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TMI Blog2015 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... t supporting evidences. In these peculiar fact and circumstances of the case, we are of the opinion that in the interest of justice the disallowance should be restricted to 11% for the alleged doubtful purchases i.e. ₹ 3.09 Crores or to the peak investment whichever is higher. In short, we are partly reversing the order of the FAA. Effective ground of appeal filed by the AO is rejected. In light of our discussion, CO filed by the assessee is treated as infructuous. - Decided against assessee. - ITA No. 684/Mum/2014, Cross Objection No. 53/Mum/2015 - - - Dated:- 22-7-2015 - Joginder Singh, JM And Rajendra, AM For the Appellant : Shri Dharmesh Shah For the Respondent : Shri Asghar Zain VP-Sr AR ORDER Per Rajendra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 3,09,54, 330/-made on account of non-verifiability. According to the AO, the assessee had shown, purchases from seven parties namely M/s. Nisha Enterprises (NE), M/s. Om Corporation (OC), M/s. Blue Nile Enterprises (BNE), M/s Naman Enterprises (Naman), M/s Savita International (SI) Navdeep Trading Corporation (NTC) and M/s Aryen Sales Corporation (ASC), that genuineness of the purchase from those parties had not been proved. The AO observed that the assessee had not produced the parties, that it had not produced any evidence in support of its explanation, that it had also not given any information regarding delivery-Challan No., Inward/Outward register entry number, that notices u/s.133 (6) of the Act were issued to the above seven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a list of about 2,059 dealers who had issued bills but not paid the VAT had been displayed by the Sales Tax Department on its Website, that possibly the names of those seven parties could have appeared in the said list, that the AO did not make independent enquiry from the sale tax department nor had issued summons u/s.131 of the Act to those parties to know the actual facts, that material was received at construction site and payments were made through A/c payee cheques as evident from the bank statement of the assessee, that it had provided all the details, that the time granted was hardly a week, that the AO had not granted opportunity of cross examination to the assessee. In support of its contention, the assessee submitted the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, that it was not able to produce the parties, that genuineness of purchases shown in the name of those parties was not established, that the case laws cited by the assessee were having different footing and context, that burden of proof had been discharged by the assessee. He further held that purchases from the seven parties had not been fully established, that the book result of the assessee could not be accepted, that it was not the simple case of trading i.e. a purchase and sales of goods, that it was the case where construction activities were done which required inputs of material, that the AO had not been able to point out that such material so shown had not been utilised in construction of buildings, that there was a cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Modern Construction Company 5% 2. Kanhiyalal chaudhary 8% (before interest depreciation) 3. Aggarwal Construction company 11% 4. Prabhu Dayal Kanojiya 8% 5. Associated Contractors 4% 6. BDR Projects Pvt. Ltd. 8% Total 42% Average of Six Case 7% As per the FAA the AO had not analysed the facts of each cases, that he had merel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases of ₹ 3.09 Crores only, that consumption of goods was not doubted by the AO or the FAA, that the AO did not provide opportunity of cross examination of two parties who have denied the transactions, that all the parties were paid through banking channels, that the FAA was not justified in applying uniform rate of net profit on entire purchases, that there was no evidence was that money was received back by the assessee. He alternatively argued that a reasonable rate of GP/NP could be applied to the doubtful purchases. He relied upon the cases of. 5. We have heard the rival submissions and perused the material before us. The undisputed facts are that the assessee is a builder, that the AO made inquiries about purchases made by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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