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TMI Blog2018 (3) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to delete the same. - Decided in favour of assessee. - ITA No.4745/Mum/2017 And 4746/Mum/2017 - - - Dated:- 8-12-2017 - SHRI R. C. SHARMA, AM For The Assessee : Shri Tarun Ghia For The Revenue : Ms. N. Hemalatha ORDER PER R.C.SHARMA (A.M): These are the appeals filed by assessee against the order of CIT(A)-28, Mumbai dated 24/05/2017 for A.Y. 2010-11 and 2011-12 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act. 2. Common grievance of assessee in both the years pertains to estimation of 5% profit on the alleged unverifiable purchases. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that AO got information from the Sales Tax Department regarding sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as treated purchases from these parties as bogus. It was also contention of assessee that merely the fact that some of the suppliers have not paid VAT for the reasons best known to them or there is mismatch in VAT shown by purchaser and necessary action have been taken against them by the Sales Tax Department or display of information by VAT authorities does not mean that sales made by these parties are bogus. However, AO did not accept the assessee s contention. He accepted the purchases but estimated further profit of 5% and made addition thereof in the assessee s income amounting to ₹ 21,21,366/- in the A.Y.2010-11. Similar addition was also made in the A.Y.2011-12 by estimating profit at 5% of such alleged purchases. 8. By the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and evidence including third party statement by which the said suppliers have been treated as suspicious. As per learned AR, such information is required to be provided to the assessee for his examination and rebuttal before use thereof against the assessee. As per learned AR, such information was specifically sought by the assessee from the AO, however same was not supplied to assessee. He further emphasized that no cross examination was provided by the AO to rebut the allegation of these parties. Under these circumstances, it was contended that no addition on account of such supplies nor any estimation of profit on such purchases are required to be made. Reliance was placed on the following judicial pronouncements in support of the propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provision of Section 69C was not attracted to the facts of the case that investment were never in doubt. Further, reliance was placed on the decision of Hon ble Supreme Court in case of Andaman Timber Industries dated 02/09/2015, Nikunj Eximp Enterprises (P) Ltd., (Bombay High Court). 13. On the other hand, learned DR relied on the order of the lower authorities and contended that AO has very reasonably estimated the profit at 5% on the suspicion purchase, accordingly the same should be upheld. 14. I have considered rival contentions and carefully gone through the orders of the authorities below. I have also deliberated on the judicial pronouncements referred by lower authorities in their respective orders as well as cited by learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it was his duty to provide the copies of their statement to the assessee and to afford cross examination of the suppliers. There is no bar of utilising the material collected by other Government agencies and making addition on the basis of such material, but when the AO was identifying to make such addition how can he deprive the assessee to access to the material that was being used against assessee. There is no proverbial whisper in the assessment orders regarding request made by the assessee for supply of materials and cross-examination of the suppliers, the basic principle of natural justice mandate that assessee should be given due opportunity to defend itself i.e., they should be supplied the material that is proposed to be used aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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