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TMI Blog2019 (6) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases. AO, in our opinion, had clinched the issue in the right perspective and was fair enough to estimate the additions @12.5%. Therefore, concurring with the stand of AO, we restore the order of AO. Accordingly, the enhancement of ₹ 72.93 Lacs as made by Ld. first appellate authority stands deleted. - I .T.A. No.4650/Mum/2018 - - - Dated:- 16-5-2019 - SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM For The Assessee : Shri Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, the case was reopened u/s 147 by issuance of notice u/s 148 on 27/03/2014 which was followed by statutory notices u/s 143(2) 142(1) wherein the assessee was directed to substantiate the aforesaid purchases. 2.3 Although the assessee defended the purchases made by him, however, the same were not accepted by Ld. AO for various reasons as summarized in para 4.5 of the quantum assessment order. One of the reasons was that the assessee did not make available the details of transportation of the material purported to have been purchased from the aforesaid hawala dealers and could not provide any transportation receipts, delivery challans etc. In the affidavits filed before Sales Tax Authorities, the stated deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. Authorized Representative for Assessee [AR], Shri Rahul Hakani, vehemently contested the enhancement made by Ld. first appellate authority whereas Ld. DR supported the stand in impugned order by placing reliance on the decision of Hon ble Gujarat High Court rendered in N.K.Proteins Ltd. Vs. CIT [2016-TIOL-3165-HC-AHM-IT] . 5. We have carefully heard the rival submissions and perused relevant material on record and deliberated on judicial announcements cited before us. We find that assessee was in possession of primary purchase documents and the payments to the suppliers was through banking channels. The assessee had established corresponding sales before Ld. AO. The books of accounts were audited wherein quantitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the posi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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