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TMI Blog2019 (12) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... of 5% of the purchases for the A.Y.2009-10 A.Y. 2010-11. Grounds raised by the Revenue are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee might have made purchases in the gray market. It is the finding of the Assessing Officer since the purchases made by the assessee and claimed as expenses in his Profit and Loss Account are not genuine, the purchases to that extent remained unverifiable. He also observed that the dealers from whom the assessee made purchases stated that they have issued only accommodation bills. Therefore, Assessing Officer treated purchases of ₹.9,39,991/- & ₹.4,12,664/- as non-genuine and added to the income of the assessee for the A.Ys. 2009-10 & 2010-11 respectively. On appeal the Ld.CIT(A) considering the evidences and various submissions of the assessee restricted the disallowance to the extent 5% of the non-genuine purchases f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so. In the absence of these details the department could not examine the correctness, reasonableness and genuineness of these purchases. The perusal of the decisions of various courts reveals that there are varying / different findings and the same differ differ from case to case, based on the facts of each case. Therefore, the ratio of those cases cannot be said to be squarely applicable in the appellant's case. 6.6. Since the hawala parties have run away from their original addresses and the apellant is not in a position to furnish the current verifiable addresses, therefore, the department is also not in a position to enquire the genuineness of these purchases, mainly due to failure on the part of the appellant. As regards the cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en paid is properly deductible. In this case absolutely no material on record has been brought by the assessee to suggest that the commission agents had procured any orders for the assessee. The production of bills or payments having been made by account-payee cheques cannot by itself show that the commission agents had procured any order for the assessee. No correspondence ..,........" 6.8. In the above case, the Hon'ble Supreme Court has made it very clear that by creating documents and making payment through banking channel to give colour, does not sacrosanct/ establishes the genuineness of the transaction. In number of other cases, as discussed above, it is noticed that the disallowance ranging from 25% to 100% of bogus purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the first appellate authority to ensure that the effective enquiry is carried out, to arrive at logical conclusion, therefore, to understand the impact of booking of hawala purchases on the profit of the year, the Ld AR was required to furnish the comparative details of GP/NP and GP/NP rates for hawala years, preceding two years and subsequent two years. In compliance, the appellant has submitted the details, as under :- Asst. Yr. 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Turnover 1,69,41,983 1,69,75,821 1,59,41,290 1,35,29,826 2,00,28,932 3,08,44,256 2,38,62,589 GP 9,31,881 11,60,670 16,24,450 14,56,614 13,10,970 15,69,359 15,28,709 GP Rate 5.50% 6.84% 10.19% 10.77% 6.55% 5.09% 6.41% GP Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st ₹ 4,45,483/-, and ₹ 4,26,485/- declared by the appellant. The appellant will accordingly get relief of ₹ 5,88,409/- [9,39,991 - 3,51,582 (7,97,065 - 4,45,483)] and ₹ 1,62,658/- [4,12,664 - 2,50,006/-(6,76,491 - 4,26,485)]. Since the income of the appellant has been estimated @5% of the turnover, therefore, no further disallowance is required to be made." 5. On a careful perusal of the order of the Ld.CIT(A) and the reasons given therein, we do not find any infirmity in the order passed by the Ld.CIT(A). None of the findings and observations of the Ld.CIT(A) have been rebutted with evidences by the revenue and thus we do not see any infirmity in the order passed by the Ld.CIT(A) in sustaining the addition/disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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