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TMI Blog2016 (1) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... - by the Assessing officer, being alleged non-genuine Purchases transactions from two parties. (b) The Learned CIT(A) erred in concluding that the Appellant Company has not discharged the onus to prove that the transactions with the two Parties were genuine. 2. The Learned CIT(A) has erred in not deleting the incorrect amount of Purchase made from Gausiya Sea Foods Rs. 26,85,258/- (instead of the correct amount of Rs. 16,82,685/-), and instead only directing the AO to verify the same and then to consider the amount of disallowance". 2. The brief facts qua the issue raised in the grounds of appeal are that, the assessee is engaged in the business of trading of fish and fisheries products. The AO, in order to verify the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the company itself on the basis of agreed quantity of goods supplied and duly accepted by the suppliers, a copy of which is given to them for their record. The assessee in the case of M/s Om Sai Fisheries from whom purchases of Rs. 35,50,801/- was made, the assessee submitted purchase voucher and confirmation from the party, which was submitted before the AO only. All the payments were made to the party through account payee cheques and to corroborate the same, the bank statement of the assessee was also submitted to the AO. Thus, the genuineness of the transaction cannot be doubted. In respect of the purchases of Rs. 26,85,258/- made from Gausiya Sea Foods, the assessee submitted that the actual purchases made from this party were Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not permanent and even the fish supply from such suppliers are also not permanent. Further, the sales of the assessee have been accepted and the overall profit is high. In such a case when sales and GP is not disturbed then purchases cannot be doubted. Purely by way of alternatively argument he submitted that, at the most if any adverse view is to be drawn, then the addition should be restricted to profit shown by the assessee, which in this year is at 22.9% and for the earlier year 23.5%, therefore, disallowance if at all should be made on the basis of gross profit. 5. On the other hand, Ld. DR strongly relied upon the order of the CIT(A) and submitted that the onus lied heavily upon the assessee to show that purchases made by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been accepted. Even the balancing figure of trading account i.e. gross profit has also not been disturbed. Once all the figures of debit and credit side of the trading account like, opening stock, materials consumed, products sold, closing stock and the balancing figure of gross profit has not been disturbed, then purchases also cannot be doubted unless it is found that purchases have been made outside the books of account from undisclosed sources. Once it is not doubted that purchases have been made through account payee cheques from the disclosed sources in the books of accounts then such purchases cannot be treated as non-genuine or added as a whole as unexplained income or expenditure. At the most if the AO had some doubt about the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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