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TMI Blog2017 (12) TMI 1667X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee to prove the claim by adducing the sufficient evidence on record. The assessee produced the self made vouchers and also produced the bill and vouchers in support of his claim. The AO restricted the addition to the extent of 10% on the basis of personal element. At the time of the argument the Ld. Representative of the assessee nowhere produced any other cogent evidence in support of his claim. On account of non producing the sufficient evidence in support of the claim, we are of the view that the CIT(A) has rightly restricted the claim to the extent of 10% of the expenses - Decided against assessee. Reopening of assessment - HELD THAT:- AO was not having any information at that time because the Assessing Officer received the information from DGIT(Inv.), Mumbai vide letter dated 26.02.2013. When the Assessing Officer was not having any information as on 15.02.2013, therefore, it is strange in which circumstances, the Assessing Officer issued the present notice on the information received through letter dated 26.02.2013 as on date 15.02.2013. The personal knowledge of the Assessing Officer could not be the ground to invoke the proceeding u/s 147/148 of the I.T. Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted by the appellant as well as the corresponding sales to the alleged purchases were not disputed and were duly accepted by both the Assessing Officer and the Ld. CIT(A). 3.4 Without prejudice to the above, the amount of disallowance ought to be restricted to 2.05% being the gross profit margin earned by the appellant during the assessment year. 4 Disallowance of 10% of business expenses treating them as personal in nature. 4.1 The Ld. CIT(A) grossly erred in upholding the disallowance made on estimation basis by the AO in respect of business expenses at 10% of the total expenditure treating them to be p personal in nature without any specific evidence. 5. The appellant craves leave to add to, alter, amend or withdraw all or any of the foregoing grounds of appeal at or before the hearing of this appeal. 4. The revenue has raised the following grounds.:- 1. On the facts and circumstances of the case the Ld. CIT(A) erred in deleting the addition of ₹ 3,63,04,869/- on account of bogus purchases. 2. On the facts and circumstances of the case, the Ld. CIT(A) erred in not considering the fact that the assessee was unable to prove the genuineness of the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading Company 27960673085V 7,03,162 6 Vitarag Trading Company 27830385697V 23,74,939 7 Bhumi Enterprise 27860587392V 9,77,485 8 Prayan Trading Company 27740535951V 25,91,461 9 Surachi Multitrade P. Ltd. 27200610259V 15,03,623 10 Hariom Traders 27840642014V 11,47,141 11 Sampark Steels 27170360840V 23,23,571 12 N B Enterprises 27490339033V 24,81579 13 Bhagwati Trading Company 27020614820V 21,66,542 14 Revika Trade Impex P. Ltd. 27730562486V 34,06,054 15 Sivamani Traders P. Ltd. 27290589500V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was at ₹ 27,86,014/- i.e., 1.99% and ₹ 5,92,771/- i.e., 0.42% on total turnover of ₹ 13,95,75,233/- respectively. During the course of assessment proceeding the matter of controversy in connection with the reopening of the case has been decided and the assessee also contested the case on merits by providing the documents available with him but the Assessing Officer was not satisfied, therefore, the bogus purchase to the tune of ₹ 4,14,91,279/- was added to the income of the assessee. The assessee filed an appeal before the CIT(A) who restricted the claim of the assessee to the extent of 12.5% of the bogus purchase. The assessee was not satisfied, therefore, filed the present appeal before us. However, the revenue has also filed an appeal in which the contention of the revenue is that whole addition of bogus purchase is liable to be added to the income of the assessee. ISSUE NO.1:- 7. Issue no. 1 is generally in nature which nowhere required any adjudication. ISSUE NO.2:- 8. At the time of argument the assessee did not press this issue, therefore, this issue is being decided in favour of the revenue against the assessee. ISSUE NO.3:- 9. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Thereafter, the Assessing Officer raised the whole addition of purchases as income of the assessee. On appeal, CIT(A) has confirmed the said addition. On appraisal of both the orders we noticed that the Assessing Officer as well as CIT(A) nowhere took into consideration the evidence adduced by the assessee. It is to be seen what was the evidence given by assessee during the proceeding in connection with above mentioned 20 parties. The evidence which has been given by the assessee is being discussed below party-wise. 1. Dhruv Sales Corporation:- The assessee given the ledger A/c. which lies at page no. 157 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 158 of the paper book. The assessee has also submitted the MVAT Challan which lies at page no. 159 of the paper book. The assessee has also furnished the invoices of purchase and sales along with delivery challans which lies at page no. 160-165 of the paper book. 2. Sachi Merchantile P. Ltd.:- The assessee given the ledger A/c. which lies at