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TMI Blog2017 (8) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessee for previous or subsequent years. Considering the facts and the circumstances of the case, we are of the opinion that a reasonable disallowance of impugned purchases/ unexplained expenditure @ 12.5% would meet the end of justice. Hence, the AO is directed to restrict the disallowance on account of unexplained expenditure u/s 69C of the Act @ 12.5% of aggregate purchases (Rs. 43,84,048/-) of impugned purchases. With the directions the appeal of the assessee is partly allowed. - ITA No. 2121 to 2125/Mum/2016 - - - Dated:- 8-8-2017 - SHRI P.K. BANSAL, VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER Assessee by : Shri Y.P. Trivedi Sr Advocate with Ms. Usha Dalal, Advocate Revenue by : Shri V. Justin (Sr. DR) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciate the intricacies of the Appellant's business and hence, erred in upholding the order of the Assessing Officer, which was based on presumptions, conjectures and surmises. 5. The Learned CIT (A) failed to appreciate that the Appellant had retrieve income offered during the search on account of discrepancies in record of purchase of ₹ 7,03,09,621/- and hence a disallowance was unwarranted and illegal and/or excessive. 2. Though, the assessee has raised as many as six grounds of appeal, however, as per our considered view the sole and substantial ground of appeal is If the ld. CIT(A) erred in upholding the disallowance of ₹ 43,84,084/- on account of unexplained expenditure. 3. The brief facts of the case are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard the ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assessee argued that the major addition to the income during the re-assessment proceeding is on account of alleged unexplained expenditure u/s 69C of the Act. The AO disallowed the genuine and explained expenditure of ₹ 43,84,084/-. The material was purchased from the dealers after availing proper bills. The payments were made through cheques and all details regarding the consumption of material were shown. The assesseecompany is engaged in the business of infrastructure project at various sites, all the material purchased from all the so-called haw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee made purchases were listed in the list of hawala traders in the website of Sales Tax department, State of Maharashtra. The assessee was given sufficient opportunity to prove the genuineness of purchases. The assessee failed to prove the genuineness of the transaction from six parties. The names of all the parties have been mentioned by AO in para-4 of his order. As the assessee failed to prove the genuineness of the purchases, the AO was justified in disallowing the aggregate of purchases from these six parties. 5. We have considered the rival submission of representative of the parties and have gone through the orders of authorities below. The AO during the re-assessment proceedings asked the assessee to furnish the list of per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that all the purchases were made through cheques. It was further contended on behalf of assessee that the admission/disclosure of additional income made during the survey has already been retracted. The contention of assessee was not accepted by AO. The AO made the disallowance of aggregate of purchases from six parties for ₹ 43,84,084/-. During the first appellate stage, the ld. CIT(A) also observed that the assessee has not produced the parties for verification despite the opportunity given to the assessee. The notice u/s 133(6) of the Act sent to all the parties were returned back. The assessee has not given any confirmation from the said parties either before the AO or during first appellate stage. The AO has no occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure incurred on such purchases is treated as unexplained. We have noted that the AO have disallowed the entire purchases from six parties. The books of accounts of assessee were not rejected by AO. The AO has not made any independent enquiry for bringing co-gent evidence on record. The assessing officer has not made any inquiry about the purchases from Kapasi Family and M/s. Shivani Hot Rolled Steels Pvt. Ltd, in respect of which the additional income of allegedly offered during the survey. The AO has not examined the ratio of impugned purchases qua the entire purchases made by assessee during the year under consideration. The AO relied upon the report of Sales Tax Department. The report of Sales Tax Department was not shared wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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