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TMI Blog2019 (6) TMI 1666X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasing the goods from the grey market have to be brought to tax. In the present case, the assessee is a dealer in iron and steel items and the applicable VAT rate is 4%. Under these circumstances, we are of the view that the purchases which are stated to be bogus should be brought to tax @ 5%. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to apply a rate of 5% on these bogus purchases. - ITA Nos.3532 & 3533/M/2018 (Assessment Years: 2010-11 & 2011-12), ITA Nos.3534 & 3535/M/2018 (Assessment Years: 2010-11 & 2011-12) - - - Dated:- 28-6-2019 - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER Assessee by : Shri Ishwar Prakash Rathi, A.R. Revenue by : Shri Arvind Kumar, D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 148 of the Act on 27.02.2014 and thereafter during the assessment proceedings called upon the assessee to furnish various details and evidences to prove the genuineness of these purchases. The AO also issued notices under section 133(6) of the Act to these parties. However, the said notices were not returned unserved or unclaimed. The assessee during the course of assessment proceedings filed bills, vouchers, bank details etc to prove the genuineness of the purchases. However, the AO was not convinced with the said evidences and came to the conclusion that assessee should have furnished the inward stock register and consumption/sales records to prove the genuineness of the purchases. Finally the AO after rejecting the books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serve that the assessee has already accounted for these purchases in the books of accounts and have returned the profits on these purchases. Under these circumstances, in our view, the only savings which the assessee may have made by purchasing the goods from the grey market have to be brought to tax. In the present case, the assessee is a dealer in iron and steel items and the applicable VAT rate is 4%. Under these circumstances, we are of the view that the purchases which are stated to be bogus should be brought to tax @ 5%. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to apply a rate of 5% on these bogus purchases. 8. In the result, the appeal of the assessee is allowed. ITA Nos.3533, 3534 3535/M/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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