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TMI Blog2018 (11) TMI 1974X X X X Extracts X X X X X X X X Extracts X X X X ..... orresponding sales made by the assessee. In the light of above facts and legal findings, as elaborated in the decision of ld.CIT(A), we do not find any error in the decision of CIT(A) for restricting the disallowance of 5% of the bogus purchases for assessment year 2013-14. Accordingly, the appeal of Revenue is dismissed. - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For the Revenue : Smt. Smitha V. Nair, Sr. DR For the Assessee : None ORDER PER AMARJIT SINGH, ACCOUNTANT MEMBER: This revenue s appeal for A.Y. 2013-14, arises from the order of the ld.CIT(A)-3, Surat, dated 24/11/2016, in proceedings under section 143(3) of the Income Tax Act, 1961; in short the Act . 2. Ground no.1, 2 and 3 are interconnect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der: Sales made by the firm of polished good received from manufacturing is also non genuine and subject to disallowance same as stock of polished goods to be reduced to that extent. We hope the above information/explanation/details will meet with your good self s requirement. However, if your good self needs any further information/explanation, we most humbly request your good self to let us know so that it can be complied with in due course. 5. ld.AO has not accepted the explanation of the assessee stating that on the basis of Investigation Wing Mumbai, it was proved that the assessee has received accommodation entries of bogus purchases from the aforesaid group and the assessee has utilized such bogus purchases to suppress his profits fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock is tallying on daily basis, in the stock register, the purchases cannot be doubted. He further argued that addition cannot be made on the statements given by a third party that too, without giving the assessee an opportunity to cross - examine, when the assessee has submitted all possible evidences for its claim. 8.8 I find that there is some merit in his argument, but still it is not totally acceptable. The surrounding circumstances and the statements of impugned parties cast enough doubts about the genuineness of the impugned purchase transactions. In addition to this, the appellant has never offered to produce the parties, from whom purchases have been made either before the undersigned or before Id Assessing Officer. However, the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of 5 % of the impugned purchases. 8.10 During the appeal proceedings, the AR has produced before me the copies of assessments orders by many Id AOs at Mumbai in the case of similar beneficiaries of accommodation entries by Shri Bhanwarlal Jain group of cases. In cases identical to appellant, the Id AO ( ACIT / ITOs) have made disallowances ranging from 3% to 5% of the impugned purchases. A chart showing the details of those assessments is annexed as Annexure 'A'. Similarly, the Id Commissioner of Income Tax (Appeals ) in Mumbai have confirmed disallowance @ 3% in cases on identical facts. A table showing details is annexed as Annexure ' B '. The annexures may be treated as integral part of this order. 8.11 Respectful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee. We observe that the assesee has not produced any of the purchase parties before the AO at the time of assessment proceedings or before the ld.CIT(A) at the time of appellate proceedings. However, we observe that by disallowing the purchases of Rs.1,15,56,443/- being 25% of Rs.4,62,25,773/- of total purchases would lead to abnormal high gross of profits which is unreasonable and impossible in the normal circumstances in the line of business of the assessee. Therefore, we are inclined with the decision of ld.CIT(A) that the purchases have been made by the assessee but not from the parties whose invoices have been obtained. We find justification in the findings of the ld.CIT(A) that the assessee might have inflated his purch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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