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TMI Blog2018 (3) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... ; under the proprietary concern by name M/s Alpesh Metal Corporation. The return of income for the Assessment Year 2010-11 was filed on 25-09-2009, declaring total income of Rs. 4,09,000/-. There was survey in the business premises of assessee, thereafter case was reopened u/s 147, by issuing notice u/s 148 of the Act on 22-08-2013, based on the information received from the DGIT(Inv.), Mumbai, who in turn received the same from the Maharashtra Sales Tax Department Mumbai, that the assessee is one of the beneficiaries of the accommodation entries provided by some of the MVAT dealers, who were indulging in issuing bogus sale/purchase bills, investigated and kept on the public domain by the Sales Tax Department. Assessment u/s. 143(3) r.w.s. 147 of the Act, was completed by the Ld. AO on 31-03-2015 determining the total income at Rs. 61,96,837/-. During the course of reassessment proceedings, AO noticed that the assessee taken accommodation entries from seventeen parties to the tune of jMs-59,37,814/-. To ascertain the genuineness of purchases shown in the accounts, 133(6) of the Act were issued to all of them by the AO, which were returned unserved. AO asked to prove the genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transport contractor showing that the material purchased from the consignors was actually delivered to the appellant and freight has been paid thereon. The Appellant is also not able to provide copies of the CRN evidencing the receipt/delivery of the goods along with the relevant purchase orders in respect of impugned purchases. The appellant is also not able to produce goods consignment note, transport bills and the delivery challans issued by the parties or octroi receipts issued to substantiate delivery of goods to the appellant. Thus, the appellant has not brought on record any independent and reliable evidence to prove complete trail -so far as movement of consignment from the said parties to the place of the appellant is concerned. The appellant is not able to prove the movement of consignment from the consignors and delivery of goods to the appellant in case of alleged purchases from the above parties. In such circumstances merely because the payment towards the impugned purchases were made by account payee cheques, it does not establish that the transactions and the purchases are genuine and the appellant received delivery of the goods. 6.4 In the appellant's case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity of .opening stock, purchases and sales were tallying and hence, only the profit margin embedded in such amount would be subjected to tax. The Hon'ble Gujarat High Court taking cognizance of the fact held that whether purchases themselves were bogus or whether parties from whom such purchases were made were bogus, is essentially a question of fact and the Tribunal having examined the evidence on record and concluded that the assessee did produce cloth and sell finished goods, the entire amount covered under such purchase would not be subjected to tax and only the profit element embedded therein was to be taxed. While coming to the above conclusion, the Hon'ble High Court also relied on the decision in the case of Sanjay Oil Cake Ind. 316 ITR 274 (Guj). 6.7 In Sanjay Oilcake Industries v. Commissioner of Income-tax [2009] 316 ITR 274 (Guj), it was held as under: "12, Thus, it is apparent that both the Commissioner (Appeals) and the Tribunal have concurrently accepted the finding of the Assessing Officer that the apparent sellers who had issued sale bills were not traceable. That goods were received from the parties other than the persons who had issued bills for su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, sustained the addition to the extent of 12.5%. Taking into account the above facts, the Hon'ble Gujarat High Court held that since the purchases were not bogus, but were made from parties other than those mentioned in books of accounts, only the profit element embedded in such purchases could be added to the assessee's income and as such no question of law arose in such estimation. While arriving at the above conclusion, the Hon'ble Court also relied on the decision in the case of Vijay M. Mistry Construction Ltd. 355 ITR 498 (Guj) and further approved the decision of Ahmedabad Bench, ITAT in the case of Vijay Proteins 58 ITD 428. 6.9 AO relying on the decisions of Hon'ble Gujarat High Court in the case of Bholenath Polyfab Pvt Ltd Vs GT 355 ITR 290 and CIT vs. Simit Sheth 356 ITR 451 (Guj) discussed in the above paras, estimated the addition @12.5% of the total bogus purchase. The facts and the line of business of the appellant in the present case are exactly similar to the case of Simith P. Sheth (supra). This is in addition to the profit already declared by the appellant in the normal course of business for the benefit he got from the grey market operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urvey, the AO has found that assessee has taken bogus bills from the non-genuine suppliers. After issuing notice u/s.133(6) to all the suppliers, he came to the conclusion that these suppliers did not exist and also did not appear before the AO, accordingly, he concluded that purchases were not genuine and he added 12.5% of such purchases which were confirmed by the CIT(A) after giving due reasoning. The contention of learned AR is that matter should be restored back to the file of the AO is not acceptable in view of the fact that neither assessee has alleged before the AO for giving copy of the documents impounded nor in the statement of facts filed before the CIT(A). There is no allegation by the assessee before AO that copy of impounded documents were not supplied to the assessee so as to enable it to furnish the required details. Even before the CIT(A), there is no such request made by the assessee, therefore, contention of ld. AR to restore the matter back to the file of the AO is not acceptable at all. So far as giving of credit of the GP rate already declared by the assessee is concerned, the AR placed on record the order of the Co-ordinate Bench in case of Ratnagiri Stainle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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