9911796707
TMI Blog2018 (1) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Leader Valves P. Ltd. [2006 (2) TMI 126 - PUNJAB AND HARYANA High Court] wherein held that if the purchase were treated as bogus it would be impossible to manufacture the goods shown to have been manufactured by it. This is applicable in the case of the assessee also as the disallowance will lead to net profit of 25 per cent. and also the fact that the work executed by the assessee has been certified by the Government agencies. The quantitative details of Bitument has been clearly mentioned along with correspondent utilization of mitti, sand and crusher stone. In the case of ITO v. Liyakat Ali Mohd. Sadik [2003 (9) TMI 326 - ITAT JODHPUR] wherein it was held that when purchases are made from unregistered dealers and are supported by bills and vouchers no addition can be warranted in the absence of rejection of books of account. Thus the action of the learned Commissioner of Income-tax (Appeals) deleting the addition is hereby confirmed. - Decided in favour of assessee. - I. T. A. No. 60 /Chd/ 2017 And Cross Objection No. 10 /Chd/ 2017 - - - Dated:- 2-11-2017 - Smt. Diva Singh (Judicial Member) And Dr. B. R. R. Kumar (Accountant Member) For the Assessee : Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee the Assessing Officer has disallowed the amount of ₹ 1,97,55,357 out of the total amount debited of ₹ 5,27,81,496 claimed by the assessee on account of purchase of construction material like bitumen, sand, and bricks. 5. Aggrieved the assessee filed appeal before the learned Commissioner of Income-tax (Appeals). 6. The learned Commissioner of Income-tax (Appeals) vide order dated October 7, 2016 has restricted the addition of ₹ 1,97,55,357 to ₹ 15,00,000. While deleting the addition the learned Commissioner of Income-tax (Appeals) has held as under : Apparently, this is the case wherein the Assessing Officer has not followed some basic facts of the case. Apparently, the appellant is engaged in the business of civil construction. The Assessing Officer made additions on account of unverifiable purchases to the tune of ₹ 1,97,55,357 for purchasing construction materials namely bitumen/ stone/crasher/sand/bricks/cement/mitti etc. The major part of the purchases were made in cash and such parties could not be produced before the Assessing Officer as these parties were petty suppliers who do not have a fixed place of business, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted the quantitative tally in respect of various items as purchase by them and which proves that the actual material has been consumed by the appellant for the purpose of execution of time bound contract. The appellant has further strongly contended that the Assessing Officer has not rejected the books of account either under section 145(3) or otherwise whereas it is a settled law that no addition can be made if the books of account under section 145(3) are not rejected. Neither the Assessing Officer has pointed out any defects in the books of account which can be a good ground for making the addition. The appellant has relied upon the decision of hon'ble jurisdictional bench of Income-tax Appellate Tribunal, Chandigarh wherein the issue was related to bogus purchases and it was held that since the assessee maintains proper quantitative details of the purchase/sales made and there was no outstanding balance of the parties in whose case addition on account of bogus purchase was made and therefore, the addition made by the Assessing Officer was deleted by the Income-tax Appellate Tribunal. 3.9. Apart from the above submission, the appellant has really strongly contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of the supplier Amount of purchases 1 Abinash Traders, Ludhiana ₹ 10,07,100 2. Guru Teg Bahadur Co., Ludhiana ₹ 10,45,800 3. Shivam Enterprises, Ludhiana ₹ 12,75,300 4. Vishal Stone Enterprises ₹ 11,45,350 5. Shiv Shankar Stone ₹ 14,97,100 6. Sukhdev Crasher and Stone, Ludhiana ₹ 10,12,965 7. Surjit Traders, Ludhiana ₹ 10,49,600 8. Sidhu Brickworks, Ludhiana ₹ 5,76,075 9. Punjab Cement, Ludhiana ₹ 2,00,440 b. The appellant did not produce following suppliers : Sl. No. Name of the supplier Amount of purchases 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings of assessing income at the rate of 12 per cent. has failed to take steps which would statutorily casted upon him to arrive at the conclusion to make him adding the huge addition of ₹ 1,97,55,537 on account of discrepancies in verification of the purchasers. In my view, the Assessing Officer has failed to apply the logic behind the rejection of an entire purchase of ₹ 1,97,55,537 whereas it has not given any logic as to from which was the appellant has purchased or utilised the material under consideration for which the disallowance of ₹ 1,97,55,537 have been made. The Assessing Officer has also not supplied the logic of pointed out towards any other defects in the books of account of the appellant which has compelled him to make such huge addition. The Assessing Officer has not even cared to reject the books of account under section 145(3) of the Act before applying his logic of making such huge addition. The fact that of accounts of the appellant has been audited by the chartered accountant and the Assessing Officer has not pointed out any major defects and rejected the books of account in order to arrive the true affairs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the unregistered dealers out of which 1.97 crores has been disallowed which comes to 66.3 per cent. of the remaining purchases. The learned authorised representative further relied on the submissions made before the Commissioner of Income-tax (Appeals). 9. We have heard learned representatives of both the parties and perused the material placed before us and also the order of the learned Commissioner of Income-tax (Appeals). 10. The assessee has been continuously declaring the net profit in the range of 1.71 per cent. to 4.65 per cent. and the disallowance made by the Assessing Officer if accepted would increase the net profit to the tune of 25.15 per cent. which is very abnormal. The contention of the authorised representative that the suppliers of these goods have no permanent place for carrying on the business can be accepted. There were no defects in the books of account of the assessee has been pointed out by the Assessing Officer. It cannot also be said that after purchasing bitumen to the tune of ₹ 2.30 crores in the work can be executed by using the building material to the tune of ₹ 1.07 crores only as equivalent building material is also required to uti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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