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TMI Blog2022 (11) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax-Circle-3, Pune [for short "AO"] for the assessment year 2009-10. 2. The grounds as raised in the memorandum are; "1. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in restricting the disallowance to 17.96% of the alleged hawala purchases over & above the profit shown by the assessee even through the assessee could not produce primary evidences like octroi receipt, lorry receipt, delivery challans, stock register, weighing slips etc., to prove the genuineness of purchases. 2. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in arriving at the disallowance by adopting a Gross Profit ration of 17.96% on alleged bogus purchase which is without any basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the existence of ten hawala operators. In response thereto, the authorised representative [for short "AR"] tendered a written submission annexing copies of tax invoices, details of bank payment and ledger accounts etc. 3.3 In the absence of shred of evidence showcasing the existence of hawala dealers and physical movement of goods viz; purchase order, lorry receipt, weigh-ment slips, octroi receipts, goods received note, gate entry register and stock register etc., the Ld. AO treating the total hawala purchases of Rs.64,33,495/- as bogus, culminated the assessment u/s 143 r.w.s. 147 of the Act, by disallowing the entire amount debited to profit & loss account [for short "P&L"]. 3.4 In an appeal before first appellate authority [for sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the respondent appears afterwards and satisfies placing evidential material to the effect that, there was sufficient cause for his non-appearance when the appeal was called for hearing and in the event of failure to substantiate the non-appearance, the setting aside exercise crashes. 5. During the course of physical hearing, the learned departmental representative [for short "DR"] adverting Para 4.2 (Page 03/04) of the assessment order strenuously opposed the action of Ld. FAA in restricting the disallowance to GP Ratio being without justification, baseless and against the law laid by the Hon'ble Apex Court in "N. K. Protein Vs DCIT" (supra). It is further argued that, the action of Ld. CIT(A) merits reversal for the reasons that, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, the ratio laid in "Mohammad Haji Adam & Co." (Supra) cannot squarely be applied to the present case for three factual variations, firstly the assessee before us is neither a trader nor a dealer but a Govt Civil Contractor and secondly there was complete absentia with regards to quantitative details or consumption of material purchased, and finally the sales or revenue were not exclusively with reference to goods purchases/consumed but inclusive of work contract services. However, the Hon'ble Lordship had occasioned to considered similar facts and circumstance in the case of "PCIT Vs Pinaki D Pinani" (Bombay ITA/1543 of 2017), wherein the assessee being civil contractor, with evidential stock records and sales, was able to demonstrate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal having once come to a categorical finding that the amount of Rs. 2,92,93,2887- represented alleged purchases from bogus suppliers it was not incumbent on it to restrict the disallowance to only Rs. 73,23,3227-." 9. In the present case too, when it has been categorically established that, the amount of bogus purchases Rs.64,33,495/- is debited to P&L by fictitious tax invoices and the respondent assessee failed to establish the consumption of such goods in the execution of civil contract by adducing such stock movement records to the satisfaction of Ld. AO., then taxing such bogus purchases GP rate of goes against the principles of taxation embedded in chapter VI of the Act and against the ratio laid down in "N K Proteins Ltd" and "P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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