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TMI Blog2021 (1) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to demonstrate before him that the impugned purchases had either found its way as a part of the accounted sales or formed part of its closing stock for the year under consideration. In case the assessee is able to demonstrate before the A.O that the impugned purchases were either accounted for in its sales or formed part of its closing stock for the year under consideration, then, the scaling down of the disallowance by the CIT(A) to 4% of the aggregate value of the impugned purchases would be in order. Appeal filed by the revenue is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... her observed by the A.O that purchases relatable to 5 parties (out of 11 parties), viz. Manav Impex (Sr. No. 2), Navdeep Trading Corpn. (Sr. No. 7), Siddi Enterprises (Sr. No. 9), Ghatalia Sales (Sr. No. 10) and Ashirwad Exp (Sr. No. 11) were already considered by his predecessor while framing the regular assessment vide his order passed u/s 143(3), dated 23.12.2011 and an addition @1% of the turnover was made. Accordingly, the A.O confining himself to the purchases aggregating to ₹ 1,21,34,099/- claimed by the assessee to have been made from the remaining 6 parties therein called upon it to produce the purchase and sale bills/invoices to support the authenticity of the said purchase transactions. However, the assessee expressed its inability to produce the requisite documents on the plea that the Sales Tax department in the course of an action conducted on it had taken possession of all its books, purchase and sales files and other documents. In order to fortify its aforesaid claim the assessee produced the receipt issued by the Sales Tax department. However, in its attempt to impress upon the A.O as regards the genuineness of the impugned purchase transactions the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons it was averred by the ld. D.R that the order of the CIT(A) be 'set aside' and that of the A.O be restored. 6. Per contra, the ld. Authorized Representative (for short "A.R") for the assessee relied on the order of the CIT(A). It was submitted by the ld. A.R that the CIT(A) following the view that was taken by his predecessor while disposing off the assessee's appeal for A.Y 2010-11 had rightly restricted the addition to 4% of the aggregate value of the impugned purchases. It was further submitted by the ld. A.R that the order passed by the CIT(A) for A.Y 2010-11 had thereafter been upheld by the Tribunal, vide its order passed in ITA No. 4158/Mum/2018, dated 13.05.2019 (copy placed on record). It was thus submitted by the ld. A.R that as no infirmity did emerge from the order of the CIT(A), therefore, the appeal filed by the revenue being devoid and bereft of any merit was liable to be dismissed. 7. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, the assessee in the course of the proceedings before the lower authorities had failed to substantiate the genuineness an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a part of the accounted sales or formed part of the closing stock of the assessee for the year under consideration. In fact, as observed by us hereinabove, the assessee had expressed its inability to produce the documentary evidence substantiating the fact that the sales corresponding to the impugned purchases were duly accounted for in its books of accounts. In the backdrop of the aforesaid facts we are unable to concur with the view taken by the CIT(A) that the addition in respect of the impugned purchases was liable to be restricted only to the extent of the profit which the assessee would had made by procuring the goods at a discounted value from the open/grey market. Insofar the reliance placed by the CIT(A) on the order passed by his predecessor while disposing off the assessee's appeal for A.Y 2010-11, we find, that the same being distinguishable on facts had wrongly been acted upon by him for restricting the addition only to the extent of the benefit which the assessee would had made by procuring the goods at a discounted value from the open/grey market as against that shown by it in its books of accounts. On a perusal of the order passed by the CIT(A) for A.Y 2010-11, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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