9911796707
TMI Blog2023 (6) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... as assailed the impugned order on the following grounds of appeal: "1. On facts and circumstances of the case, the Ld. CIT(A) has erred in sustaining the order of the A.O wherein the A.O has erred in making addition of Rs. 7,15,594/- on account of bogus purchases thereby treating it as unexplained investment u/s. 69. Thus, the addition made by the A.O and sustained by the CIT-A is unjustified, unwarranted and uncalled for. 2. The assessee reserves the right to add, amend or alter any grounds of appeal at any time of hearing." 2. Succinctly stated, the assessee firm which is engaged in the business of manufacturing and trading of steel and wooden furniture & coolers etc. had filed its return of income for the assessment year 2010-11 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal authorities as unserved. 5. Considering the aforesaid facts, the A.O called upon the assessee to substantiate the authenticity of the purchase transaction in question, which the assessee failed to do by placing on record the requisite documentary evidence. It was observed by the A.O that the assessee's claim of having made payments towards purchase consideration to the aforementioned party, viz. M/s. Tirupati Traders, Raipur was not borne from the records, as the same revealed only a payment of Rs. 40,000/- during the year under consideration. As the assessee had failed to substantiate the authenticity of the purchase transactions in question, therefore, the A.O holding the books of account of the assessee as not reliable held the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his claim of having made purchases of Rs. 7,15,594/- from the aforementioned tainted party, viz. M/s. Tirupati Traders, Raipur. As the assessee had failed to discharge the onus that was cast upon it as regards proving the authenticity of the purchase transactions in question, therefore, I have no hesitation in concluding that no genuine purchases were made by the assessee from the aforesaid party. However, the observation of the A.O that the assessee as against the purchases of Rs. 7,15,594/- had during the year under consideration made a payment of only Rs. 40,000/- is found to be perverse. I, say so, for the reason that a perusal of the bank account of the assessee to which my attention was drawn by the Ld. AR during hearing of the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had failed to do so. Although, the notice issued by the A.O u/s. 133(6) of the Act to the aforesaid supplier, viz. M/s. Tirupati Traders, Raipur was returned unserved by the postal authorities, but the same in my considered view cannot be conclusive for dubbing the purchase transactions in question as bogus. 11. Considering the facts involved in the present case, I am of a strong conviction that though the assessee had failed to substantiate the authenticity of the purchase transaction in question by placing on record supporting documentary evidence to the satisfaction of the A.O, but considering the fact that the A.O had not dislodged the sales of the assessee, therefore, it can safely be concluded that the assessee had made purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases at the same rate of other genuine purchases. The Hon'ble High Court while concluding as hereinabove had observed as under: "8. In the present case, as noted above, the assessee was a trader of brics. The A.O found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct incontending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue." 9. In these circumstances, no question of law, therefore, arises. All Income Tax Appeals are dismissed, accordingly. No order at costs." It was observed by the Hon'ble High Court that the addition in respect of purchases which were found to be bogus/unproved in the case of the assessee before them, who was a trader, was to be worked out by bringing the G.P. rate of such bogus purchases at the same rate as that of other genuine purchases. I, thus, on the basis of the aforesaid observation of the Hon'ble High Court is of the considered view, that on the same lines, the profit which the assessee before me would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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