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TMI Blog2017 (10) TMI 1671X X X X Extracts X X X X X X X X Extracts X X X X ..... 04. Basically, the civil construction works carried out by the assessee is in the nature of road repairing and debris clearing for BMC, a local body. In this case, the assessment was completed u/s 143(3) on 28-11-2011 determining a total income of Rs.47,92,956. Subsequently, the AO received information from the office of the DGIT (Inv), Mumbai to the effect that the assessee has been a beneficiary of bogus purchase bills issued by hawala operators listed by the Sales-tax department. Based on the information, the AO reopened the assessment on the ground that income chargeable to tax had been escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. In response to notices u/s 143(2) and 142(1), the authorised represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the AO. It was further submitted that purchases from the above parties cannot be declared bogus merely on the basis of statement of third party ignoring evidences filed by the assessee like purchase bills, delivery challans and payment proof. The assessee further submitted that his purchases are supported by valid purchase bills and also payment has been made through proper banking channels. The AO has not made out any case of sales outside the books of account nor pointed out any discrepancy in stock registers. The AO has not disputed the sales declared by the assessee. In the absence of any finding as to the incorrectness of books of account and stock details, merely on the basis of information received from Sales-tax department, pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and derives gross profit of 9.54 to 10.72% in the preceding financial years and accordingly if at all any addition is warranted, addition may be restricted to the gross profit declared by the assessee in earlier years. On the other hand, the Ld.DR strongly supported the order of CIT(A). 4. We have heard the parties, perused material available on record. The AO made addition towards purchases on the basis of information received from Maharashtra Sales-tax department which informed that the parties are involved in providing accommodation entries without any business activity. According to the AO, notices issued u/as 133(6) were returned unserved. Therefore, the AO opined that though the assessee has furnished certain evidences to justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged bogus purchases only on the basis of information received from Maharashtra Sales-tax department. At the same time, it is also an undisputed fact that the notices issued u/s 133(6) were returned unserved. The assessee has failed to furnish correct addresses of the parties. Under these circumstances, it is very difficult to accept that the purchases from those parties are explained to the satisfaction of the AO. Under these facts and circumstances what needs to be taxed is only the profit element in such purchases but not the total purchases made from alleged bogus parties. This view has been further supported by the decision of Ahmedabad Tribunal in the case of Vijay Protiens Ltd (supra) wherein it was held that only profit element em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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