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TMI Blog2021 (4) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be done. In the present case the facts of the case indicate that assessee has made purchase from the grey market. This is also the finding of learned CIT(A). Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expenses of the exchequer. In such situation in our considered opinion on the facts and circumstances of the case the 12.5% disallowance out of the bogus purchases meets the end of justice. In this regard we also note that Id counsel of the assessee has submitted that in assessee's own case for A.Y. 2007-08, ITAT in similar facts has restricted the disallowance to 12.5%. A.Y. 2007-08 is also a port of common order of learned CIT(A) and it is not the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gus purchase following Hon'ble Gujarat High court decision in N.K. Proteins Ltd. (250 ITR 22). Learned CIT(A) has held as under :- A perusal of the investigation report of the DDIT(Inv) 1(4) Mumbai shows that an Financial Investigation Unit- Suspicious Transaction Report (FIU-STR) was received in respect of one Shri Krishna Kumar Gupta. The investigation showed that Shri Gupta was operating and managing various entities through which accommodation entries were being provided. M/s Hicon Constructions, the appellant in this appeal, was one such beneficiary. Shri Gupta admitted to providing bogus bills in his statement recorded u/s 131 and listed the entities involved. To specific questions, Shri Gupta confirmed that credit of cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies in as much as he stated that material was actually purchased though the documentation was incomplete. He also stated that he was unable to comment on the statement of Shri Gupta. However, finally he did state that purchases of ₹ 11,20,777/- in FY 2006-07, ₹ 2,88,45,497/- in FY 2007-08 is offered as income in AY 2009- 10 when project was completed and Rsl,94,04,551/- in AY 2010-11. 6.2. Thus it is observed that the contention that opportunity was not given to rebut the findings in respect of impugned purchases is not factually correct. The appellant has also contended that without prejudice to its contention that there are no bogus purchases, the purchases from other parties may have been made and the disallowance be rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,41,860 38,802 NP as % of Income 38.20% 44.96% 29.09% 1.89% Addition to construction cost (including purchases) during the year 4,49,48,79T (2,83,61,309) 636,18,918 (3,86,00,898) 6,32,12,585 3,21,82,195 (57,29,669) Disallowance 11,20,777 2,88,45,497 - 1,94,04,551 6.4. Perusal of details called also shows that in AY 2009-10, the audited accounts showed on money received as ₹ 4.86 crores against which expenditure as per seized documents was claimed as ₹ 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore restricted to ₹ 2,80,195/- in AY 2007-08, ₹ 72,11,374/- in AY 2008-09 and ₹ 48,51,140/- in AY 2010-l1. 4. Against above order assessee is in appeal before the ITAT. We have heard both the counsel and perused the records. Upon careful consideration we find that assessee has provided the documentary evidence for the purchase. Adverse inferences have been drawn due to the inability of the assessee to produce the suppliers and also the statement of the partner of the assessee firm. We find that in this case the sales or any other aspect of assessee's workings have not been doubted. It is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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