9911796707
TMI Blog2024 (8) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... ebutted by the lower authorities, the maximum profit margin can be @ 0.15%. As submitted that under any circumstances at the most, the profit margin cannot be assessed more than 0.15% of the disputed purchases. Thus, is directed that in respect of disputed purchases AO will take GP rate @ 0.15% on the corresponding sales instead of @ 0.13% shown by the assessee. Appeal of the assessee is treated as partly allowed. - Shri Sanjay Garg, Judicial Member And Shri Rakesh Mishra, Accountant Member For the Assessee : Shri Somnath Ghosh, AR For the Revenue : Shri Abhijit Kundu, CIT-DR ORDER PER SANJAY GARG, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the order dated 29.09.2023 of the National Faceless Appeal Centre [hereinafter referred to as CIT(A) ] passed u/s 250 of the Income Tax Act (hereinafter referred to as the Act ). 2. The assessee in this appeal has agitated against the confirmation of addition by the ld. CIT(A) of Rs. 85,13,92,096/-, which has been made by the Assessing Officer u/s 69C of the Act on account of bogus purchases. 3. The brief facts of the case are that the assessee is an individual and is engaged in the business of dealing in bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is the confirmation of accounts of the specific vendors as required. 4.4.1 A copy of the invoices of the specific vendors is attached herewith. 4.4.2 As mentioned in point 4 above, the vendor is not obliged to share their ITR with us. Regarding GST return, they are not obliged to share a copy of their complete return, but the transactions done with us has been verified with Form 2A and reconciliation is stated above is point 4.2. 4.4.3 Date of payment to the vendors is mentioned in the confirmation of accounts and all payments were made during the relevant assessment year. 5. We have provided all the relevant documentary evidences to prove that the purchases with the said vendors are genuine and not bogus in nature. 3.2 However, the Assessing Officer did not get satisfied with the aforesaid reply of the assessee and pointed out the following discrepancies: 4. The facts of the case in hand are important for consideration. As a matter of fact as discussed above, it is crystal that the assessee had shown bogus purchases amounting to Rs. 85,13,92,096/- which are supported with bogus bills, ii) debit and credit entries in the bank accounts with these vendors also confirms that these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed to be added back is very high pitched and adverse for us. 6. We would also like to highlight the case of Shri Hasmukh J. Ruparelia vs. Income tax officer ward 22(1)(5), Mumbai and vice versa- 2020 (11) TMI 739-ITAT Mumbai. In the above-mentioned case, purchases were found to be genuine and supplier parties found bogus only profit which was embedded in the amount could be taxed. 7. We have further documents, arguments, and explanations to establish our case and will request for a video conference to present our case. 3.4 However, the Assessing Officer rejected the aforesaid contentions of the assessee observing as under: 1) As discussed in the forgoing paragraphs, the assessee had not produced any evidence regarding the authenticity of its purchases from above mentioned parties mere claiming that goods were delivered by a person who travelled by train. However, the assessee has not provided any details of such persons who has delivered the goods nor the relationship with such persons. The assessee has also provided illegible copies of rail tickets. Therefore, the claim of the assessee is disbelieving and appears to be an afterthought of the assessee. The assessee had not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus purchase or sale. That the margin in the said business is very low, which ranges from 0.08% to 0.13%, which anyway does not exceed 0.15% of gross profit, even at its peak of penalization. The ld. counsel has further relied upon the turnover of the assessee for the last four years, which is reproduced as under: Financial Year Turnover Gross Profit G.P.% 2018-19 1,61,65,75,410 13,08,729 0.08% 2019-20 3,33,64,26,845 47,97,068 0.14% 2020-21 1,65,17,89,324 22,42,116 0.14% 2021-22 22,75,63,332 2,90,589 0.13% 5.1 The ld. counsel has further submitted that the sales have not been disputed either by the Assessing Officer or by the ld. CIT(A). He, has submitted that there cannot be any sales without purchases, therefore, the addition on account of purchases without rejecting the sales is not sustainable. The ld. counsel has further relied upon the submissions and documents furnished by the assessee to submit that the assessee had duly furnished all the documents to prove the purchases. He in this respect has submitted that the assessee had produced before the Assessing Officer, the purchase invoices issued by the vendors, ledger of the parties in the books of account of the assessee, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d purchases were accommodation entries, was wrong and false. That so far as the allegation of the Assessing Officer that the said vendors did not file their Income Tax Returns is concerned, that was not in the control of the assessee. Further, the allegation of the Assessing Officer was that the said vendors have subsequently cancelled their GST registration, that has also nothing to do with the assessee. That during the period, the transactions were made, the said vendors were duly registered under the GST and have also shown the transaction in their GST returns. That so far as the allegation of the Assessing Officer was that there were certain cross entries in this respect, the ld. counsel has explained that sometimes in the business of bullion, advance payments are made, however, when the goods cannot be delivered on time, under the circumstances, the advance payments are returned back by the vendors to the assessee, however, this does not disprove the purchases made by the assessee. The ld. AR concluded his arguments by stating that when the sales have been admitted, there was no question of rejecting the purchases. 6. The ld. DR, on the other hand, has relied upon the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses. The assessee has already shown GP rate of 0.13% on its sales which seems quite reasonable. The assessee has also demonstrated that if the purchases are held to be bogus and the corresponding expenses are reduced from the sales, the GP percentage, under such circumstances, would come to 26% of the sales, which is not possible in the business or trading of precious metals like gold and silver, wherein, the daily prices are regulated by market and by no regulator stretch of imagination it is possible to inflate the purchases. In view of the above facts on the file, the addition of entire purchases of bullion by the assessee is not sustainable as per law. Even it is assumed that the assessee had made purchases from some other vendors, even then as pleaded by the assessee and not rebutted by the lower authorities, the maximum profit margin can be @ 0.15%. The ld. counsel has submitted that under any circumstances at the most, the profit margin cannot be assessed more than 0.15% of the disputed purchases. Considering that there were certain discrepancies pointed out by the Assessing Officer and considering the above submissions of the assessee, it is directed that in respect of disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
