9911796707
TMI Blog2024 (12) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that out of 20 sample vendors to whom the notice under section 133(6) is issued, only 2 parties have not responded. Further the sample transactions which the AO is alleging as bogus is less than 1% of the total purchases of the assessee and AO on the basis of a small sample holding the entire transaction as bogus without any basis is not justifiable. From the perusal of the CIT(A)'s order, we notice that many findings given by the CIT(A) does not pertain to the assessee and therefore there is merit in the contention of the assessee that the CIT(A) has simply confirmed the addition made by the AO without examining the appeal on merits by applying his mind. In view of these discussions we hold that the addition made by the AO deserves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, and in law, the appellate order so framed be held as bad and illegal, as: (i) The same is framed in breach of the principles of natural justice; and (ii) The same is passed without application of mind to the facts. 3. WITHOUT FURTHER PREJUDICE TO THE ABOVE 3.1 The Ld. CIT (A) erred in confirming the action of the A.O. in rejecting books of accounts of the Appellant. 3.2 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for. 4. WITHOUT FURTHER PREJUDICE TO THE ABOVE 4.1 The Ld. CIT (A) erred in confirming the action of the A.O. in making addition of Rs. 69,35,217/- to the income of the Appellant on the basis of estimation of G.P. , on account of alleged non genuine purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total purchases made by the assessee from various parties, the purchases made from the following parties are bogus: SR No. HAWALA NAME HAWALA PAN HAWALA TIN AMOUNT Rs. 1 KINGSY PHARMAX ABRPW5450E 27490786979V 12,075/- 2 TRISHNA IMPEX AAEPS4606C 27890650959V 23,444 3 CPRIHANS TRADE CENTRE ADXPD0923F 27950372536V 154,823 4 GROWELL ENTERPRISES AHQPP1838A 27920289666V 357,000 3. The AO called on the assessee to furnish certain specific details with regard to the above parties. The assessee submitted the invoices from the parties, bank statements in support of the payments made, the quantitative details, stock details, ledger account of the parties and affidavit of a broker through whom purchases were made from 2 parties. The AO after perusing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut making any actual deliver of goods. It is therefore, obvious that the Profit ratio is automatically reduced. The assessee has supplied one copy of item register (i.e. Purchase with corresponding sales) in respect of parties in which information are received from sales Tax and DIT (Inv) Mumbai. Perusal of the same reveals that the assessee has purchased items of chemicals and sold the same on the very day or subsequent day. The percentage yield on sale of all these 4 parties are average @16.79%. To quantify yield of sales (Gross profit) the assessee was asked to produced item register for the entire month of March 2011. From stock summary produced by the assessee reveals that the average profit ratio for the month of March comes to 12.58% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o submitted that the details of the corresponding sale income the impugned purchases were submitted before the AO and that the AO has not rejected the sales made by the assessee. The ld. AR took the bench to the various submissions made before the AO to submit that the books of accounts have been rejected by the AO without pointing out any specific defects whereas the account of the assessee are subject to audit under section 44AB of the Act. The ld. AR submitted that for alleged bogus purchase of Rs. 5.01 lakhs, the AO made an addition by applying the GP rate on the entire purchases of the assessee which is not correct. The ld. AR drew the attention of the Bench to the various findings given by the CIT(A) to submit that the findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng has not been regularly followed by the assessee, or income has not been computed in accordance with the standards notified. From the findings of AO as extracted in the earlier part of this order we notice that the AO has rejected the books stating that the assessee has not maintained proper books accounts whereas the accounts of the assessee have been audited under section 44AB and that the AO has not recorded any adverse findings with regard to the correctness and completeness of the accounts. The AO's only reason for rejecting the books is that out purchases of Rs. 13 crores the sample verification of Rs. 5.01 lakhs were alleged as bogus. Further we notice that other than the sample purchases the AO has not examined the books of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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