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TMI Blog2017 (1) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... order by the parties, thus clubbed, heard together and are decided by common order, to avoid the conflicting decisions. 2. Brief facts of the case are that assessee filed return of income declaring total income at Rs. 8 9,71,270/-. The assessment was completed under section 143( 3) on 26, March 2013. While framing assessment the AO, besides other addition and disallowance made the addition of Rs. 52, 12,502/- on account of bogus purchases and addition of Rs. 2,82,837/- on account of on account of lower rate of interest. On appeal before Commissioner (Appeals) by assessee and the addition on account of bogus purchases was restricted to 23% of the total cost of bogus purchases of Rs. 52,12,502/- and the addition on account of lower rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent by the assessee himself to non related third parties. The AO calculated the difference between average rate of interest at which loan was given to sister concern and the average rate of interest at which interest is paid to nonrelated parties and disallowed proportionate interest expenses attributable to the difference between lending to the related parties and nonrelated parties at Rs. 2,82,837 /-. The learned CIT(A) while considering this ground of appeal observed that the assessee has sufficient capital balance available with them, which it can lend to the cistern concerned in the time of need. The capital of the firm/ assessee as on 31 March 2009 is at Rs. 39,53,704/- and Rs. 92,56,447/- as on 31 March 2010, which clearly indicate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner (Appeals) sustained the addition @ 23% on the basis of GP rate despite the fact that assessee has failed to prove the genuineness of transaction. The Ld DR for the revenue argued that the order of Commissioner (Appeals) may be set aside and that order of AO may be restored. On the other hand ld AR of the assessee argued that that during the assessment proceeding the AO did not furnished the assessee the information received from the Sale Tax Department. No statement of the persons which were allegedly recorded by the Sales Tax Department was supplied to the assessee. The AO has not made any independent inquiry and relied on the information of the third-party while making addition against the assessee. The assessees prove the genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bogus billers. Such information was received from Sale Tax Department Government of Maharashtra clearing the bogus billers have accepted that they have only issued bills to the assessee without actually delivering the goods. The AO noted that purchases have been shown without receipt of any actual delivery of goods. The AO identified the following five parties. Sl. No Name of the parties Amount (Rs.) 1 Motion Traders Private Limited 24,99,764/- 2 Eveready Marketing Private Limited 1,26,319/- 3 Seva Enterprises 7,44,806/- 4 Abhilasha Sales Private Limited 7,71,623/- 5 Laxman Sales Private Limited 10,69,990/- Total 5 2,12,502/- 6. The AO asked the assessee to produce the evidence in respect of the river ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived from an external source and simply proceeded to treat the information as gospel truth to make the addition of bogus purchases in the hands of assessee. It was further concluded that the AO nowhere doubted the corresponding sales made by assessee against the alleged bogus purchases during the year under consideration. The ld CIT(A) further concluded that consumption of goods purchased is reconciled with the sales recorded in the stock inventory of the goods purchased /sold and the purchases of material cannot be held as bogus or not genuine. From the details submitted by the assessee it can be observed that the assessee had made the purchases of various types of art paper from the parties in question and after making since against suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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