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TMI Blog2011 (11) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... itions and disallowances. As against this the appellant had preferred an appeal before the learned CIT (A)- IX. The learned CIT (A) allowed all the grounds but restricted the disallowance on account of sundry creditors for purchases to 10% of Purchases. 3. The Learned CIT (A) failed to appreciate the fact that the appellant had duly provided all the details for purchase and sales, even the complete quantitative details of the purchases, sales, opening and closing stock were also furnished. 4. The Learned CIT (A) failed to justify adhoc disallowance of 10% of total purchases, when the genuineness of the transaction were not disputed. 5. The Learned CIT (A) failed to appreciate the fact that these records were duly verified by other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the books of the assessee bogus. The assessee has stated that all the sundry creditors are related to purchases made during March 2008. As per the details provided by the assessee, total purchases made during the month of march is ₹ 1,05,73,194. At the same time total quantum of sundry creditors (related to four purchasing center at Delhi, Ahemadnagar, Miraj, Sholapur) is ₹ 4,19,65,277/-. I have accepted the theory of the assessee that all the sundry creditors are related to purchases made during March 2008. Even though we will consider the assessees contention, still outstanding sundry creditors balance is there. Therefore the difference of ₹ 3,13,92,083/- (total sundry creditors ₹ 4,19,65,277 - total purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases cannot be verifiable. v. Since the address is not available we could not verify number of pieces purchased and rate per piece. 8.9 During the course of appellate hearing, the AR of the appellant represents that it Is true that all the purchases are made through the above 4 centers in cash only through the local shandies who are doing trade in that shandies regularly but not having permanent establishment. The AO has called for certain details and the appellant has provided them to a great extent, but since the very nature of this trade which is unorganized, furnishing complete and precise details is not possible. I have also noted that the AO has not objected to the quantitative details furnished by the appellant. It is a we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuine, but made addition on ad-hoc basis at 10% of the total purchase of four centres without bringing any material on record, such as, the gross profit shown in the present year was lower than that shown by the assessee in the immediately preceding year or that the cost of goods sold to the total turnover of the assessee as compared to the cost of goods sold to the total turnover of the assessee in the current year was higher than that in the immediately preceding assessment year. The ld. AR also submitted that it will be seen from the assessment order that the valuation of the closing stock with the quantitative details appearing in the books of account was found correct. The number of skins and hides purchased from the market had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before us. We find that the disallowance of ₹ 65,17,186/- was made by the ld. CIT(A) only on the basis of suspicion that there might be inflation in the purchases. Further, the disallowance of ₹ 65,17,186/- is without any basis. The Revenue has brought no material on record to show that the purchases claimed by the assessee were not reasonable considering the prevailing market condition at the material time. It is also not the case of the Revenue that the income disclosed by the assessee was not reasonable compared to the income disclosed by other assessees in the same line of business or in view of the past accepted position in the case of the assessee. In the above facts and circumstances of the case, in our consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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