9911796707
TMI Blog2021 (8) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... ases only from grey market in order to have savings from VAT and incidental profit element thereon. It would be just and fair to bring to tax only the profit element embedded in the value of such disputed purchases in as much as the ld. CIT(A) accepted the fact that the goods made by the assessee from the aforesaid suppliers had been actually consumed by it in the projects. For the purpose of determination of profit element embedded in the value of such disputed purchases, since the assessee had made purchases from the grey market, we hold that it could have saved in VAT portion and incidental profit element thereon making cash purchases. AO is directed to determine the profit element embedded in the value of disputed purchases in the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said project i.e. Bhoomi Mall was granted on 28/04/2006 by the Local Authority, Navi Mumbai Municipal Corporation, Navi Mumbai. The assessee is one of the entities of Gajara group. A search and seizure action u/s.132(1) of the Act was conducted in the case of Gajara Group on 19/02/2009. During the course of regular assessment proceedings for A.Y.2010-11, the assessee was asked to produce the entire books of accounts by the ld. AO which were duly produced and verified by the ld. AO. The ld. AO observed that assessee had made certain purchases from certain dealers whose names appear to be tainted dealers in the website of sales tax department, Government of Maharashtra and accordingly, the said information was passed on by the Sales Tax d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bear TIN of the dealers / suppliers, copies of delivery challans, copies of confirmation received from the dealers / suppliers and copies of bank statement evidencing the payments made to those suppliers by account payee cheques before the ld. AO. It was also claimed that due to lack of sufficient opportunities to prove the genuineness of purchases, the quantitative details could not be furnished before the ld. AO. Accordingly, the quantitative details were furnished before the ld. CIT(A) by the assessee proving the fact that the materials purchased from the aforesaid suppliers were actually consumed by the assessee in various projects. Accordingly, it was claimed that the purchases made by the assessee were genuine. The assessee also plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition @39.56% of value of disputed purchases of ₹ 1,98,37,965/- and restricted the addition amount to 78,47,900/-. Against this order of the ld CIT(A), both revenue as well as assessee are in appeal before us. 3.2. We find that there is no dispute that the assessee had made purchases from tainted suppliers. We find that though these parties had filed an affidavit before the Sales Tax department that they are genuinely engaged in the business, the assessee herein could not prove the genuineness of purchases made from those parties with conclusive evidences. Hence, it could be safely concluded that assessee could have made purchases only from grey market in order to have savings from VAT and incidental profit element thereon. It wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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