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TMI Blog2020 (1) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. CIT(A) in sustaining the addition to the tune of 8% of alleged disputed purchase by applying the G.P ratio of 8%. 3. The brief facts as noted by the AO for the A.Y 2011-12 is that the assessee had declared in e- return of income total income of Rs. 3,438/-. Subsequently, the case was selected for scrutiny after re-opening u/s. 147 of the Income-tax Act, 1961 ( in short, the 'Act') on the basis of specific information received from Pr. DIT (Inv.), Kolkata that the assessee had shown to have made bogus purchase from eight (8) different concerns of Shri Sanjiv Kr. Singh, who when searched by the department gave statement that he and his concerns are providing accommodation entries in lieu of commission. The AO noted that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the purchases are genuine. However, according to Ld. AR, the AO has not given any credence to the documents/evidences placed before him by the assessee to substantiate the genuineness of purchase made by the assessee. In order to substantiate the genuineness of the transaction, the ld. AR took me through the copies of various purchase bills, available from pages 4-34 of the paper book. From the bill placed at page-4 of the P/B, I note that the assessee had purchased M.S. Round 316 Kgs @ 31/- i.e. Rs. 98,084/- from M/s. Jay Shree Sales Corporation and paid VAT @ 4% i.e Rs. 3,923.36 and has paid delivery charges amounting to Rs. 1,00,879/- respectively. In the Bill, I note Tax Invoice No. 7/10-11 dt. 12.4.10, Challan No. 7/10-11 dt. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1crore. However, on going through the judgments of the CIT, ITAT and the High Court, we find that on merits a disallowance of Rs. 19,39,60,866/- was based solely on third party information, which was not subjected to any further scrutiny. Thus, the CIT (Appeals) allowed the appeal of the assessee stating: "Thus, the entire disallowance in this case is based on third party information gathered by the Investigation Wing of the Department, which have not been independently subjected to further verification by the AO who has not provided the copy of such statements to the appellant, thus denying opportunity of cross examination to the appellant, who has prima facie discharged the initial burden of substantiating the purchases through var ..... X X X X Extracts X X X X X X X X Extracts X X X X
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