2021 (9) TMI 629

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..... y the assessee from contract work has not been disputed by the Revenue. The assessee is a work contractor. Without material the assessee could not have completed the contract job. Ostensibly, the assessee has procured the material for performing contract job either from grey market or any other sources. Thereafter, the assessee obtained bogus purchases bills from hawala operator. As in M/S. PAR .....

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..... 2. The brief facts of the case as emanating from records are: The assessee is a civil contractor. The assessee field its return of income for the impugned assessment year on 29/09/2011 declaring total income of ₹ 19,38,660/-. The return of the assessee was processed under section 143(1) of the Income Tax Act, 1961 (in short the Act ). The case of assessee was selected for scrutiny and s .....

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..... g Officer made addition of entire bogus purchases. Aggrieved by the assessment order dated 26/03/2014, the assessee filed appeal before the CIT(A). The CIT(A) after considering the facts of the case concluded that since the assessee had done work in respect of Government contracts, the materials must have been utilized. The assessee must have procured material from somewhere else and obtained bill .....

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..... d the impugned order and prayed for dismissing the appeal of assessee. The ld. Departmental Representative submitted that the assessee has obtained bogus purchase bills from suspicious dealer identified by the Sales Tax Department, Government of Maharashtra. During the assessment proceedings and even before the CIT(A) the assessee could neither produce documents to prove genuineness of the purchas .....

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..... he profit element embedded in the bogus purchases that has to be brought to tax. Estimation of disallowance at 30% by the CIT(A) is very much on the higher side. Considering entirety of facts, estimation of GP @12% of bogus purchases would meet the ends of justice. I hold and direct accordingly. 6. In the result, appeal by assessee is partly allowed. Order pronounced in the open Court on Mon .....

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