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TMI Blog2021 (4) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... x-17 Vs. M/s Mohhomad Haji Adam Company [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] while upholding the order of the Tribunal, had observed, that the addition in the hands of the assessee as regards the bogus/unproved purchases was to be made to the extent of bringing the G.P rate of such purchases at the same rate as that of the other genuine purchases. Addition in respect of purchases which were found to be bogus in the case of the assessee before them, a trader, was to be worked out by bringing the G.P. rate of such bogus purchases at the same rate as that of the other genuine purchases. We, respectfully following the aforesaid judgment of the Hon ble High Court direct the A.O to restrict the addition insofar the bogus/unproved purchases in the case before us is concerned, by bringing the G.P rate on the amount of such bogus purchases at the same rate as that of the other genuine purchases. Needless to say, the assessee in the course of the set aside proceedings shall furnish the requisite details before the A.O, who shall after making necessary verifications restrict the additions in terms of our aforesaid observations. The order passed by the CIT(A) is set aside and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stressed on the genuineness of the transaction, and the fact that the same was duly accounted for in its books of accounts. In order to fortify the authenticity of the aforesaid purchase transaction the assessee placed on record the copy of the purchase bill and also drew support from the fact that the payment of the purchase consideration was made through banking channel. Apart from that, the assessee produced the stock ledger wherein the aforesaid purchase transaction was duly reflected. In order to verify the veracity of the aforesaid purchase transaction the A.O issued summon under Sec. 131 of the Act to the aforesaid party viz. M/s Moulimani Impex Pvt. Ltd., which, however, was not complied with by the latter. In the backdrop of the aforesaid facts, the A.O was of the view that the assessee had failed to substantiate the genuineness and veracity of the impugned purchases under consideration. Further, observing that the assessee could also not prove the usage of the material purchased, the A.O holding a conviction that as the assessee had merely booked the purchases without actually getting any material, disallowed the entire amount of the impugned purchases of ₹ 7,51,450 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of the search proceedings conducted under Sec. 132(1) on certain entities engaged in the business of providing accommodation entries/bills, the name of the assessee had surfaced as a beneficiary that had obtained accommodation purchase bill. In the backdrop of the aforesaid facts, we are of the considered view that a very heavy onus was cast upon the assessee to dispel all doubts as regards the genuineness and veracity of the purchases which it had claimed to have made from M/s Moulimani Impex Pvt. Ltd, as the latters name had figured in the list of the tainted concerns which were engaged in the business of providing accommodation entries. However, on a perusal of the orders of the lower authorities, we find, that the assessee except for producing the purchase bill and harping on the fact that the payment to the aforementioned party was made through banking channel, had however, failed to placed on record any other supporting documentary evidence viz. delivery challan etc, which would have conclusively proved the genuineness of the transaction under consideration. In fact, non compliance of the summon issued by the A.O under Sec. 131 of the Act to the aforesaid party furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of the assessment proceedings. 7. In the backdrop of our aforesaid deliberations, we are of the considered view that it can safely be concluded that the assessee had purchased the goods under consideration, though not from the aforementioned party viz. M/s Moulimani Impex Pvt. Ltd, but from the open/grey market. We are of a strong conviction that in the totality of the facts of the case before us the addition in the hands of the assessee is liable to be restricted only to the extent of the profit which it would have made by procuring the goods at a discounted value from the open/grey market. Insofar the quantification of the profit from making of the impugned purchases is concerned, we find that the Hon ble High Court of Bombay in its recent judgement in the case of Pr. Commissioner of Income Tax-17 Vs. M/s Mohhomad Haji Adam Company (ITA No. 1004 of 2016, dated 11.02.2019) while upholding the order of the Tribunal, had observed, that the addition in the hands of the assessee as regards the bogus/unproved purchases was to be made to the extent of bringing the G.P rate of such purchases at the same rate as that of the other genuine purchases. The Hon ble High Court whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. All Income Tax Appeals are dismissed, accordingly. No order at costs. As such, the Hon ble jurisdictional High Court had observed that the addition in respect of purchases which were found to be bogus in the case of the assessee before them, a trader, was to be worked out by bringing the G.P. rate of such bogus purchases at the same rate as that of the other genuine purchases. We, thus, respectfully following the aforesaid judgment of the Hon ble High Court direct the A.O to restrict the addition insofar the bogus/unproved purchases of ₹ 7,51,450/- in the case before us is concerned, by bringing the G.P rate on the amount of such bogus purchases at the same rate as that of the other genuine purchases. Needless to say, the assessee in the course of the set aside proceedings shall furnish the requisite details before the A.O, who shall after making necessary verifications restrict the additions in terms of our aforesaid observations. The order passed by the CIT(A) is set aside and the matter is restored to the file of the A.O for the limited purpose of giving effect to our aforesaid directions. 8. Resultantly, the appeal of the assessee is partly allowed for statist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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