rs. 15.34 lac as bogus and made addition for the above sum. The ld. CIT(A) sustained the addition. The assessee is aggrieved against this addition. 4. We have he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices. 6. The next plank of the arguments of the ld. AR was that the assessee maintained its stock register and when the stock registers are properly maintained, then, no addition can be made even if the purchases are bogus. To buttress this contention, he relied on certain decisions. In principle, we agree with this view that when stock registers are maintained and value of the goods is not in dispute, then no addition can be made on this score. However, we find that the position obtaining in this case is quite at variance. It is manifest from the audit report of the assessee that no stock registers were maintained. The auditor has qualified his report by giving remarks against column no. 28(a): "It is not possible to verify the stock si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he current year's GP rate at 3.96% dipped from the preceding year's gross profit rate of 4.41%. In the absence of any independent reasons to justify decline in the GP rate, it is such reduction in the profit, which was sought to be achieved by over-invoicing transactions through fictitious bills raised in the name of M/s Ankit Electronics. Considering the totality of facts and circumstances of the instant case, we are of the considered opinion that the preceding year's gross profit rate of 4.41% be applied on the total turnover of the assessee at Rs. 5,99,54,644/- for making addition towards the income which the assessee sought to conceal by raising fake invoices. This would mean sustenance of addition for a sum of Rs. 2,69,796/-. We order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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