9911796707
TMI Blog2023 (6) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition made on account of commission expenditure u/s 69C of the Act @ 3% - We do not deem it fit to interfere in the said order of the ld.CIT(A) in this regard. We are in agreement with the observation of the ld.CIT(A) that out of bogus purchase made from Giriraj Global Limited, the assessee had made bogus sales to Barsana Fabtex Pvt. Ltd., i.e., bogus sales has been made out of bogus purchases. When both the transactions are bogus, only the profit element embedded thereon could be brought to tax. This has been rightly done by the ld.CIT(A). Determination of gross profit @ 11.69% on the corresponding purchases of Rs. 27,22,028/- attributable to genuine sales made to Anirudh Raj Builders Pvt. Ltd. - We find that though the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2022 by the Assessing Officer, Central Circle-27, New Delhi (hereinafter referred to as ld. AO ). 2. The issues involved in both these appeals are common and, hence, they are taken up together and disposed of by this common order for the sake of convenience. 3. The only effective issue on merits to be decided in this appeal is as to whether the ld.CIT(A) was justified in giving partial relief in respect of disallowance made on account of bogus purchases by the ld. AO in the facts and circumstances of the instant case. The interconnected issue involved therein is as to whether the ld.CIT(A) was justified in upholding the adhoc addition made in respect of commission payment on estimation basis as unexplained expenditure u/s 69C of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ltd., to whom the assessee has made sales. Considering all these facts, the ld. AO recorded reasons for reopening the assessment and issued notice u/s 148 of the Act after obtaining the approval from the Principal Commissioner of Income-tax, Central-3, New Delhi, in terms of section 151 of the Act. 5. The assessee is engaged in the business of civil construction and execution of infrastructure sector/projects and generation of solar electricity. In response to the notice issued u/s 148 of the Act, the assessee electronically filed its return of income on 14.04.2021 declaring total income of Rs. 35,84,80,810/- which was same as the assessed income earlier u/s 143(3) r.w.s. 153A of the Act dated 18.05.2016. The assessee requested the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raj Builders Pvt. Ltd., for Rs. 27,31,750/-. It was submitted that both the sales made to these two parties were duly accounted in the books of the assessee company. The assessee also submitted that merely because the supplier, i.e., M/s Giriraj Global Limited, had not responded to the notice issued u/s 133(6) of the Act, no adverse inference could be drawn on the assessee company by disbelieving the purchase made from the said party. The ld. AO, however, ignored the contentions of the assessee and by placing reliance on the statement of Shri Anil Kumar Singhal, proceeded to disallow the entire purchases made by the assessee as unverifiable and bogus in the sum of Rs. 3,26,18,066/- u/s 37(1) of the Act. 7. The ld. AO further observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had already disclosed the profit earned from such bogus transaction in its returns. Further, he concluded that sale made to Anirudh Raj Builders Pvt. Ltd., ( which is genuine sale) were also made out of purchases from Giriraj Global Limited partially and hence to this extent, corresponding purchases of Rs. 27,22,028/- is to be treated as unverifiable and bogus. But, since the said unverifiable and bogus purchases had been sold by the assessee to Anirudh Raj Builders Pvt. Ltd., only the profit element thereof had to be brought to tax. The ld.CIT(A) observed that the gross profit declared by the assessee was 11.69% during the year under consideration. Accordingly, he sought to add 11.69% of the disputed purchases of Rs. 27,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in this regard. 12. Further, it is not in dispute that the assessee had made bogus purchase from Giriraj Global Limited and part of it had been sold to Barsana Fabtex Pvt. Ltd. The profit embedded in its transaction had already been disclosed by the assessee in the returns. We are in agreement with the observation of the ld.CIT(A) that out of bogus purchase made from Giriraj Global Limited, the assessee had made bogus sales to Barsana Fabtex Pvt. Ltd., i.e., bogus sales has been made out of bogus purchases. When both the transactions are bogus, only the profit element embedded thereon could be brought to tax. This has been rightly done by the ld.CIT(A). 13. With regard to determination of gross profit @ 11.69% on the correspond ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