page no. 340 of the paper book. The assessee has also submitted the confirmation of account by the supplier which li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the ledger A/c. which lies at page no. 360 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 361 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 362-377 of the paper book. 9. Surachi Multitrade P. Ltd. :- The assessee has given the ledger A/c. which lies at page no. 449 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 450 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 451 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 452-462 of the paper book. 10. Hari Om Traders. :-The assessee has given the ledger A/c. which lies at page no. 268 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 269 of the paper book. The assessee has also submitted the acknowledgements of VAT return which lies at page no. 270 of the paper book. The assessee has also submitted the Purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 207 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 208-209 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 210-225 of the paper book. 17. Anshu Merchantile P. Ltd.:- The assessee has given the ledger A/c. which lies at page no. 413 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 414 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 415 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 416-427 of the paper book. 18. Omkar Trading Co.:- The assessee has given the ledger A/c. which lies at page no. 395 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 396 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 397 of the paper book. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not available at the given address. However, notices served upon the Sampart Steel, Revika Trade Impex P. Ltd., Jindal Corporation but these parties nowhere submitted the required information. Sufficient evidence has been submitted by the assessee before the AO. Non service of notice nowhere falsify the claim of the assessee. The assessee has adduced the sufficient evidence in support of the claim against 20 parties. No doubt if the bogus purchase established then in the said circumstances the profit embedded to the bogus purchase is liable to be considered to the income of the assessee in view of the law settled in Vijay Protein Vs. CIT 58 ITT 458 (Ahd) and CIT Vs. Simit P Sheth 356 ITR 451 (Gujrat High Court). In the present case sale has not been disputed and the books of account have not been rejected In the instant case, when the assessee has adduced the sufficient evidence on record which has been discussed about therefore, in the said circumstances, we are of the view that the no addition is required to be made on account of bogus purchase. Non service of noticed is not a ground to raise the addition of bogus purchase to the income of the assessee in view of the law set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the plea of the Appellant that the notice for initiating reassessment proceedings was issued by Assessing Officer on 15th February, 2013 where as the AO received information from the CIT-21 regarding the alleged purchases vide letter dated 26.02,2013 which goes to show that the AO did not have reasons to believe that income has escaped assessment and initiated proceedings merely on reason to suspect. 2.3. The Ld. CIT(A) erred in upholding the reassessment order without appreciating that the AO had passed a vague order for rejecting the objection raised by the Appellant and the said order was not even a speaking order as per the principles laid down by the Supreme Court in the case of GKN Driveshafts (India) Limited. Disallowance of 6^ amounting to ₹ 15,60,270/- in respect of certain purchases alleged to be bogus in nature. 3.1 The Ld. CIT(A) grossly erred in making a disallowance of 6^ in respect of purchases amounting to ₹ 15,60,270/- alleged to be bogus in nature based on the information received from the Sales Tax Department, without considering the strong evidence and details submissions given by the appellant. 3.2 The Ld. CIT(A) partly upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases have been made out of undisclosed income and the same remained unexplained which required to be added u/s 69C of the I.T. Act. 5. On the facts and circumstances of the case, the Ld. CIT(A) erred in sustaining the addition to the extent of ₹ 15,60,270/- by taking the GP @ 6% of the bogus purchases of ₹ 2,60,04,503/- not considering the facts that the entire purchases are bogus. 6. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored. 7. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 15. The facts of the present case are the same as mentioned above in the appeal no 277/M/2017, therefore, there is no need to repeat the same. However, the figure is different. In the instant case, the assessee has raised the objection of validity of issuance of notice u/s 148 of the I.T. Act as well as also raised the question of merits. ISSUE NO.1:- 16. Issue no. 1 is generally in nature which nowhere required any adjudication. ISSUE NO.2:- 17. Under this issue the assessee has challenged the validity of the notice issued u/s 148 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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