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TMI Blog2016 (3) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... e order. The AO had re-opened the assessment for the AY.2007-08,invoking the provisions of section 147 of the Act.The reasons recorded by the AO are identical to the decision taken by him for the subsequent AY.s.Therefor,we would adjudicate the appeal for the AY.s.2008-09 and2009-10 before deciding the appeal for the AY.2007-08.Assessee-HUF,is in the business of interlining cloth.Details of dates of filing of returns, returned incomes,etc.can be summarised as under:- A.Y. ROI filed on Returned Income(Rs.) Assessment dt. Assessed Income(Rs.) Dt. of orders of CIT(A) 2007-08 04.10.2007 1,01,090/- 28/01/2014 28,88,380/- 29/04/2014 2008-09 23.09.2008 1,81,465/- 29.12.2010 96,02,730/- 29/08/2013 2009-10 28.07.2009 2,55,336/- 15.12.2011 1,02,07,430/- 29/08/2013 ITA/4629/Mum/13,AY.2008-09: 2. Effective ground of appeal,raised by the AO,is about deleting the addition of ₹ 84.79 lakhs,made by the AO u/s.69 of the Act,under the head unexplained/unproved purchase/investment in purchase.During the assessment proceedings,the AO found that a survey u/s 133-A of the Act was carried out on 13/14- 2-2009 in case of Rakesh Kumar Gupta (RKG),one of the suppliers of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the books of account, that it was maintaining purchase register, sales register, stock register.The assessee submitted comparative statement of sales, gross profit and net profit before the FAA. He called for a remand report from the AO.After considering the available material,he held that the AO had relied upon the statements of RKG to make additions in the hands of the purchaser, that he had not provided the opportunity of cross examination of RKG inspite of specific request made by it,that the assessee had submitted the day to day movement of material alongwith the corresponding sales/inventory of stock, that the books of account of the assessee were audited,there was no adverse comment by the auditors about completeness of the books of account or about the quantitative details, that if the sales were treated as genuine corresponding purchase cannot be considered bogus,that addition could be made only to the extent of some percentage. Finally,he held that the cause of justice would be served by making addition @10% of such purchase in order to fill in gap of difference of GP in recording the said purchase as well to plug any leakage of revenue.He upheld the addition of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned parties be not added to the income. It was explained by the assessee that the statements given by Shri Rakeshkumar M. Gupta and his family members are not correct. It was further explained that purchases and sales are duly reflected in the books of account of the assessee. It was also brought to the notice of the AO that the Affidavit of Shri Rakeshkumar M. Gupta and his family members who have denied in the said affidavit about the activity of issuance of bogus bills. The explanation of the assessee did not find any favour from the AO who was of the opinion that the assessee has availed bogus bills amounting to ₹ 10,59,265/-. The AO went on to treat the purchases amounting to ₹ 10,59,265 from the said Shri Rakeshkumar M. Gupta and his family members as bogus and accordingly added the same to the returned income of the assessee and completed the assessment. 3. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A). Before the Ld. CIT(A), the assessee reiterated his submissions. After considering the facts and the submissions made by the assessee, the Ld. CIT(A) came to the conclusion that an adhoc addition of ₹ 1,35,000/- which is about 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5). In the cases of Ashish Jobanputra(ITA No.2566/Mum/2013).In the case of Nikunj Exim (supra)the Hon'ble Bombay High Court has dealt the issue of bogus purchases and corresponding sales as under:- "We have considered the submission on behalf of the Revenue. However, from the order of the Tribunal dated April 30, 2010, we find that the Tribunal has deleted the additions on account of bogus purchases not only on the basis of stock statement, i.e., reconciliation statement but also in view of the other facts. The Tribunal records that the books of account of the respondentassessee have not been rejected. Similarly, the sales have not been doubted and it is an admitted position that substantial amount of sales have been made to the Government Department, i.e., Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of bank statement all of which would indicate that the purchases were in fact made. In our view, merely because the suppliers have not appeared before the Assessing Officer or the Commissioner of Income-tax (Appeals), one cannot conclude that the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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