9911796707
TMI Blog2018 (4) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... 3%. Accordingly we set aside the order passed by CIT(A) and direct the AO to sustain the addition to 3% of the value of alleged bogus purchases and in our view, the same would meet the ends of justice. We order accordingly. X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee could not prove the purchases made from M/s Zalak Impex. Accordingly he held that it has to be inferred that purchases were made by the assessee from undisclosed parties out of unexplained sources of income. Since the sources of cash paid to undisclosed parties remains unexplained, the same is required to be added u/s 69C of the Act. The AO, by placing reliance on host of case laws, also held that the payment by way of cheques would not prove the genuineness of purchases. 5. Accordingly, the AO held that the purchases of ₹ 201.28 lakhs made from and sales of ₹ 10.17 lakhs made to M/s Zalak Impex are non-genuine. Accordingly he added the aggregate amount of ₹ 211.45 lakhs to the total income of the assessee. The ld CIT(A) also confirmed the same and hence the assessee has filed this appeal. 6. The Ld A.R contended that the assessee has reconciled the purchases and sales, meaning thereby, the assessee could not have sold/utilised the diamonds without purchasing the same. Accordingly he submitted that the disallowance of entire amount of purchases is not justified. With regard to the statement given by Shri Hiren Raval, the Ld A.R submitted that it was a sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein the case of purchases made from M/s Zalak Impex was considered. The Ld A.R submitted that the co-ordinate bench has deleted the entire addition. He also relied upon the decision dated 30-01- 2018 rendered by the co-ordinate bench in the case of M/s Amity Interlinks Steels P Ltd (ITA No.3243/Mum/2012 & others), wherein addition to the extent of 2.5% was confirmed, after observing that the AO has failed to carry out any further investigation to disprove the evidences furnished by the assessee. 9. The Ld A.R further submitted that the alleged bogus purchases, in the instance case, constitute approximately 7% of the total purchases. He further submitted that the AO has added the sales value also and the same is not justified, since the assessee has already offered the sales to taxation. The Ld A.R further submitted that the assessee has been incurring gross loss in AY 2004-05 and 2005-06, but declared Gross profit rate of 10.43% and net profit rate of 2.92% during the year under consideration. He submitted that these figures show that the assessee has been making sincere efforts to make profits and in this context also, the allegation of bogus purchases is not justified. He submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith sales/manufacture. It is the contention of the assessee that it could not have sold/utilised diamonds without purchasing the same. There is merit in the said contentions of the assessee. We notice that the AO has placed reliance on various case laws to support the disallowance made by him. However, the issue under consideration being a factual issue, the same is required to be decided on the basis of facts surrounding the issue. As noticed earlier, the AO has placed his entire reliance on the statement given by Shri Hiren Raval, while the contention of the assessee is that the statement so given by Shri Hiren Raval is a self serving statement. We notice that the assessee has sought for an opportunity to cross examine Shri Hiren Raval, but the same has been denied by the AO. We notice that the assessee has furnished copies of invoices and payment details to prove the genuineness of purchases. We notice that the AO did not examine those details. 13. From the quantity details furnished in the Annual report, we notice that the assessee does not hold any stock of diamonds as at the year end, meaning thereby all the opening stock and purchases have been consumed or sold during the y ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
