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TMI Blog2019 (10) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case has claimed to have purchased the goods from the parties not having valid VAT/CST registration certificate though he is claiming to have purchased goods from the registered party. Moreover, there was no submission from the side of the assessee against the finding of the Maharashtra Sales Tax Department wherein it was alleged that the parties are not genuine. In view of the above, we can presume that the actual purchases were made by the assessee from the grey market but shown in the name of impugned parties. Assessee has already declared the GP in its books of accounts by recording the sales and the corresponding purchases. But to prevent the possible leakage of the Revenue, as the purchases from the local/grey market is normally cheaper, we are inclined to make the ad hoc addition at the rate of 5% of such purchases in order to meet the end of justice and to stop the ongoing dispute. In holding so, we find support and guidance from the judgment of ITAT Ahmedabad in case of ITO vs. Sun steel [ 2004 (6) TMI 236 - ITAT AHMEDABAD-B] We direct the AO to make the ad-hoc addition on such purchases as discussed above. Hence the ground of appeal of the assessee is partly al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Sky Forge Pvt. Ltd 3. S G Engineers Pvt. Ltd. 4. Asi Engineers Pvt. Ltd. 5. Sempitern India 6. True Forge Pvt. Ltd. 7. Uttam Industries Engineering Ltd. 8. Nataraj Machinary Pvt. Ltd 9. Web Tech Engineering Pvt. Ltd. 10. Sidharth and Goutam Engineers 3.2 The assessee has also claimed to have availed the services of certain transporters as detailed under: Sr. No. Name of the transporter 1. Mahalaxmi Road Carrier 2. Uttam Cargo Management Services 3. Jaipur Golden Transport Co. Pvt. Ltd. 4. However, the AO during the assessment proceedings observed certain facts as enumerated below: i. There was the information received from the Maharashtra sales tax departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounts and the same has been offered to tax in the income tax return. 5.5 The assessee also claimed that the details of the notices and corresponding reply under section 133(6) of the Act from the parties were not made available for the rebuttal. 5.6 However, the AO disagreed with the contention of the assessee by observing that none of the purchase party was served the notice issued under section 133(6) of the Act. Therefore, the purchases as claimed are not genuine as these were made from the non-existent parties. 5.7 It was the duty of the assessee to collect the details of the notices issued and the replies in response to such notices issued under section 133(6) of the Act on making the payment of the requisite fees. 5.8 The payment against the purchases was not made in any of the case during the year under consideration. As such the payment was made in the subsequent year. In view of the above and after considering the information received from the Maharashtra sales tax department, the AO held that the impugned purchases of ₹ 55,61,085.00 are bogus. Accordingly, the AO disallowed the same and added to the total income of the assessee. The aggrieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases can be made out. 8.4 Alternatively, it is a normal practice whereby purchases are actually made from unregistered dealers or other suppliers who do not issue any bills and hence, to regularize such bills, accommodation bills are obtained. But such purchases of the goods by itself doesn t render concerned purchases as bogus. In such scenario, addition should be confirmed based on some reasonable estimate. 9. On the other hand, the Ld. DR before us vehemently supported the order of the authorities below. 10. We have heard the rival contentions of both the parties and perused the materials available on record. The AO in the instant case has treated the purchases from the 6 parties as discussed above as bogus purchases. The primary reason for treating such purchases as unexplained expenses that these parties were declared bogus by the Maharashtra Vat Department as providing Hawala entries. 10.1 Subsequently, the Ld. CIT(A) confirmed the order of the AO by observing that the onus lies on the assessee to justify the expenses incurred by him by producing the parties besides the documentary evidence. 10.2 From the preceding discussion we also note that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance addition of ₹ 26,89,407 is deleted out of the total addition made of ₹ 27,39,407. In view of the above, we direct the AO to make the ad-hoc addition on such purchases as discussed above. Hence the ground of appeal of the assessee is partly allowed. 10.5 The assessee has raised the additional ground of appeal vide letter dated NIL which was received dated 19-3-2019 as detailed under: The appellant, through oversight, could not raise in the original appeal memo, the following legal ground of appeal and therefore, appellant now craves leave to raise this additional ground of appeal before this Hon ble ITAT. This, being a legal ground, can be raises before Hon ble the ITAT as per decision of Hon ble Supreme Court in the case of National Thermal Power 229 ITR 383. 1. On the facts and circumstances of the case, the Assessing Officer was not justified in reopening the assessment under section 147 of the Act. Appellant craves leave to add, amend, alter, change, delete and edit the above ground of appeal before or at the time of the hearing of the appeal. 11. At the outset Learned Counsel appearing for the assessee did not press the additional ground ..... 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