9911796707
TMI Blog2018 (3) TMI 1685X X X X Extracts X X X X X X X X Extracts X X X X ..... hese purchase transactions to factorize for profit element earned by assessee against possible purchase of material in the grey market and undue benefit of Value Added Tax [VAT] against such bogus purchases. Since the assessee was engaged in trading activities, the goods must have been sourced by the assessee from somewhere else, the source of investment of which remained unexplained. - Decided partly in favour of assessee Addition on account of unexplained cash credit u/s 68 - Held that:- Upon perusal of impugned order, it is noted that the assessee was not able to satisfy the three ingredients viz. identity, creditworthiness & genuineness against the same. Needless to say that the complete onus to prove the same rest on the assessee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,73,033/- on account of purchases from suspicious parties identified by sales tax authorities. 2. On the facts and circumstances of case and in law, Ld. CIT(A) erred in confirming disallowance u/s 37 amount ₹ 2,07,54,611/- being 50% purchases by treating same as bogus purchase on assumptions basis. 3. On the facts and circumstances of case and in law, Ld. CIT(A) erred in confirming addition u/s 68 amount ₹ 2,50,000/- by treating same as unexplained Cash Credit. 4. On the facts and circumstances of case and in law, Ld. CIT(A) erred in confirming addition u/s 41 amount ₹ 21,10,711/- of account of cessation of liability. The assessment for impugned AY was framed by Ld. Assistant Commissioner of Income Tax-18(2) Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) 1,21,21,581/- 4 50% of balance purchases 2,07,54,611/- 5 Out of Expenses 5,95,058/- Total 4,31,47,254/- 3. Aggrieved, the assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 04/08/2017 where, after considering various remand reports, additions on account of bogus / other purchases have been confirmed whereas partial relief has been granted against addition made u/s 68 u/s 41(1) whereas expenses disallowance has been deleted altogether. Aggrieved the assessee is in further appeal before us. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit element earned by assessee against possible purchase of material in the grey market and undue benefit of Value Added Tax [VAT] against such bogus purchases. The Ld. AR has contended that addition of alleged bogus purchases could not be made u/s 69C since the payments were through banking channels with which we are not convinced since we have already observed that the purchases reflected by the assessee were in grave doubt and the assessee miserably failed to prove the same. This fact leads us to the logical conclusion that since the assessee was engaged in trading activities, the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d demonstrate fulfillment of requirements of Section 68. This ground stand allowed for statistical purposes. 7. Upon perusal of impugned order, we find that addition u/s 41(1) for ₹ 21,10,711/- as sustained by Ld. CIT(A) comprised of addition of ₹ 11,34,299/- on account of liability against suspicious suppliers. Since, we have already estimated addition against gross purchases, separate addition thereof u/s 41(1) do not survive and accordingly, deleted. The balance addition of ₹ 9,76,412/- pertain to an entity namely Find Technology Private Limited. The addition has been sustained by Ld. first appellate authority since notice u/s 133(6) elicited no responses. Upon perusal of ledger extract, it is noted that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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