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TMI Blog2017 (2) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... s discharged the burden cast upon her. We find that in all the cases, relied upon by the assessee, the Tribunal has held that where the AO accepts the sale made by the assessee, he cannot reject the entire purchases. It is true that the FAA has rejected the books, but, he has not given any reason for the rejection of the same. We would also like to mention that the FAA had without assigning any reason had disturbed the profit rates shown by the assessee. He should have called for an explanation of the assessee about fall in the GP for the year under consideration. There can be several reasons for variation in profit rates, so, only on that basis results of audited book should not be disturbed. - Decided in favour of the assessee. - I.T.A./ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee had made purchases from Mahavir Enterprises (ME) and MR Corporation (MRC), that both the parties were appearing in the list of suspicious dealers published by Sales Tax Department (STD), that as per the information of STD ME and MRC were issuing bogus bills without delivery of goods. As per the AO he was in possession of the affidavits/statements/depositions, given by the suppliers, before the sales tax authorities, wherein it was stated that they were issuing only bogus bills and had not purchased or sold any goods. As per the AO, it was also admitted that they did not have any godowns/ business places and that payments received by them from the clients through checks were handed over back to the purchasers in cash after ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submission of the assessee, the FAA held that the AO had received information from the sales tax authorities about certain suppliers who were issuing bogus bills without supplying goods, that the name of both the suppliers were appearing in the list of hawala dealers published by the STD, that the AO had confronted the assessee with the facts gathered from the sales tax authorities, that the assessee did not file any satisfactory explanation, that in response to the notices issued u/s.133(6) no replies was received, that the assessee had not discussed the primary onus of establishing the genuineness of the purchases shown from the above-mentioned two suppliers. Invoking the provisions of section 145(3) of the Act, he held that the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng issuing bogus bills, that he had issued notice u/s. 133 (6) of the Act, that he did not receive any reply from the suppliers, that he made an addition of ₹ 6.35 lakhs on account of bogus purchases (Rs. 3.11 lakhs in the case of ME+ ₹ 3.2 lakhs the case of MRC) to the total income of the assessee, that the FAA invoked the provisions of section 145(3)of the Act. From the chrono - logy of the events it is clear that the AO was in possession of the information supplied by the sales tax authorities. He has not mentioned as to whether the name of the assessee was appearing in the statements/affidavits of the hawala dealers or that the statement were general in nature. It was his duty to supply a copy of the statement of the alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: 2.4 . We have heard the rival submissions and perused the material before us. We find that AO had made the addition as one of the supplier was declared a hawala dealer by the VAT Department. We agree that it was a good starting point for making further investigation and take it to logical end. But, he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factor to be considered for resolving the issue. The FAA has given a finding of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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